The polystyrene (ps) market has been functioning at the bottom of the year since june, although it has slowed down owing to new capacity releases and cost support. As at the end of june, the average monthly price of gpps was $8083 (ton, down), a decline of 3. 83 per cent in the ring; the average monthly price of hips was $8920, a decline of 3. 93 per cent in the ring. Industry predicted that it would take time for the ps market to get out of the valley in a situation where supply pressures were not reduced, costs were limited and demand was weak。
Continuous discharge of capacity
Ps capacity has grown faster in recent years and, although it has surpassed the demand rate, it continues to grow. According to data from dreitre, in the first half of 2023 there were six ps production companies producing nine production lines, with a total of 950,000 tons of new capacity per year。
Industry sources indicate that imports of ps have continued to increase in previous years, that domestic supply has remained tight and that large volumes of imports are required each year to fill the supply gap. Since 2021, however, the supply and demand situation has begun to reverse with the bulk operation of new installations。
In his presentation, li min, an ifac analyst, entered 2023 and the production of ps accelerated. As zhejiang formed 200,000 tons/year of ps devices, shandong li's 100,000 tons/year of ps devices, chimei qizhou 150,000 tons/year of ps devices, supply and demand conflict increased。
The ps market continued to decline in june, but momentum slowed. In mid-june, the ps market was in a slightly better atmosphere, influenced by the weakening of the cost support for styrene and the parking and reduction of ps installations in parts of east and north china。
With regard to the latter, industry sources indicated that the scheduled renovation of the shanghai secco plant was completed by mid-july, with expectations for its resumption; that other installations had not been stopped further, that there had been a reduction in production, that the new integrated device had stabilized production, and that the potential for the new device had remained, and that the domestic supply of ps was expected to grow or that the market had been deterred from coming out of the valley。
Cost expected softening
In terms of the ps raw styrene market, the general weakness of the international crude oil and commodity futures market in june was accompanied by an accelerated decline in upper styrene and pure benzene, the collapse of the cost end, the recovery in domestic production of superimposed styrene and the expected increase in imports, a lack of business confidence and a setback in the styrene market。
According to a presentation by zhong lin, inter-regional competitions, as well as persistent weakness in the base spread, have also led to falling prices for styrene in real terms and continuously refreshing low prices during the year. As at the end of june, the price ratio of east timor was down by $860。
But it was also the case that the ps's profit margin increased when the overall price of the ps fell less than that of raw materials, with a profit of $108 in june, an increase of $100 in the ring. Hipc profits, although still in a state of loss, were in the range of about $30, and were more than 50 times less than in the ring。
An analysis of the current styrene supply side shows that most of the units maintain stable production, the baal and extension units are restarted, and the town unit was restarted in late june, resulting in an increase in output. Although the load of individual installations in shandong has decreased, overall the increase in styrene output is greater than the loss。
Recent information on the parking of non-styrene devices, however, there are plans for the re-establishment of styrene installations in factories such as van hua, listed and saiko, coupled with an increase in the circulation of zhelicate and zhecian styrene products, the pattern of oversupply in the market has not changed, the mindset of the industry has increased, and the pressure on styrene markets has not been negligible recently。
Industry sources indicated that there was still trade replenishment of styrene from singapore in july and that imports were expected to increase, but downstream demand was also expected to increase, and the styrene market or narrow shock was limited in cost-side support to downstream ps。
Demand is too much
A major factor contributing to the continued decline in the ps market is the increasing demand-supply tension. Statistics show that between january and may, the cumulative ps consumption was 1. 9195 million tonnes, an increase of 3. 84 million tonnes, or 2. 04%. Between january and june, ps production reached 2,053 million tons, an increase of 15. 12 per cent over the same period of the previous year。
According to the drazen information analyst, it is clear that, in a situation where demand is growing at a slower pace than that of the release of raw materials and where demand is understretched, the downside of the ps market is a corollary。
Until then, ps imports had been effectively supplemented by strong domestic demand. However, with the release of domestic capacity, the external dependence of ps is decreasing. According to customs statistics, in may there were 532,000 tons of imports of ps in the country, representing an increase of 0. 56 million tons, or 11. 76 per cent, and a decrease of 119,000 tons, or 18. 28 per cent, over the same period. Between january and may, china's cumulative imports of ps were 289. 9 million tons, a decrease of 79. 9 million tons over the same period, or 21. 61 per cent。
In terms of exports, domestic exports of ps were 124,000 tons in may, a decrease of 0. 35 million tons, or 22. 01 per cent, in the ring ratio, and 8. 82 per cent, in the same period. Between january and may, china's cumulative ps exports amounted to 835 million tons, an increase of 393,000 tons over the same period, or 88. 91 per cent。
Wang chun ming, general manager of shandong weiyang chemical co. Ltd., argued that while the reduction in imports and the increase in exports had been beneficial to the domestic ps market, the growth of exports had not been able to catch up with the growth of the production capacity of the ps because of the small volume of imports and exports, and the export had not been beneficial to the post-ps market. Zhao soo-ling
