China SM Stocks at Highest Level Since Aug, But Still Below 2012 Average

Styrene monomer stocks in shore tanks in East China rose week on week by about 10,000 mt to roughly 66,000 mt this week -- the highest level seen since early August 2012 -- but still relatively low, market sources said.

Whether the rise of 10,000 mt in a week -- the biggest increase seen since June last year -- is due to the arrival of arbitrage cargoes or slowing production before the Lunar New Year holidays in February remains unclear.

"I think it is more on account of slowing consumption," one trader said Thursday, while another attributed it mostly to the arrival of European and Iranian cargoes.

It has been said in the market for a long time that arbitrage cargoes from the US and Europe are headed for the Far East, expected to arrive from late January to February and March, with trade sources earlier estimating the total amount as high as 80,000-90,000 mt.

Despite the week-on-week rise, stocks are relatively low compared with the average for 2012 at 86,004 mt, according to Platts data.

"The normal level is around 75,000-80,000 mt," a trade source said.

The inventory level touched a three-year low of 35,900 mt in the last week of September last year due to feedstock benzene supply tightness, maintenance at Northeast Asia plants and reduced shipments from the US.

The highest inventory level in 2012 was recorded in the first week of February at 151,300 mt, while the highest recorded level was 179,000 mt in the last week of February 2011, according to Platts data.