In China, supply of styrene monomer (SM) is on the rise since early May. Some SM plants raised operation rates in East China and a major SM maker is scheduled to finish turnaround in Shandong. However, the major feedstock benzene market is staying firm along with perceptions of tight supply. Feedstock costs are hovering high.

On the demand side, traders do not have high stocks and continue buying to cover short positions. Further, demand for exports is also observed. But since domestic demand is not strong, many market players forecast that the market would be capped in May onwards.

With respect to feedstock, the market for ethylene, a major feedstock, is bearish. While demand for derivatives is staying sluggish, supply is expected to increase going forward. Production of benzene would be limited as turnaround is scheduled to be carried out in May onwards. In addition, with volumes of imported cargoes low, perceptions of tight supply are anticipated to continue.