SM market unlikely to rise in China
In China, the market for styrene monomer (SM) was weak until July. Supply/demand for SM was significantly slack because feedstock costs such as crude oil remained high and demand for derivatives was sluggish. Under such circumstances, there are some expectations that demand for derivatives may recover in August onwards but most sources view that SM prices may not rise due to the low demand season.
As for feedstocks, supply of ethylene tends to decrease in August onwards due to reduced production. Nevertheless, the market is unclear since demand is not robust. Meanwhile, supply of benzene is expected to grow because benzene facilities that finished regular maintenance will resume operations while many derivative facilities are scheduled to conduct regular maintenance.
In the derivative market, expanded polystyrene (EPS) makers may increase operation rates toward the peak demand season in September onwards. ABS resin makers may reduce production on the back of low demand. Polystyrene (PS) supply is expected to increase as facilities that have undergone regular maintenance are scheduled to resume operations. Meanwhile, supply/demand is slack since end-uses have thin interest in buying.