Recovery of styrene market confidence will take time

wallpapers Industry 2020-12-09
In July, the domestic bulk chemicals market experienced a wave of precipitous decline. Recently, the futures market ushered in a drop stop tide. Methanol, PTA diethylene glycol, ethylene glycol and other major chemical products futures all showed several drop limit states, "there is no egg under the nest", and the market price of styrene is not optimistic.

gold and silver island analyst sun Nengji said that this wave of sharp decline in the market is mainly due to the negative news on the outside of the market mentality formed a pressure. International crude oil is the first to bear the brunt. Since July, the international crude oil futures price has broken the previous narrow range fluctuation pattern, and the overall decline is obvious. Especially in early July, the international crude oil closed down sharply, with a one-day drop of more than 7%; Against the background of crude oil price falling sharply, and the continuous drop of domestic A-share market has cast a shadow on the mentality of market participants, and the possibility of Greece's brexit has further led to increased market panic. In addition, the current commodity market itself is in a bear market, and the domestic chemical market is under obvious pressure, especially in the futures market. Due to the obvious hedging intention of some short positions, the prices of chemical products are caused General decline.

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from the perspective of styrene market fundamentals, sun Nengji said that the current market has no obvious positive side to boost. Although port inventory is relatively low year on year, it has been difficult to significantly boost the market mentality. In addition, the recent port inventory level has rebounded steadily. It is reported that the total mainstream inventory in Jiangsu has been higher than the overall level since May to June, while the current downstream demand still shows no signs of improvement. The start-up of EPS and PS in the main downstream was 40% and 55%, respectively, which was slightly lower than that in the late June. The prices of downstream products continue to fall, and the pace of shipment is difficult to accelerate significantly. In addition, some EPS factories export styrene as raw material in stages. This situation may form a new pressure on the market mentality.

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sun Nengji also pointed out that due to the sharp fall of styrene market, the market may have a wave of follow-up to lock up orders after the sharp fall of styrene market, and the accumulated decline is relatively large, and the early empty sheet profit is rich. After the signs of oversold rebound, the market may have a wave of follow-up to fill the short and lock up orders, which will support the mentality of market people. However, in the absence of bad news on the periphery and the lack of downstream just need to boost, the current market activities are mostly speculative activities among traders, and whether the market confidence can quickly recover will also test the market. It is expected that the market is difficult to rebound significantly, and the short-term small shock pattern is more likely to appear.


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