Stryrene price inflates on weak imports – 7 Jan 2014

There is moderate demand for Styrene Monomer in New Delhi market despite limited availability of the stock with traders. A trader shed light on this matter when he told the website, " The end product of Styrene, Polystyrene, maintains consistent demand in India , irrespective of the price  fluctuations. As such , Styrene also maintains a good demand, no matter the market price. Despite this, the supplies are limited in domestic market , which has increased prices in Mumbai and New Delhi". Furthermore, the trader suggested that the shortfall in supply is due to lesser imports than previous months, as the market participants didn't anticipate a surge in demand for the feedstock at the beginning of this month.

Traders maintain the stock of Styrene Monomer on a rolling basis and prevent from bulk hoarding as the expiration date for the feedstock is usually for a month. The suppliers anticipated  weak demand for the feedstock for this month, as a consequence, they purchased limited stock for the monomer.

Indian market is completely dependent on imports, domestic manufacturers who have installed capacity for Styrene are vertically integrated via forward integration of end user engineer polymers like ABS, SAN, Polystyrene, etc. As such, no domestic manufacturer supplies directly to the Indian market and the country is completely reliant on imports.

In the last half of 2013, the price of the feedstock was very volatile due to the rupee- dollar fluctuation. Prior to the devaluation of  Rupee, Styrene was being sold at Rs.125 per liter in New Delhi. During the free fall in Indian rupee, this price reached levels of Rs. 130-136 per liter in the national capital. At present, rupee has bottomed out at levels of Rs.61 to $1 but the price of the monomer hasn't retracted to previous levels. There is a speculation that market participants have artificially inflated these prices, blaming the upsurge to weaker imports. There is an indication of strong economic indicators for Styrene in the country, because of which a downward price correction is expected in the future.

Based on market sources, its determined that end user sectors have increased the prices of their end products to reflect the rise in price of  the feedstock.

Styerene monomer currently sells for Rs.146 per liter in New Delhi and Ex- Kandla Rs.115 per liter