ShouChuang Futures: Cost declines, styrene futures prices drop sharply

In the spot market, the East China polystyrene price is 10,920 yuan/ton, up 50 yuan/ton from the previous trading day.
On the supply side, last week domestic polystyrene operating rates increased somewhat, but East China polystyrene port inventories fell by 46k tons quarter-on-quarter. Due to a sharp rise in upstream ethylene prices, some suppliers announced force majeure, which squeezed polystyrene profits and increased the polystyrene production-cut plan for April.
On the demand side, downstream buyers are reluctant to accept high-priced feedstock, and demand follow-through is weak. Overseas arbitrage demand increased, boosting polystyrene exports and causing port inventories to drop sharply.
In short, earlier export demand drove port de-stocking, and the domestic polystyrene production-cut plan increased, providing support for polystyrene prices. However, as the geopolitical situation eases, there is an expectation that overseas supply will recover, which is a negative for our country’s polystyrene exports. In addition, the cost end—crude oil and pure benzene prices—has fallen sharply. It is expected that in the short term polystyrene futures will trade in a range and adjust; pay attention to developments in the Iran-U.S. negotiations, the resumption of the Strait of Hormuz shipping route, and the resulting changes in plant start-ups. (Caitou Futures)