The hottest styrene East and South China arbitrage

Styrene East China South China arbitrage window opens

styrene East China South China arbitrage window opens

May 6, 2019

since 2019, there have been two arbitrage opportunities in styrene East China and South China markets, * in January and the second in late April. The land price difference between the two countries is expected to exceed 500 yuan/ton by the end of October this year. At present, the arbitrage window is still open

data source: jinlianchuang

from the data trend monitored by jinlianchuang, the price difference between the Styrene Market in South China and the mainstream East China has remained within 200 yuan/ton for most of the time. Recently, affected by the change of local supply and demand trend, the arbitrage window is in the open state. Before the deadline, the spot negotiation in East China fluctuated around the yuan/ton range, and the coating in South China hovered around the yuan/ton range. The reason for the rapid widening of the price difference between the two places is that the East China market has been in a seesaw confrontation for a long time, while the South China market has independently raised prices under the support of tight goods

from the perspective of supply in the South China market, it is mainly CNOOC shell and Sinopec South China, including some domestic trade sources such as Baling Petrochemical and Ningbo Keyuan, which are sent to local supply. In addition, some imported sources such as Japan, South Korea and the Middle East are supplemented

so why will the South China market show a tight supply pattern recently? Can the market continue the price trend after the May Day holiday

there are two reasons for the tight supply and high price:

first, from the perspective of supply, the high-temperature tensile testing machine is generally customized according to the requirements of customers. Dating back to March, due to the impact of the reduction of value-added tax, shell and Sinopec contract customers in South China concentrated on picking up goods before the end of March, making the factory inventory maintain a low level and continue to April. Moreover, in the process of several spikes in the East China market in April, the continuous upward momentum was insufficient, which led to the pressure on the mentality of local merchants in South China. Most traders maintained the mode of closing at high prices or even oversold, and their positions were generally low. In addition, Baling Petrochemical supplies 4000 tons per month to South China, which was reduced to 2000 tons in April. While the source of imported goods was affected by many factors, such as the centralized maintenance of international devices, and the arrival volume in April was significantly reduced

second, from the perspective of demand, the downstream demand is stable, the main downstream of ABS and PS starts at a high level, and the small downstream of UPR and some lotion also maintains a stable start. In addition, the 150000 T/a ABS unit of LG Chemical (Huizhou) phase II has been running smoothly since it was put into operation in March, and the theoretical consumption of styrene in the local area has increased by about 8000 tons per month

the shipping freight from East China to South China is about 300 yuan/ton. With the arbitrage window between the two places open, some domestic sources in East China have been sent to South China for arbitrage operations. According to the preliminary statistics of jinlianchuang, the total inventory of styrene in South China is about 15000 tons at present, while two ships with a total of 4000 tons of domestic trade goods arrived successively at the end of April and the beginning of May. The Zhuhai reservoir area lacks an industrialization connection mechanism, and 3000 tons of bonded goods (originally belonging to the downstream production plant) will be circulated to the market later. In addition, it is known that about 17000 tons of imported goods have arrived in Hong Kong in the first ten days of May. At that time, the supply pressure of Styrene Market in South China will appear again, and the price difference with East China is expected to close due to the good catalytic effect of rare earth nanoparticles and some nano base metal oxides