FOCUS: Demand casts shadow on SE Asia PS mkt

28 June 2006 08:29  [Source: ICIS news]

SINGAPORE (ICIS news)--Polystyrene (PS) producers across Southeast Asia have reduced operating rates amid poor demand for the resin, market sources said on Wednesday.

Buying interest has been weak since May as volatile styrene monomer (SM) feedstock values prompted buyers to adopt a cautious stance. At the same time, higher resin prices have squeezed margins of moulders who could not pass on the costs to their buyers.

These factors have resulted in lower PS purchases over the last two months, with suppliers reducing prices in a bid to entice buyers.

Offers were cut in mid-June to $1,340/tonne CFR Southeast Asia for general-purpose PS (GPPS) and $1,380/tonne for high-impact PS (HIPS), around $100/tonne lower than several weeks ago.

Buyers, however, remained non-committal and a supplier said sales had dipped by almost half in June.

Total Petrochemicals’ 75,000 tonnes/year high impact HIPS facility and Denka’s 150,000-200,000 tonnes/year GPPS unit in Singapore were operating around 60% of capacity,down from around 90% in May, according to industry sources.

Operating rates at Idemitsu Malaysia’s 140,000 tonnes/year unit in Pasir Gudang, Johor state, will be brought down to 70% from the current 95% in July.

In Thailand, output at Thai Petrochemical Industry’s 100,000 tonnes/year unit in Map Ta Phut, Rayong province, remained at 100% of capacity due to strong sales in the local market. However, a company source said that aggressive pricing by sellers in southern China and Hong Kong had put pressure on margins.

Sellers anticipated that demand was likely to pick up only from the second half of July, as the third quarter is the traditional manufacturing season in China.

By: Clive Ong
+65 6780 4359

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