Supply is tight next quarter Asian ** high consolidation

Supported by the continued tight supply, spot prices in the Asian market in the next quarter will be high and the demand in the downstream market will increase. Traders will raise prices.

According to industry sources, in mid-August, as many Chinese manufacturers shut down their installations due to sudden or planned closures, supply was insufficient and prices have remained high since then. Moreover, there are several major manufacturers in Northeast Asia who also shut down the device for various reasons. For example, JXNippon shut down the water island device for technical reasons, and the SKEnergy Ulsan device shut down as planned. All of these have exacerbated the tight supply of Asia **.

From the Northeast Asian producer's side, the downstream demand is healthy and stable. After waiting for the holiday at the end of the year, the demand will further improve because the buyers need to start making up their positions. Some Chinese buyers have stated that after the Spring Festival is over, demand will improve, either in January or in February.

In Southeast Asia, many manufacturers stated that they did not have much goods available for the spot market. And next year, the spot supply will not necessarily increase. Looking at the current situation, in the short term, if there is no special situation, the market will not undergo major changes.

Looking at the downstream sector again, in 2013 China had a series of phenol-driven plans. Phenol was the second-largest downstream of pure benzene. Therefore, the overall market demand for pure benzene will increase next year. Buyers of styrene monomer in Northeast Asia said it is now difficult to buy the spot of pure benzene. Moreover, the current price of pure benzene is too high. It is very dangerous to start buying now.

Due to the high price of pure benzene as raw material, downstream styrene monomer and phenol also face the pressure of price increase. Data show that on August 10, the price of styrene monomer was 1425-1435 USD/ton CFR Northeast Asia. Due to the tight supply of pure benzene and the high prices, the styrene monomer plant mostly lowered the operating rate to 70%, which resulted in a tight supply of styrene monomer. Asian phenol prices rose from US$1, 400-1,450/tonne CFR China’s major ports on August 10 to US$1,500-1,075/tonne CFR China’s major ports on December 14.

Some insiders added that the high price of downstream products has formed a vicious circle with the price of upstream products. Due to continued tight supply, increased downstream demand, and optimistic expectations of insiders, Asian ** prices will remain high in the first quarter of next year.