04 January 2007 06:15 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS news)--Demand for polystyrene is expected to remain slack in 2007, following last year’s trend as current prices are too high, suppliers said.
Consumption of polystyrene (PS) had declined in 2006 due obsolesces of end-products, substitution by other plastics and high costs of the resins, suppliers and traders said.
Several producers said that once general purpose PS (GPPS) prices cross the $1,200/tonne mark, end-users would find difficulty in passing on the costs onto end-products.
As a result, this would make them switch to cheaper resins whenever possible, they added.
Chinese customs statistics showed a steady decline of PS resins imported into the country over the past few years.
In 2004, ?xml:namespace>
This year, industry players have anticipated a flat-to-3% decline in PS imports into
The phasing out of certain key end-products over the past years had reduced consumption of the resin. Consumers had taken preference for products which do not use PS, such as compact discs (CDs) and digital video discs (DVDs), over audio and video cassettes.
Demand of casing for cathode ray tube (CRT) monitors used in TVs and personal computers had also declined sharply as consumers started buying plasma and liquid crystal display (LCD) monitors.
Meanwhile, firm resin pricing, especially in the second half of this year, also weighed on demand. Since June, spot prices of GPPS had climbed above $1,250/tonne cost & freight (CFR)
Prices had increased steadily over the months to above $1,400/tonne CFR Hong Kong in December.
Sellers said such prices could not be accepted by moulders as prices of end-products remained low, noting that it was difficult to increase prices for these end-products as these are often low-value added items.
On the other hand, the outlook for expandable polystyrene (EPS) appeared more bullish with demand expected to improve further in 2007, producers in
The booming Chinese economy had boosted demand for packaging EPS used in packing a wide variety of items which
At the same time, the growing construction and building industry ensured that demand for block flame retardant EPS, which is used as insulation panels in building and bridges, remain buoyant.
East Chinese majors like the Heqiao group and Wuxi Xingda Foam Chemicals operated their plants at relatively higher rates in the fourth quarter this year compared to last, although it is typically a slow quarter.
Anecdotal accounts suggested that operating ratios at EPS facilities were some 15-20% higher compared to last year.
Taiwanese and Chinese makers had also found new export opportunities, to Europe,
Producers on the whole, believed that buying interest in
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