Entering December, the PS market has entered a consolidation phase amid conflicting bullish and bearish forces. Most prices have stabilized, while some grades exhibit fluctuations, presenting an overall narrow range consolidation pattern. Although the market occasionally attempted probing price hikes, buoyed by the positive impact of phased increases in styrene prices and supported by tight supplies of certain PS grades, sustained upward momentum remains elusive. This is constrained by ample industry supply and lackluster downstream demand, leaving the market poised for continued consolidation in the near term.
From a cost perspective, styrene prices initially rose before declining, gradually retreating after a period of fluctuating upward movement. Looking ahead, styrene's own supply and demand may maintain a tight balance. This dynamic stems from supply-side offsetting: while Panjin Baolai's styrene unit temporarily halted due to malfunction, Lianyungang's styrene facility is scheduled for a smooth restart in mid-December with gradual capacity release. These opposing factors offset each other, stabilizing overall supply. Despite the seasonal downturn in downstream industries, rigid demand provides support, with overall demand expected to fluctuate slightly or stabilize. Additionally, while port inventories of styrene remain relatively high, they have been gradually declining since December, effectively alleviating potential supply-demand imbalances and providing market cushioning. Overall, styrene lacks significant unilateral drivers, with prices expected to maintain a range-bound pattern, offering relatively limited cost support for PS.
Supply: PS industry operating rates have shown a steady recovery since November. Although the Guangxi Petrochemical PS unit reduced its production load to single-line operation on December 8, causing some short-term market supply disruption, domestic PS output is expected to continue increasing as units at Guangzhou Petrochemical and Lianyungang Petrochemical resume production as scheduled in mid-December. The overall market supply remains ample, with supply pressure persisting.
Demand: Production schedules in downstream sectors like home appliances have declined year-on-year. End-users maintain cautious purchasing, primarily replenishing essential inventory with limited proactive bulk stockpiling. This lack of bulk buying sentiment struggles to effectively drive PS prices upward.
Overall, the PS market currently lacks clear directional guidance and faces short-term downward pressure. However, cost support provides some resilience against declines. The market is expected to continue its phase of consolidation. Key focus should be on styrene price trends and downstream demand changes, awaiting new drivers to emerge.
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