Lead: Data for the first half of June shows crude oil down 13.58%, pure benzene down 7.38%, and Northeast Asian ethylene down 5.91%. Weakening feedstock prices are bearish for the market. Weekly demand for styrene from its main downstream "3S" (PS, EPS, ABS) fluctuates between 230,000 and 245,000 tons, remaining at a relatively low level. With both feedstock and demand weak, the styrene market has seen price declines. Data for the first half of June, taking East China as an example, shows styrene prices dropping 12.55%, a significant decline.

Entering June, as the US and Iran move closer to reaching a peace agreement, market concerns have eased, international oil prices have fallen, and the petrochemical market is bearish. Pure benzene and ethylene prices have declined, the feedstock side has weakened, adversely affecting styrene market sentiment.

Table 1: Changes in Domestic Styrene Feedstock Prices in First Half of June

| Feedstock | June 17 | May 29 | Change | Change % | Unit |
|---|---|---|---|---|---|
| NYMEX Crude Oil | 76.79 | 87.36 | -10.57 | -12.10% | USD/barrel |
| ICE Brent Crude Oil | 79.55 | 92.05 | -12.5 | -13.58% | USD/barrel |
| East China Pure Benzene | 7090 | 7655 | -565 | -7.38% | RMB/ton |
| CFR Northeast Asia Ethylene | 875 | 930 | -55 | -5.91% | USD/ton |

Source: chempricehub Information

Entering June, downstream of styrene, end-user production schedules have been continuously revised downward, dragging down the capacity utilization rates of PS and ABS. This has led to weak support for rigid demand from styrene downstream, persistently low spot demand, generally weak overall demand performance, and bearish market sentiment.

Entering June, styrene supply first decreased and then increased. Due to the weak market, spot demand for styrene has been persistently sluggish, making the overall spot supply of styrene relatively ample.

In summary, both feedstock and demand are average, strengthening bearish market sentiment, leading to styrene price declines.

Table 2: Changes in Domestic Styrene Prices in First Half of June

| Styrene Market | June 18 | May 29 | Change | Change % | Unit |
|---|---|---|---|---|---|
| Jiangsu Self-Pickup | 7840 | 8965 | -1125 | -12.55% | RMB/ton |
| South China Delivered | 7925 | 9210 | -1285 | -13.95% | RMB/ton |
| North China Delivered | 7925 | 8905 | -980 | -11.01% | RMB/ton |

Source: chempricehub Information

Market Expectations for the Next Cycle:

Feedstock Side: The US and Iran have signed a memorandum of understanding remotely and are about to enter the second phase of negotiations. The Strait of Hormuz will gradually reopen, significantly cooling geopolitical risks. Oil prices are expected to show an overall volatile-to-weak trend. For pure benzene, recent substantial price drops have preemptively factored in the decline in crude oil due to the negotiations. The mainstream negotiation range for East China pure benzene next week is expected to be 7100-7300 RMB/ton. For ethylene, truck transport and FOB prices are expected to remain weak. Dragged down by pessimistic expectations in the derivatives market, demand is unlikely to improve in the short term. Meanwhile, merchantable inventory is generally ample, providing insufficient fundamental support. Ethylene prices are expected to maintain a weak run in the short term. The recovery of naphtha cracking margins may drive Asian crackers to increase operating rates, releasing incremental supply. However, the weak demand side remains unchanged, and the supply-demand balance remains loose. FOB prices are expected to be under pressure and soften slightly. The feedstock side is expected to be weak, which is bearish for the styrene market.

Styrene Supply: Domestic styrene total output and industry capacity utilization are expected to continue a modest upward trend. In the next cycle, the weekly total output is estimated to be around 320,000 tons, corresponding to a capacity utilization rate of about 64%. In terms of plants, Zhejiang Petrochemical and Northeast Baolai have resumed production this week and will supply stably in the next cycle. Coupled with the planned restart of Zibo Junchen's unit, incremental market supply will be further released. Although Duschanzi Petrochemical will shut down for maintenance according to plan, resulting in output reduction, the overall increase from restarts outweighs the losses from maintenance, driving a slight upward trend in supply.

Downstream Demand: Based on current information, PS and EPS output is expected to decrease in the next cycle, while ABS output is expected to remain stable temporarily. Overall, demand for styrene from the 3S is expected to decrease in the next cycle, with a tentative estimate of weekly styrene consumption around 230,000 tons. This news is bearish for the styrene market.

Summary: Geopolitical risks have significantly cooled, oil prices are expected to weaken, and pure benzene may see post-decline consolidation. The impact on market sentiment from the cost side is expected to be bearish. In terms of styrene supply-demand news, domestic supply is expected to increase in the short term. Rigid demand from major downstream sectors is average, export shipments are temporarily stable, but spot demand expectations are poor, leading to an expected short-term reduction in overall demand. Considering the news factors, the short-term impact from costs and supply-demand is weak. The styrene market is expected to show a volatile-to-weak trend overall in the next cycle. The operating range for Jiangsu spot prices is expected to be 7700-8000 RMB/ton.