Lead-in: Domestic styrene market experienced a notable decline from June 19 to June 26, 2026. As of June 26, the average spot price in Jiangsu settled at 7,325 CNY/mt, down 515 CNY/mt or 6.57% from June 18. This downturn was not triggered by a single factor but was collectively pressured by multiple bearish elements, including declining costs, increasing supply, weakening demand support, and compressed industry chain profits.

1. Geopolitical risk premium rapidly fades; international oil prices crash, triggering cost collapse

Brent crude oil weekly average price plummeted from USD 83.88/barrel to USD 77.14/barrel, a single-week drop of 8.04%. The primary reason for this oil price decline was the rapid dissipation of geopolitical risk premiums. Navigation through the Strait of Hormuz continued to improve, the US and Iran announced a resumption of technical negotiations on the 30th of this month, and oil-producing countries such as Iraq plan to accelerate production increases. These three factors combined led to the rapid squeeze-out of the geopolitical risk premium that had previously supported high oil prices.

The crude oil crash quickly transmitted to the aromatics chain. East China pure benzene spot weekly average price fell to 7,129 CNY/mt, down 237 CNY/mt or 3.22% from the previous week. Although fundamentals such as concentrated maintenance at domestic refineries, tight overall commercial supply, and continued destocking at East China ports provided phased support for pure benzene, the substantial weakening of crude oil exerted cost pressure. Pure benzene prices lacked recovery momentum, making the bearish downward trend difficult to reverse. Consequently, the persistent weakening of the cost side directly undermined the price support foundation of the styrene market, significantly intensifying bearish sentiment.

2. Increased domestic supply coupled with higher arrivals lead to inventory accumulation on the supply side

The overall supply situation is characterized by rising domestic output and increasing port inventory, both exerting downward pressure on styrene prices.

On the domestic supply front, styrene weekly production reached 331,100 mt, an increase of 14,800 mt or 4.65% week-on-week, with capacity utilization rising to 66.42%, up 2.96% week-on-week.

Regarding imports and port inventory, import volume for the period was 2,000 mt, an increase from the previous period. As for port inventory, as of June 22, the total sample inventory of styrene at Jiangsu ports reached 104,800 mt, an increase of 15,200 mt or 16.96% compared to the same period last week; commercial inventory stood at 69,800 mt, up 11,000 mt or 18.71%. From the circulation perspective, from June 15 to 21, arrivals at Jiangsu ports were 47,400 mt, while deliveries were only 32,200 mt. Arrivals significantly exceeded deliveries, confirming the accumulation trend.

3. Demand sees "volume and price decline"; all three major downstream sectors under pressure

During this period, the total consumption volume of the three major downstream sectors (PS, EPS, ABS) was only 222,900 mt, a significant decrease of 18,300 mt or 7.59% month-on-month. More notably, not only did downstream consumption volume decline, but their own product prices also fell simultaneously, presenting a classic pattern of declining volume and price.

Breaking down by sector:

• EPS: Capacity utilization plummeted from 57.00% to 48.49%, a sharp single-week drop of 8.51%, the largest decline among the three major downstream sectors. EPS prices also fell by 565 CNY/mt (-5.95%), primarily because the industry entered the traditional demand off-season, combined with continuously weakening cost support. Market participants lacked confidence, exhibited strong wait-and-see sentiment, avoided forward orders, and some even offered discounts to move goods. Industry transaction atmosphere was poor, with an obvious supply-demand imbalance.
• PS: Capacity utilization decreased from 46.70% to 44.30%, down 2.40%. PS prices fell by 652 CNY/mt (-7.13%) during the period. Some units in Zhenjiang and Zhangzhou reduced production, while some units in Ningbo and Lianyungang increased output, but overall supply changes were minor. Downstream order-taking was cautious, market transactions were lackluster, and some inventories saw slight increases.
• ABS: Capacity utilization remained flat at 58.10%, but prices still fell by 200 CNY/mt (-1.99%). There were no obvious production cutbacks by ABS manufacturers, keeping output at high levels. However, end-user demand remained persistently weak. Traders continuously lowered quotations, and producer inventory pressure kept mounting. Prices of raw materials (acrylonitrile, butadiene, styrene) continued to weaken, coupled with accelerating crude oil declines, further intensifying bearish market sentiment.

Overall, downstream demand volume decreased, and the willingness for spot purchases was low. The "buy on rising, not on falling" mentality was fully reflected in the market. Demand-side support for styrene was limited; instead, the slowdown in procurement pace exacerbated upstream inventory build-up pressure.

4. Industry chain profits uniformly under pressure; losses for non-integrated units widen sharply

During the period, the profit decline for styrene products was noticeably faster than that of upstream or downstream sectors. For this period, the theoretical weekly average profit for domestic non-integrated styrene units was -667 CNY/mt, a decrease of 289 CNY/mt from the previous period, widening the loss by 76.46%. The spread between pure benzene and styrene remained within a range of 575-680 CNY/mt during the week. The continuous narrowing of this spread directly compressed the profitability of non-integrated units. During the decline of crude oil and pure benzene prices, styrene followed the downward trend faster and more sharply, causing the spread to contract rather than expand, reflecting the weaker fundamentals of styrene compared to pure benzene.

Market Outlook: Short-term weakness hard to change, but attention needed on crude oil and other factors

• Cost side: Geopolitical risk premiums are continuing to be squeezed out. The oil price center is expected to shift further downward. Cost support is unlikely to recover in the short term.
• Supply side: Styrene production and port inventories are expected to increase next week, with no let-up in supply pressure.
• Demand side: Downstream demand volume is expected to recover, providing some boost to the market.
• Profit side: If losses for non-integrated units continue to widen, it may force a passive contraction on the supply side (reducing output to support prices).

Therefore, in the absence of sudden unit failures or macro event disruptions, the styrene market is more likely to continue its weak performance next week. The expected trading range for Jiangsu spot prices is 7,200-7,600 CNY/mt. However, given the severe losses for non-integrated units, supply-side production cuts due to losses could be triggered, potentially leading to a new turning point for market supply-demand dynamics. Subsequent focus should be on tracking crude oil trends, unit operational changes, exports, and market sentiment.