The 70th futures variety is here! The first day of listing of styrene was active, so there is no need to be afraid of "devil varieties", more pricing models are brewing
Styrene futures officially listed, the fifth chemical variety of Dashang
As the 70th anniversary of the founding of New China approaches, our country's derivatives market also ushered in the 70th variety. Styrene was officially listed today (26th), which is also the fifth chemical variety launched by Dashang.
The listing of styrene futures, for our country, the world's largest producer and consumer of styrene, will further escort thousands of enterprises in the industrial chain and an industry with a market size of more than 100 billion. Styrene has always been called the "devil variety", which refers to its frequent price fluctuations. With the listing of styrene futures and the increase in domestic styrene production capacity, the market will derive more pricing models.
It is worth noting that East China is a key area for styrene production and consumption, and it is also a key area for styrene futures designated delivery warehouses. According to the materials released by Dashang, 5 of the 7 designated delivery warehouses for styrene are in Jiangsu and 2 are in Guangdong.
Styrene market transactions were active on the first day of listing
On September 26th, styrene futures were listed and traded on the big exchange. The benchmark price of each contract was 8000 yuan/ton. After the opening at 9 o'clock, the market performed well. The main active 2005 contract, the price rose slightly after the opening, and the price of the forward contract fell.
Zhang Li of the Investment and Research Department of Yide Futures Industry believes that the cost of styrene is around 8,000 yuan/ton, the lowest profit of the three major downstream is 500 yuan/ton, and the spot price is around 8,700 yuan/ton, so there is support near 8,200 yuan/ton. The benchmark price is 8,000 yuan/ton, and the space below is not large for the time being. Trading in the short-term range of 8,000-8,300 yuan/ton, and long-term should pay attention to the short-selling opportunities brought by inventory-driven.
"The production capacity that is generally concerned in the market is the commissioning of 1.20 million tons of Zhejiang Petrochemical. It is expected to be put into production in November. If it is put into production on time, it will put great pressure on the market." Zhang Li said that 2020-2021 is the peak period for styrene production. From the perspective of planned production, styrene is expected to be put into production 2.27 million tons before 2020, and there are still 6.27 million tons of remaining production in 2020-2021. Only three companies still have maintenance plans in the second half of this year. The planned maintenance loss is near 97,000 tons, which is significantly reduced compared with the first half of the year. Overall, the domestic styrene plant will maintain a high operating rate. From the downstream perspective, according to the three major downstream companies in the case of all planned production, the corresponding absolute demand for styrene is 1.62 million tons, far lower than the output of styrene 2.27 million tons.
No more fear of "devil varieties", more pricing models are brewing
Styrene has always been called the "devil variety", referring to its frequent price fluctuations. On the one hand, upstream and downstream enterprises are more sensitive to changes in the commodity sector and the overall business environment. On the other hand, styrene costs have changed significantly, especially upstream crude oil prices, international trade frictions and international anti-dumping measures that began last year, which have a great impact on styrene production.
It is because of the volatile price of styrene that the cash market has always had a strong demand for risk management. Before the birth of styrene futures, it has given birth to more active domestic electronic orders and overseas futures, namely Huaxi Village Commodity Trading Center Styrene Electronic Plate and Singapore Exchange Styrene CFR China Index Futures.
Longzhong Information Styrene senior analyst Zhang Xuemei said that with the continuous launch of styrene plants in our country, it is expected that the domestic supply of styrene will be oversupplied by 2022, and styrene needs to be re-exported to deal with it. In the entire South East Asia region, because of the free trade zone agreement with China, the import tariff is zero, and the serious overcapacity of styrene in its country has made the probability of Singapore's styrene exports to China greater. While Malaysia, Vietnam, and Thailand, with Singapore as the main importers, have different levels of styrene imports, they are obviously affected by changes in the global supply and demand pattern and are China's main export targets. Secondly, India is also a good exporter, and the overall demand gap in South East Asia is within 1 million tons.
Zhou Jun, deputy general manager of Nantong Chemical Light Industry, said that with the listing of styrene futures and the increase in domestic styrene production capacity, the market will derive more pricing models. For enterprises, after listing styrene futures, enterprises can effectively avoid risks through some hedging operations. In the future, with the increase in production capacity, we will have a large number of styrene products exported, and the future market can also help the export trade to develop smoothly.
Aiming at the key areas of the industrial chain, East China has become a key area for styrene delivery warehouses
Styrene industry "upper oil and coal, next rubber and plastic" - the two major industrial chains of petrochemical and coal chemical industry, and the two major industries of synthetic resin and synthetic rubber, play an important role in the chemical industry chain. The styrene industry in our country has a market size of 100 billion yuan and more than 1,000 industrial enterprises.
Combing found that many listed companies are involved in the styrene industry chain. "Three Barrels of Oil" is a giant in domestic styrene supply. According to Longzhong Information data, in 2019, Sinopec Group, China National Petroleum Corporation, and CNOOC respectively accounted for 18%, 14%, and 4% of the national styrene supply, accounting for a total of 36%.
Maohua Shihua's styrene project in Beihai, Guangxi has also attracted much attention. According to the announcement, the company has reached a framework cooperation with the Management Committee of Tieshan Port (Linhai) Industrial Zone in Beihai, Guangxi to invest in the construction of a 250,000-ton/year styrene project in Beihai, with a total investment of 1 billion yuan.
Statistics also show that there are 45 domestic producers of styrene, a large number of trading enterprises (more than 1,000), and more than 190 direct downstream enterprises. If the production, processing and trade of downstream products of rubber and plastics are considered, the number involved exceeds 30,000.
It is worth noting that styrene is a hazardous chemical, and customers participating in the delivery must have relevant qualifications for the production, operation or use of styrene. Specifically, before the last trading day of the month before the delivery month, member units will enter their customers' hazardous chemical-related license information into the electronic warehouse receipt system and update it in a timely manner.
At present, East China is a key area for the production and consumption of styrene, and it is also a key area for the designated delivery warehouses of styrene futures. According to the materials released by Dashang, there are currently 5 of the 7 delivery warehouses designated for styrene in Jiangsu Province, namely Jiangyin West China Chemical Terminal Co., Ltd., Jiangsu Lishi Chemical Co., Ltd., Nantong Qianhong Petrochemical Port Storage Co., Ltd., Nantong Yanghong Petrochemical Storage and Transportation Co., Ltd., and Changzhou China Resources Chemical Storage Co., Ltd. In addition, there are two other warehouses located in Guangdong, namely Dongguan Sanjiang Port Storage Tank Co., Ltd., and Dongguan Baian Petrochemical Storage Co., Ltd.
