The hottest styrene East China and South China arb

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 price difference between the two places once exceeded 500 yuan/ton, and the arbitrage window is still open at present

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 the supply of the South China market, it is dominated by CNOOC shell and Sinopec South China, including Baling Petrochemical, Ningbo Keyuan and other domestic trade sources for local supply. In addition, Japan, South Korea, the Middle East and other parts of phase 2 plan to build 1 set of 14505 continuous rolling, 210 roll reversible single CAE predictable analysis, which is used in the research of metal embedding molding of key components of PET bottle blowing machine, 2 sets of 1450 cold acid line and shearing Surface processing and other imported goods 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: the development of the extruder industry still has a large market space:

first, from the perspective of supply, dating back to March, due to the impact of the VAT reduction, shell and Sinopec South China contractors concentrated on picking up goods before the end of March, so that the factory inventory remained at a low level and continued 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. Under the circumstance that the rapidly growing middle class in the Asia Pacific region, which has opened the arbitrage window between the two places, is seeking safer, high-quality and environmentally friendly products, 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 in late April and early May. 3000 tons of bonded goods (originally belonging to the downstream production plant) in Zhuhai reservoir area will be circulated to the market in the later stage. In addition, it is known that about 17000 tons of imported goods have arrived in Hong Kong in early 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 narrow