According to the data monitoring of business association, the price of styrene will fluctuate greatly in 2020, and the overall price will decrease first and then increase. As of December 30, the average quotation price of styrene enterprises was 5966.67 yuan / ton, a sharp drop of 17.70% compared with 7250.00 yuan / ton quoted in early 2020 (January 1), and a drop of 17.89% compared with the same period last year.

In 2020, the domestic styrene price will slow down from January to March, fluctuate slightly from April to early October, and rise overall, showing an inverted “V” trend from mid October to the end of December. Specifically, it can be divided into the following three stages:

The first stage (January March): from January to February, the crude oil market continued to decline, followed by ethylene and pure benzene, and styrene cost support was weak. Domestic styrene supply increased significantly, and the port styrene inventory reached a historical high of 322500 tons. In addition, as the Spring Festival approaches, the downstream demand is greatly weakened. By the Spring Festival, the downstream EPS industry started down to 16%, and the styrene center of gravity moved down significantly. In terms of domestic production, from January to February 2020, the styrene units of Hengli Petrochemical Co., Ltd. and Zhejiang Petrochemical Co., Ltd. with a capacity of 720000 T / A and 1.2 million T / a were put into operation. By the end of 2019, the total styrene production capacity was 93.05 million T / A, and the industry maintained a tight balance. The production of these two sets of refining and chemical integrated units made the styrene industry officially enter the stage of oversupply, and the pressure on production capacity gradually increased. In March after the Spring Festival, OPEC + production reduction agreement negotiations broke down, Russia and Saudi Arabia fought a price war. Saudi Arabia announced a large-scale production increase to gain more market share. The two sides wrestled with each other to return to the negotiation table. Oil prices plummeted, and WTI fell from $47 at the beginning of March to $20 at the end of the month, a drop of more than 36%. The international oil price fell out of the historical level of negative oil price. The price of pure benzene and ethylene, raw materials in the upstream of styrene, almost fell. The downward shift of the cost center has opened up a huge space for the weak styrene to decline. Affected by the public health events at home and abroad, people’s travel is limited, production and operation is stagnant, and the rework of downstream workers is delayed, resulting in the low operation rate of downstream, which is 30-45 days later than that of previous years. The styrene port inventory continues to operate at a high level, and the styrene factory is under pressure, reducing the operation rate to a low level of 65% within the year. According to the data monitoring of the business association, the average quotation price of styrene enterprises on March 31 was 4650.00 yuan / ton, down 35.86% from 7250.00 yuan / ton on January 1

The second stage (April to early October): in April, with the weakening of the epidemic, the crude oil rebounded strongly, the demand gradually recovered, and the pre backlog demand gradually entered the market. In addition, the strong rebound of crude oil, the strong rise, the tight price of ethylene, the rebound and the sharp rise of price brought good to styrene. However, the downstream profits of styrene expanded, the factories purchased from the bottom collectively, the overall operating rate of the downstream increased, the enterprises maintained high profits, and the demand for styrene was strong. With the double benefits of upstream and downstream, the price of styrene fluctuated all the way up. Since May, OPEC + has entered a period of super scale production reduction, with the improvement of epidemic situation, demand has recovered, international oil prices have begun to rise, pure benzene and ethylene markets have improved, and styrene has strong support. With the gradual recovery of domestic demand, especially the completion of real estate and the export of small household appliances, the operating rates of ABS, EPS and PS in the downstream have gradually returned to the normal level before the festival, and the operating rates of some products are even higher than those before the festival. Therefore, in the second quarter, under the rising cost and the recovery of demand, styrene rose in shock. However, in June, due to a large number of styrene imports, high domestic supply and serious oversupply, the main port in East China was short of inventory capacity, and some warehouses increased storage fees to urge the downstream to pick up the goods, which led to a huge pressure on the yard sales. For a long period of time from June to October, the supply and demand of styrene market was serious, the main port continued to accumulate, and the supply exceeded the demand. Downstream prices are relatively stable as a whole, and still maintain considerable profits, but demand for styrene remains rigid. Generally speaking, on the one hand, the support of styrene cost is acceptable; on the other hand, the pressure of supply and demand restricts the rise of styrene, and the price of styrene is mainly consolidated in a wide range, and the overall price fluctuates. According to the data monitoring of business society, the average price of styrene quoted by enterprises on October 1 was 5450.00 yuan / ton, up 17.2% from 4650.00 yuan / ton on April 1.

