Styrene recorded a year low at the beginning of November, and then rebounded to break through the short and medium-term moving averages, which indicated a change in the weak situation. This week, the high price adjusted back, did not break the previous low point, and the bottom characteristics gradually showed. If this support level is effective, the possibility of continued rebound in the later market increased.

The price of styrene monomer has rebounded since reaching the lowest point of the year on November 11th, with the main contract 2601 experiencing a maximum rebound of about 6%. However, since last Friday, there has been a correction in the price of styrene monomer at higher levels, and attention should be paid to whether the previous low point can gain effective support.

Not much new capacity next year.

After the low-speed growth in 2024, the growth rate of styrene capacity accelerated again in 2025. So far this year, more than 2 million tons of ethylbenzene dehydrogenation process for styrene production have been put into operation, and the capacity growth rate for the whole year is 11%. The main projects include Yantai Yulong Petrochemical 500,000 tons/year, Jingbo Sida Rui 670,000 tons/year, Jilin Petrochemical 600,000 tons/year, Guangxi Petrochemical 600,000 tons/year, etc.

Production of styrene in the first 10 months of 2025 was 14.99 million tons, a year-on-year increase of 16.3%. However, based on the announced commissioning plans for 2026, it is expected that only the 700,000 tons/year unit of Beifang Huajin is likely to be commissioned in the second half of the year, and the growth rate of supply will once again decline.

In terms of imports and exports, the cumulative import volume of styrene monomer in the first 10 months of 2025 was 201,700 tons, and the cumulative export volume was 267,500 tons, showing a slight net export pattern. However, due to the overall small scale of import and export volume, the current impact on the domestic supply and demand pattern is relatively limited.

The downstream is facing a growth bottleneck

The three major downstream demands of styrene are EPS, PS and ABS industries, accounting for more than 70% of the total demand. It is mainly used in packaging, household appliances, automobiles and other fields.

From the operation of industry equipment, the current PS industry production capacity is about 55%, which is at the lowest level in recent years; the EPS industry production capacity is slightly better, at the neutral level in recent years; the ABS industry production capacity is relatively the highest, about 72%, higher than the average level of last year, but still significantly lower than the previous years. In terms of output, from January to October 2025, the cumulative output of the ABS industry was 5.639.3 million tons, an increase of 27.53% year-on-year; the cumulative output of the PS industry was 3.894.6 million tons, an increase of 11.24% year-on-year; the cumulative output of the EPS industry was 3.746.9 million tons, an increase of 5.43% year-on-year.

In terms of terminal demand, the weak cycle of the real estate industry has suppressed the demand for styrene in the fields of exterior wall insulation and building decoration materials. However, in the application field of home appliance casings, with the support of the domestic trade - in policy and the growth of overseas emerging markets, the demand performance is acceptable.

Valuation-driven bias neutral

The styrene inventory in South China ports has declined from the high level to a neutral level at the same period last year, and the inventory in Jiangsu ports has fallen from the highest level of 2.025 million tons in late October to 1.642 million tons this week, which has relieved the inventory pressure in ports, but the inventory in the East China region is still relatively high. The inventory of the sample factory has fallen from more than 2.5 million tons at the beginning of the year to 1.9 million tons, and the total inventory has fallen from the year's high level of 4.7 million tons to 3.6 million tons, with a clear trend of inventory reduction, and we need to pay attention to whether the inventory reduction can continue.

On the cost side, the high operating rate of domestic pure benzene units, combined with imports, has created a significant supply pressure. However, pure benzene prices are currently gradually approaching the breakeven line, and with overseas disruptions still present, styrene prices may receive some support. In terms of profitability, non-integrated styrene units are gradually reducing losses, while integrated units' profits have improved slightly, making the overall styrene valuation drive neutral.

Technically, styrene recorded a year-low in the first ten days of November, and then rebounded to break through the short and medium-term moving averages, which indicated a change in the weak situation. This week, the high price has declined, and the previous low point has not been broken. The bottom characteristics are gradually showing. If this support level is valid, the possibility of continued rebound in the future market is increasing.

To sum up, the supply side of styrene is expected to maintain high-speed growth until 2025, and the addition of new capacity is expected to be less in 2026, which may alleviate the supply pressure; the demand side still has resilience, among which the ABS industry contributes the largest demand increment, but the terminal demand shows a differentiated trend; the high inventory pressure has been alleviated, but the inventory is still relatively high, and the sustainability of the later inventory reduction needs to be focused on; on the cost side, the rebound of pure benzene brings valuation support to styrene.

In terms of operation, on the premise that the technical conditions are stable, if the price of styrene monomer breaks through the previous high point resistance, we can consider testing the long position with the distant contract as the main strategy, while closely tracking the changes in inventory, the trend of pure benzene prices and the recovery progress of terminal demand.

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