Although the market expects the international oil price to rise, there is a certain support for the price of chemical products. However, due to the lack of maintenance of global styrene units and the profit of styrene production is still acceptable, the global supply is expected to increase in the first quarter of next year, and the main downstream PS, EPS, ABS and UPR of styrene are facing load drop, so the styrene price is facing certain downward pressure.

Crude oil market expected to be destocked

OPEC + will increase production by 500000 B / D from January 2021, and will hold monthly meetings from January next year to “assess market conditions and decide on further production adjustments for the next month, with monthly production adjustments no more than 500000 B / D”. According to the EIA forecast of the US Energy Agency in December, the global crude oil market as a whole will be slightly de stocked in 2021, which is expected to be 1.8 million barrels / day, with a large supply gap in the first quarter of this year. According to the evaluation of the Bloomberg News Agency, the results of the OPEC + meeting will make the crude oil market in the state of de stocking until the first quarter of next year.

At present, mainstream investment banks are more optimistic about the future oil price rise space. According to the analysis of relevant institutions, the average cost of tight oil in the United States is about US $44 / barrel, while the cost of Russian crude oil is $53 / barrel. As Russia and other countries mainly refer to Brent crude oil, if Brent rises to more than $55 / barrel, basically all other crude oil costs can be covered except oil sand. According to the evaluation of major mainstream investment banks on crude oil price in 2021, Goldman Sachs sees it at $65 /If Brent oil price rises to $53-55 / barrel, there will be more resistance to move forward.

Styrene supply will increase

For example, Shanghai SECCO’s 650000 ton styrene plant will be overhauled for 35 days from November 15. It is expected that the styrene plant with an annual output of 210000 tons in Shuangliang will be opened in mid December. Therefore, from the supply side, styrene supply will rise in the first quarter of next year under the condition that the current unit is not expected to be overhauled.

From the perspective of overseas styrene plant maintenance, most of the styrene units previously overhauled in South Korea were restored in November and early December, and the cosmor unit in the United States was also started from December 5 to 6, resulting in an increase in overseas styrene supply.

On the other hand, styrene demand will weaken seasonally. From the main downstream of styrene, with the approaching of the Spring Festival holiday, the operating load of styrene downstream will gradually decrease, and the support for styrene price will gradually weaken. The load drop of EPS and UPR is the most obvious.

On the whole, the current global styrene plant maintenance is less, while the styrene profit is fair, and the global supply is expected to rise. At the same time, the main downstream PS, EPS, ABS and UPR of styrene are facing load drop. Therefore, if there is not much maintenance of styrene plant next year, the downward pressure of styrene price in the first quarter of next year will be greater.