Cost narrowly rises & industry expands production: PS Market Volatility Significantly Converges

[Introduction] Recently, the fluctuations in the Chinese PS market have narrowed. Taking Ningbo market's Green An Qingfeng 525 as an example, since September, prices have consolidated in the range of 7550-7600 yuan/ton, with an amplitude of only 0.7%. Costs have slightly increased, but after the PS industry expanded production, the pressure on the supply side has also increased. Industry production has recovered to a relatively high level within the year, but the demand recovery is slower than supply, resulting in noticeable short-term pressure on the supply side. High export tariffs and increased difficulty in obtaining national subsidies have weakened policy support. Overall, the upward resistance in the PS market remains significant.

Costs slightly rise & industry increases production, market fluctuations narrow.

Recently, the fluctuations in the Chinese PS market have narrowed. Taking Ningbo's Green Anqing Peak 525 as an example, since September, prices have been consolidating in the range of 7,550-7,600 yuan/ton, with an amplitude of only 0.7%. Costs have been narrowly rising, but with the PS industry's increased production, the pressure on the supply side has also grown. On the supply-demand side, industry profits have somewhat recovered and have been above the breakeven line since August. The production enthusiasm of some enterprises in East and South China has increased, and the impact of some previously overhauled devices restarting and new capacity being released is combined, leading to a rapid increase in industry output.

JiangsuStyrene priceFrom early September, the price increased from 7,000 yuan/ton to 7,195 yuan/ton on September 17, a rise of 2.79%. There has been a phased improvement in the supply and demand of styrene, and port inventories have also decreased. Additionally, the styrene price is relatively low, and during the process of reducing short positions, the styrene price experienced a slight rebound.

Profit Recovery & Release of New Production Capacity: Rapid Supply Growth in Mainstream Areas

With the new capacity release in Xinjun and Huizhou, combined with the increased production from facilities such as Lianyungang Petrochemical, Guangdong Xinghui, Guo'en Yisuo, and Foshan Yingliqi Benzene, the PS industry capacity utilization rate has risen to 61.9% in the week of September 5-11, 2025, an increase of 6.9% compared to early August. It is expected that PS output in September will be around 410,000 tons, a month-on-month increase of 3.5% and a year-on-year increase of 19.2%.

The impact of industry production increase leads to a halt in inventory decline and a rise in inventory levels.

Due to the recovery of industry production to a relatively high level within the year, but the pace of demand recovery not keeping up with supply, inventory has stopped declining and rebounded. As of September 11, domestic PS finished product inventory reached 90,000 tons, an increase of 7,000 tons from the low point of 83,000 tons in mid-August, representing an increase of 8.4%.

Market Influencing Factors Comparison for the PS Industry in the Future

Bullish Factors:

Styrene: Short termStyrene MarketThe significant reduction in supply is evident, with the styrene units at Zhenhai Lyondell and Lianyungang Petrochemical undergoing maintenance in October, leading to a short-term tight balance between supply and demand. However, the commissioning of new units at Jilin Petrochemical and Guangxi Petrochemical, along with the arrival of the low-temperature off-season, may shift the market from destocking to restocking. Market participants remain cautious about the sustainability of price increases and profit recovery.

Negative factors:

Supply and Demand: The industry's production has recovered to a relatively high level for the year, but the speed of demand recovery is not matching the supply, resulting in significant short-term pressure on the supply side. However, some facilities have maintenance plans in October, which may alleviate the supply pressure to some extent. Export demand is front-loaded, and high export tariffs along with increased difficulty in obtaining national subsidies have weakened policy support. Overall, the resistance to upward movement in the PS market remains substantial.