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[Industry Focus]：Styrene market prices have been falling for nearly 12 months, the follow-up trend?

Read： 280 Time：18months ago Source：化工平头哥

At present, the operation logic of the chemical market has subverted the core logic of the value chain. The weakness of crude oil and the downturn of the consumer market, as well as the negative impact of the external market, have seriously affected China's chemical enterprises. Poor economy and poor consumer market are the main negative impact of the current chemical market. under such circumstances, the prices of many chemical products in china have continued to fall, and some products have already hit historical lows.

According to relevant data, from June 2022 to May 2023, the price of styrene in China has fallen for nearly 12 months in a row, from a previous high of 11057 yuan/ton to about 7700 yuan/ton now, a drop of about 30%. In the past year, the decline of China's styrene market has led to the recent low.

Regarding the reasons for the decline in styrene, the information company has conducted a more detailed analysis, such as high domestic supply, sluggish consumer market, and insufficient support for crude oil costs. At present, the industry is more concerned about how long this decline can last. What level can the lowest price reach?

Judging from the fluctuation of the mainstream average price of styrene in China in the past 17 years, in the past 17 years, the overall fluctuation of China's styrene market is relatively large, ranging from 6850 yuan/ton to 13800 yuan/ton, of which there are at least four historical lows, that is, 4540 yuan/year in 2008, 6825 yuan/ton in 2015 and 4867 yuan/ton in 2020. Judging from the time when the lowest point appears, the usual time interval is about 5 years.

Judging from the trend of the past 17 years, the current price of styrene is 7700 yuan/ton, which has not yet reached the lowest point in history. Judging from the long-term historical trend, the historical lowest point should be 4500 yuan/ton, with a gap of 3200 yuan/ton.

China Styrene Table Housekeeper Price Trend Chart, 2006-2023 (Unit: RMB/Ton)
2006-2023年中国苯乙烯表管家价格走势图.jpg

source: Business

if styrene has a seasonal fluctuation pattern, it can be analyzed by monthly average price fluctuations. According to the year-on-year change rate of the average monthly price of styrene in China in the past 15 years, the year-on-year change rate in 8 years has declined, accounting for about 53% of the total year, and the year-on-year change rate in 7 years has increased. In other words, from May to July each year, the probability that the year-on-year change rate of China's styrene benchmark price will drop by more than half, and the year-on-year decline is more likely.

As a special reminder, this time the year-on-year rate of change is calculated, which is the difference between the current year's price and last year's price.

Monthly average price chart of China styrene benchmark price from 2008 to 2023 (unit: yuan/ton)
中国苯乙烯标杆价格从2008年到2023年的月度均价图.jpg
source: Business

judging from the trend of China's styrene benchmark price in the past year, the overall trend has shown a clear downward trend. Among them, there was a significant decline in August 2022, with the price falling to 8457 yuan/ton, and in December 2022 It fell to 7700 yuan/ton.

If the price movement of the past year is seen as a downward trend, the price has now fallen to the low point of December 2022, the low point of the recent downward trend. If the styrene market does not rise in the short term, then this decline will once again hit a record low in the past year.

According to the price difference between August 2022 and December 2022, the low point of this decline is expected to be around 6900 yuan/ton. But if the styrene market wants to touch the historical low of the past 17 years, unless this round of large-scale decline in the chemical market continues to spread, the negative attitude of the market is strong. After all, there is still a gap of more than 3000 yuan/ton from the historical low of 4550 yuan/ton.

China Styrene Benchmark Price Trend Chart from June 2022 to May 2023 (Unit: Yuan/ton)
2022年6月至2023年5月中国苯乙烯标杆价格走势图.jpg
source: Business

like PS, the price fluctuation of styrene market directly determines the value fluctuation of styrene industry chain, EPS, ABS and other rubber varieties. Compared with other chemical products, the price of styrene has not fallen much and is considered to be one of the relatively resilient products, but the only concern in the industry is how long it can fall this time. From the perspective of historical trends, market supply and demand, and price decline expectations, it is almost impossible for styrene prices to reach historical lows, and the probability of greater volatility is 6,600-7,600 yuan/ton.