The domestic polystyrene (PS) market performed strongly in the second half of July, with significant price increases across most grades. According to SunSirs' bulk commodity data, the benchmark price for PS stood at 10,000 RMB/tonne as of July 24, marking an 11.73% increase since the beginning of the month.

Cost Factors: Recent fluctuations in ceasefire talks between the US and Iran regarding the Middle East, coupled with heightened shipping risks in the Strait of Hormuz, have sparked concerns over global crude oil supplies, causing a rapid return of geopolitical risk premiums to oil prices. Rising costs have boosted prices for naphtha and pure benzene, subsequently driving a sharp rise in the styrene market. However, as supply-demand expectations remain relatively loose, the potential for further price increases may be limited; the styrene market is expected to show a volatile, slightly bearish trend in the short term.

Supply and Demand: The domestic PS industry has remained largely stable with minor fluctuations recently. Domestic operating rates have stayed low, and with scheduled maintenance underway at some facilities, the overall industry load is hovering around 50%. Inventory levels are manageable, though supplies are tight in some regions. Manufacturers are showing a strong willingness to support prices—often quoting higher—amidst some restocking activity. However, the market is currently in a traditional off-season, with downstream factories (such as those producing appliances and packaging) showing slow consumption. Additionally, persistent high temperatures have led to expectations of reduced production schedules at end-user enterprises; with low operating rates, purchasing activity is limited to essential, low-volume needs. The PS market currently remains in a pattern of weak supply and weak demand.

Domestic PS prices surged in the second half of July. Production loads at polymerization plants remained low, while consumption demand stayed at off-season levels. SunSirs analysts believe that the sharp rise in crude oil—the primary upstream raw material—has boosted prices across the upstream supply chain, causing costs to rebound quickly and driving PS spot prices upward. However, downstream buyers remain resistant to high-priced supplies, suggesting that the PS market may enter a period of stalemate in the short term.

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