Polymer Trends: PS soars on styrene

28 February 2005 00:01  [Source: ACN]

PS prices follow styrene upwards, but buyers are delaying purchases until the market is less volatile. HdPE producers report negative margins

PS: Prices soared on the back of surging styrene costs. Many buyers were adopting a wait-and-see stance last week to get a clearer view of the market’s direction. ‘There is no clear indication of where prices are heading in the market and the major PS producers keep revising their offers. The PS market is extremely volatile, causing many buyers to delay purchases,’ said a Hong Kong trader.

Prices of general-purpose PS (GPPS) were at US$1260-1280/tonne cfr NEA, US$160-180/tonne higher than in January. In SEA, prices increased by US$120-130/tonne to US$1280/tonne cfr SEA. In the Chinese domestic market, deals were concluded at Rmb12 400–12 600/tonne delivered, Rmb1300/tonne higher than in January.

For high-impact PS (HIPS), prices surged by US$190-210/tonne cfr NEA to US$1320/tonne cfr NEA. In SEA, prices were at US$1320/tonne cfr SEA, US$140/tonne higher than in January. In the Chinese domestic market, deals were concluded at Rmb12 800–13 000/tonne delivered, Rmb800–1000/tonne higher than in January.

HdPE: Prices rose by US$50-60/tonne from January, but producers still faced negative margins as the rise in ethylene costs was even steeper at US$70-80/tonne.

Some South Korean suppliers were offering material at US$1100/tonne fob Korea to customers in South America and Africa, but there were no buying ideas.

A few Chinese customers accepted US$1100/tonne cfr China for small film-grade parcels. But bigger parcels were finding it difficult to attract buyers.

Attempts to offer material at US$1100/tonne cfr SEA proved futile, as customers were not willing to pay more than US$1080/tonne cfr SEA – the level at which the last deal was concluded.

Producers were expecting prices to rise in the next few weeks, as inventories of Chinese buyers fall. However, there was some concern about a possible price fall after BP Secco’s plant in Shanghai starts up on 18 March.

LdPE: A South Korean supplier was hoping to conclude a deal with a South American customer at US$1300/tonne fob Korea, US$100/tonne higher than the price for a January cargo.

An SEA producer sold February cargoes at US$1200/tonne cfr China/SEA, and was hoping to raise its offers by US$100/tonne for March, as supply was tight and demand robust.

LldPE: Prices followed the same direction as hdPE.

Demand was said to be good, but not too many enquiries were reported.

PP: Market sentiment strengthened, with homopolymer prices increasing by US$150/tonne from January, to US$1120/tonne cfr NEA/SEA. One small parcel was sold to a Vietnamese buyer at US$1150/tonne cfr SEA.

Producers were looking to raise offers to US$1130-1140/tonne cfr China, but buying ideas were at only US$1100-1110/tonne cfr China.

Copolymer prices rose by US$40-50/tonne from January, to US$1200/tonne cfr NEA/SEA.

ABS: Prices soared on the back of high styrene and benzene costs. Industry players were expecting prices to continue rising on the back of an anticipated increase in demand after the Lunar New Year holidays.

A South Korean producer said it was trying to increase prices to the US$1520-1530/tonne cfr China range, but was facing tough resistance from buyers. ‘Most of our buyers are toy producers and electrical appliance manufacturers,’ said the South Korean producer. ‘But we expect buyers to be more receptive to our increased offers once the Lunar New Year holidays are over as they are holding very low levels of inventory.’

A Hong Kong trader said many of its buyers from the toys and electrical appliance parts segments were left with almost no margins owing to the steep increase in ABS prices. ‘Many of my buyers will renegotiate with their customers in the US and the EU in March,’ said the trader. ‘If most of them manage to achieve the 3-5% price increase they are targeting, they will probably stop resisting the rise in ABS costs,’ the trader said.

Prices in NEA were at US$1500/tonne cfr NEA, US$150-200/tonne higher than in January. In SEA, prices were relatively unchanged at US$1410-1430/tonne cfr SEA, the reason being that prices had already hit a high in January. In the Chinese domestic market, deals were concluded at Rmb14 400–14 800/tonne delivered, Rmb1200–1600/tonne higher than in January.

PVC: Prices started increasing as buying sentiment improved after the Lunar New Year holidays.

The major South Korean, Japanese, and Taiwanese producers said they had sold out their March contract material and had no material left for the spot market.

‘Demand in China had not exactly picked up sharply, but many buyers were eager to secure material as they were anticipating future price increases in April and May,’ said a South Korean producer.

Another South Korean producer said it expected PVC prices to continue increasing in the next two months and hit the US$950-970/tonne cfr China range by mid-April. ‘Ethylene prices are pushing up ethylene dichloride and VCM [vinyl chloride monomer] prices. Meanwhile, aside from Chinese demand, domestic demand is also expected to pick up in the coming weeks,’ said the South Korean producer.

Meanwhile, March contract prices increased by an average of US$50-70/tonne from February contracts. A Japanese producer settled at US$910-920/tonne cfr Asia, while a second Japanese producer settled at US$920-930/tonne cfr Asia. A South Korean producer settled at US$910-920/tonne cfr Asia, while a second South Korean producer settled at the same level. A Taiwanese producer settled contracts at US$900-910/tonne cfr Asia.

In the spot market, prices were at US$900-910/tonne cfr SEA/NEA, US$40-60/tonne higher than in February.

In the Chinese domestic market, prices were Rmb7900–8100/tonne delivered, relatively unchanged from prices in February.

BULK POLYMER PRICES, US$/TONNE

	NE Asia	SE Asia
HdPE
Film grade	1100	1080
Yarn and injection moulding	1100	1080
LdPE
GP film grade	1200	1200
LldPE
GP film grade	1100	1080
PP
Film grade	1120	1120-1150
Raffia and injection moulding	1120	1120-1150
GP copolymer	1200	1200
PS
General purpose	1260-1280	1280
High impact	1320	1320
ABS
GP grade	1500	1410-1430
PVC
GP suspension	900-910	900-910
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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