Preliminary ADD decision on import SM at nigh, Chinese buyers delay new contract talks

Chinese authorities launched an anti-dumping investigation on import styrene monomer (SM) from South Korea, Taiwan and USA in June 2017, which expected to last a year with possible extension of up to six months. The preliminary decision is expected to be announced as early as in February 2018, with sources call for a rate of 2% to 50% depending on producers and country of origin. This has had Chinese buyers taking cautious stance, and many delayed the negotiation for the new term contract, which normally taking place in December.

Deep-seas cargoes from USA are strongly affected by the issues and many Chinese buyers are sourcing alternative parcels from either local market or Asian sellers. This explained the sudden surge in import SM from Singapore to China in September at 24,792 tons – approximate three times higher than August figures.

China is one of the major SM importers in the world with annual consumption stands at about 10 million tons, of which domestic production only can meet 70-75% of demand. South Korea, Taiwan and USA are rated as top SM exported to China in 2016 and first nine months in 2017, with combined quantity stand at 50-60% of China total SM import.

Strict environmental compliance might keep manufacturing activities in China low in the coming month after falling 0.8% in October. Industry sources are not putting heavy bullish bet on the near term market outlook.