Polymer Trends: PS prices shoot up

16 August 2004 00:01  [Source: ACN]

Higher styrene costs have knock-on effect on PS and ABS. Prices of other polymers increase despite concerns that small processors may not be able to afford material

PS: Prices for September cargoes surged by US$270-295/tonne, led by higher styrene costs (see page 25). Two deals for high-impact PS (HIPS) were settled at US$1430-1460/tonne cfr Hong Kong, up US$315/tonne from August prices. A 100-tonne HIPS deal was concluded at US$1550/tonne cfr SEA. Prices for general-purpose PS (GPPS) were US$270/tonne higher than in the previous month at US$1380/tonne cfr Hong Kong.

In the Taiwanese domestic market, HIPS rose by US$250/tonne to US$1460-1470/tonne delivered, while GPPS deals were US$230-240/tonne higher at US$1440/tonne delivered.

In the Chinese domestic market, prices moved up by Rmb2900-3000/tonne, with deals settled at Rmb13 200-13 500/tonne delivered for GPPS and Rmb14 000-14 300/tonne delivered for HIPS.

Many buyers in Taiwan were said to be keeping inventories at a minimum, while small Chinese buyers had reportedly stopped operations. A Taiwanese PS producer had cut its operating rate by 20% to 80% in August owing to high styrene costs. And a Chinese PS producer also said it had cut production to 30% from 50% in July.

But a Japanese trader claimed that PS demand in Hong Kong was strong, especially from the home-appliances sector, as buyers had started preparing products for the Christmas season.

HdPE: Prices rose by US$130-140/tonne on the back of high ethylene costs. August deals for injection-moulding grade were concluded at US$1030-1040/tonne cfr China while film grade was sold at US$1030/tonne cfr China.

Prices were slightly higher in parts of SEA with film grade sold at US$1100/tonne cfr SEA, US$190/tonne higher than in the previous month. A 300-tonne cargo of film grade was sold at US$1050/tonne cfr Philippines. A yarn-grade cargo for August shipment was concluded at US$1060/tonne fob Indonesia.

Chinese domestic prices also rose steeply. Prices were at Rmb10 450-10 500/tonne delivered in eastern China and Rmb10 600-10 700/tonne delivered in southern China, both Rmb1000-1100/tonne higher than in the previous month.

Supply in SEA was said to be very tight, especially in Indonesia where a local producer was operating its two lines at only 45% owing to the high cost of ethylene. A third line has been down for over a year. Domestic prices in Indonesia had risen to US$1200/tonne delivered, US$275-300/tonne higher than in the previous month.

LdPE: Prices continued to move up, with August deals settled at US$1250/tonne cfr China, US$250/tonne higher than prices for July cargoes. Domestic prices in eastern China were at Rmb12 900-13 400/tonne delivered and Rmb13 500-14 200/tonne delivered in southern China, Rmb900-1000/tonne higher than in the previous month.

The high prices had prompted some Chinese processors to implement significant operating rate cuts, said some industry sources. Production was down to 30-40% from the original 100%. Buyers were also said to be refraining from building up stocks..

LldPE: A 3000-tonne August cargo was sold at US$1030/tonne cfr China, US$120/tonne higher than prices in July. Despite the start of the agricultural season, demand was subdued. Many buyers had reportedly cut operating rates, as they were unable to absorb the high prices.

PP: Tight supply helped push up prices by US$180-200/tonne. A Taiwanese producer settled injection-grade business at US$1065/tonne cfr Hong Kong, US$180/tonne higher than in the previous month. And two deals for raffia grade were concluded at US$1050/tonne cfr China and US$1030/tonne cfr SEA, US$185-205/tonne higher than in the previous month.

Domestic Chinese prices were at Rmb10 400-10 750/tonne delivered in eastern China and Rmb10 600-10 700/tonne delivered in southern China, Rmb1850/tonne higher than in the previous month.

Copolymer was sold at US$1100/tonne cfr China, US$180/tonne higher than in the previous month. A Japanese trader said many buyers were trying hard to secure spot material for August and September, but very few cargoes were available in the market.

Demand in the Philippines was estimated to have fallen by 10% year-on-year, with small processors increasingly relying on recycled material

ABS: High styrene costs and tight supply resulted in a US$260/tonne increase in September prices with deals settled at US$1550/tonne cfr Hong Kong. A similar trend was also observed in SEA where prices rose by US$270-300/tonne to US$1570/tonne cfr Singapore. Some offers were even higher at US$1600/tonne cfr Malaysia. In the Taiwanese domestic market, business was transacted at US$1530-1540/tonne delivered, US$240-250/tonne higher than in the previous month.

A producer said demand was very strong especially from the information technology sector in SEA due to a bullish export market. ABS demand was expected to stay strong until October as buyers would be preparing for the Christmas season. And buyers were said to be building inventories despite the high prices, as they expected ABS prices to remain firm throughout Q3.

PVC: Producers nominated a US$70-80/tonne hike in September contracts, with Japanese and South Korean producers eyeing US$890-900/tonne cfr China. A Taiwanese supplier was seeking US$870-890/tonne cfr China.

Prices in the spot market also moved up. A 3000-tonne September shipment was negotiated at US$880/tonne cfr China, up US$50/tonne from July. In the Chinese domestic market, deals were concluded at Rmb8500-8600/tonne delivered, Rmb500-600/tonne higher than prices in July.

The 75-day shutdown of Qilu Petrochemical’s 230 000 tonne/year vinyl chloride monomer (VCM) and 230 000 tonne/year PVC plants last month, and a power shortage, had affected supply in the Chinese market. PVC availability was expected to remain tight in Q3.

The PVC price hike was also supported by an upward movement in VCM, which had hit US$740-750/tonne cfr China for September cargoes, US$40-50/tonne higher than August prices.

BULK POLYMER PRICES, US$/TONNE

	NE Asia	SE Asia
HdPE
Film grade	1030	1100
Yarn and injection moulding	1030-1040	1100
LdPE
GP film grade	1250	1130-1150
LldPE
GP film grade	1030	1030
PP
Film grade	1080	1050-1060
Raffia and injection moulding	1050-1065	1000-1030
GP copolymer	1100	1100
PS
General purpose	1380	1500-1575
High impact	1430-1445	1550-1580
ABS
GP grade	1550	1570
PVC
GP suspension	880-890	880-900
The above prices are a guide to market levels and were compiled by the ACN team in the middle of the week before publication. Prices are on a cif basis for NEA and cfr basis for SEA for September arrival shipment. Special grades or material will command premiums.

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