The third stage (October – December): October – December, styrene prices showed an inverted “V” trend. According to the data monitoring of the business association, the average quotation price of styrene enterprises was 5966.67 yuan / ton on December 30, up 9.48% from 5450.00 yuan / ton on October 1. In October, the effect of destocking is obvious, the inventory drops sharply and maintains a short-term downward trend, the enterprise inventory is low, and the market supply is tight. Downstream maintain considerable profit margin, and operating rate remains high, styrene production and marketing profits surge, quickly back to the “windfall” space. In addition, the long-term good performance of the downstream and the strength of the spot market have given the capital confidence, and the control of capital entering the market has risen, which has led to the sharp rise of the spot price. In addition, in the fourth quarter, the new crown vaccine made a major breakthrough, the news of vaccine development continued to come, the crude oil rebounded strongly, and the styrene support surface was good. At the same time, overseas styrene plants have been shut down for maintenance since late August. The import volume of styrene has decreased significantly since October. Under the “silver ten”, the terminal orders broke out, the supply and demand of styrene were mismatched periodically, the East China port quickly went to the low level, the cargo holders were reluctant to sell, and the spot led to a strong rise in the futures price. According to the data monitoring of the business association, the average quotation price of styrene enterprises on November 15 was 8750.00 yuan / ton, up 60.55% from 5450.00 yuan / ton on October 1. By the middle of November, the early maintenance units have been restored one after another. In addition, the Xuyang unit has been started, and the supply of goods has increased. With the improvement of environmental impact and low temperature off-season, the downstream demand gradually weakened from north to south. Styrene manufacturers actively reduced prices and promoted sales. The supply from the North impacted and suppressed the East China market, and styrene prices declined slightly. However, pure benzene remained shock finishing, and the overall upward trend was slow. Ethylene follows the trend of crude oil with strong cost support and tight supply, leading to a sharp rise in ethylene price. According to the data monitoring of business news agency, the price of pure benzene was 4204.00 yuan / ton on December 30, up 4.58% from 4020.00 yuan / ton on November 15. The external price of ethylene on December 30 was 1022.00 yuan / ton, up 35.01% from 757.00 yuan / ton on November 15. The price of ABS downstream of the three main styrene bodies was 15750.00 yuan / ton on December 30, down 14.86% from 18500.00 yuan / ton on November 15. The price of EPS on December 30 was 8500.00 yuan / ton, down 16.26% from 10150.00 yuan / ton on December 1. The price of PS on December 30 was 9266.67 yuan / ton, down 15.42% from 10166.67 yuan / ton on December 1. Although the supporting surface of raw material end of styrene is strong, the overall supply is still in excess, and there is a rising expectation. The probability of wharf continuing to accumulate is relatively high, while the downstream price drops, some profits are reduced, and the finished products are accumulated. In general, the overall prices of the three downstream styrene industries showed a downward trend from late November to the end of December, the overall start-up was basically stable, and the demand for styrene did not improve. In addition, with the weakening of capital expectation for the later period and the gradual abundance of expected supply, the market inventory is expected to increase, and the styrene is expected to drop sharply.

Overall, in terms of operating rate, the operating rate of styrene in 2020 is 62% – 93%, with an average operating rate of 81.4%, which is significantly lower than that of 89.6% in the same period of last year. From January to October 2020, the import volume of styrene was 2.8681 million tons, a decrease of 92700 tons compared with the same period last year, with a year-on-year decrease of 3.56%. With the introduction of new domestic production capacity, the import dependence of styrene was 23.52%, down 3.64 percentage points compared with the same period last year.

Future forecast:

Business community styrene data analysts believe that in 2020, the overall price of styrene first down and then up. With the approach of 2021 and the gradual recovery of the global economy, the global monetary easing environment will not be broken, and the use of vaccines will further dilute the negative impact of the epidemic. In addition, OPEC + production reduction policy should still play a positive role. Shale oil in the United States is expected to grow again. Saudi Arabia, Russia and the United States are still in the triangle of supply side game. Due to the process of demand recovery, the global oil market continues the process of destocking, the international oil price center is expected to further move up, and the support surface of styrene cost is expected to increase under the strengthening of raw materials. In 2021, the domestic styrene industry still has a huge capacity investment plan, with an additional capacity of 4.49 million tons / year, and the production time is concentrated in the first and fourth quarters. In terms of imports, with the improvement of domestic self-sufficiency rate, the import volume will continue to decline. Downstream, styrene three downstream terminal demand is good, high profit, high operating rate or continue to 2021. In general, the contradiction between supply and demand of styrene in 2021 is still large, and the pressure of oversupply still exists. The price of styrene next year will be balanced by the operating rate of domestic enterprises, import volume, port inventory and the enthusiasm of downstream goods taking.