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Since March, the styrene market has been affected by international oil prices, the price has been a rising trend, from the head of the month of 8900 yuan / ton) rose rapidly, breaking through the 10,000 yuan mark, reaching a new high for the year. By now prices have pulled back slightly and the current styrene market price is 9,462 yuan per ton.

"Although styrene prices are still at a high level, but can not offset the cost pressure, combined with the impact of the epidemic downstream shipments of poor demand weakening, resulting in most styrene producers struggling on the break-even line, especially non-integrated device companies screaming for more. Based on the supply is expected to be loose, the main downstream are weak and other factors, is expected to short-term non-integrated device companies are still difficult to get rid of the loss situation." Wang Chunling, an analyst at China-Union Information, said in an analysis.

Market price increases can not catch up with the proportion of raw material increases

Recently by the overall rise in international oil prices, styrene prices of the two major raw materials ethylene and pure benzene have reached a new high in the year. April 12, the average price of ethylene market 1573.25 yuan / ton, and the beginning of the year compared to an increase of 26.34%; pure benzene, from early March began to rise, as of April 12, the average price of 8410 yuan / ton, pure benzene and the beginning of the year compared to an increase of 16.32%. And now the average price of styrene market and the beginning of the year compared to the increase is 12.65%, can not catch up with the raw material market ethylene and pure benzene market rise.

Zhang Ming, head of an external raw material styrene production enterprises in East China, said that enterprises not only to bear the cost pressure, but also by the impact of weakening demand, in March, although the average price of styrene out of this year's high, but forced to cost pressure, we have a theoretical loss of nearly 600 yuan per ton of products, the current profitability of the device than at the end of last year fell by about 268.05%.

Although styrene prices are higher, but most styrene producers are struggling on the break-even line, especially non-integrated device companies are suffering, for the raw material pure benzene and ethylene dependent on external procurement of non-integrated devices, styrene product side of the market upward range can not catch up with the rising costs, thus encroaching on the profit margin, the current non-integrated device statistics in East China gross profit remains at about -693 yuan, compared to January to February The loss doubled from January to February.

Styrene new production capacity increased significantly

According to statistics, in 2021, China's new styrene capacity in 2.67 million tons / year. And this year there is a lot of new styrene capacity release. As of early April, Yantai Wanhua 650,000 tons / year, Zhenli 630,000 tons / year, Shandong Lihua Yi 720,000 tons / year capacity has been released, a total of 2 million tons / year capacity has been released. Later there will be Maoming Petrochemical, Luoyang Petrochemical, Tianjin Dagu, the three sets of devices together 990,000 tons / year capacity is planned to be released in the second quarter of this year. In the first three quarters of this year, it is estimated that 3.55 million tons/year of new styrene capacity will be released. Therefore, this year, the sales pressure on the supply side of styrene is greater than last year, with sufficient capacity, it is difficult to raise prices to support points

Due to losses, so many styrene plants in the first quarter under the inquiry choose to shut down maintenance, but most of the maintenance plan is to end in mid to late April. The current styrene industry start-up rate rose to 75.9% from 74.5% in late March. Hebei Shengteng, Shandong Huaxing and many other shutdown maintenance units will restart one after another, and the start-up rate will be further increased later.

From a full-year perspective, styrene supply-side capacity is sufficient. The industry based on the expected release of new production capacity this year is expected to judge, for the late can get rid of the loss of state, generally hold a more pessimistic attitude.

Epidemic impact, the lack of downstream demand
Due to the multi-point distribution of the domestic epidemic, the three main downstream styrene EPS, polystyrene (PS), acrylonitrile-butadiene-styrene terpolymer (ABS) product circulation is blocked, product inventory passive rise. As a result, downstream plants are less motivated to start work, the start rate is generally lower, and demand for raw styrene is not strong.

Expandable polystyrene (EPS): East China common material offer 11,050 yuan, sample enterprises inventory maintained a stage high of 26,300 tons, the start-up rate fell to 38.87%, compared with the beginning of the quarter about 55% level, a large decline.

Polystyrene (PS): The current offer in Yuyao area is RMB10,600, and the inventory of finished products in sample enterprises has increased again to 97,800 tons since March, with the starting rate dropping to 65.94%, compared with the level of about 75% at the beginning of the quarter, a significant decline.

ABS: East China 757K quoted at RMB 15,100, the finished goods inventory of sample enterprises maintained a stable level of 190,000 tons after a small de-stocking in February, and the start-up rate dropped slightly to 87.4%, with a partial decline.

Overall, the domestic epidemic inflection point is now uncertain, and domestic hazardous chemical traffic logistics is unlikely to resume in a short period of time, resulting in insufficient demand for downstream products of styrene. In the case of the resumption of maintenance units and new production capacity, the average price of styrene market is difficult to return to the standard of 10,000 yuan, and it is difficult for producers to pull back the profit in the short term.