FOCUS: Taiwan EPS makers to expand

07 May 2007 08:28  [Source: ICIS news]

By Clive Ong

SINGAPORE (ICIS news)--Major Taiwanese expandable polystyrene (EPS) makers are growing their capacities to tap lucrative export markets in Europe, the Middle East and Africa, producers said on Monday.

Prices in Europe have been enjoying increasing premiums over Asia, providing arbitrage opportunities for Asian sellers to ship parcels over.

In June 2006, prices in Europe were only around $259/tonne higher than Asia. This increased to $531/tonne in September.

By March 2007, prices in Europe were some $650/tonne higher than Asia, according to global chemicals market intelligence service ICIS pricing.

“China is oversupplied and a price-sensitive market. As such, we hope to export our products to other more lucrative export markets in Europe, the Middle East and Africa,” a source at Ming Dih Group said.

Ming Dih is in the process of expanding its Taiwanese unit by around 30% to more than 160,000 tonnes/year. The works are expected to finish in July.

It has two other facilities in China and one in Thailand with a total combined output of 340,000 tonnes/year currently. After the expansion in July, its total output is expected to reach 376,000 tonnes/year.

Another major Taiwanese EPS producer, Loyal Group, also plans to increase their capacities to focus on the growing demand in China as well as export opportunities in the Middle East and Europe.

“We also see potential in markets outside Asia such as in the Middle East and Europe and currently export up to 30% of our output,” a source at Loyal Group said.

The company operates five plants across Taiwan and China with a total output of 800,000 tonnes/year. It is currently expanding its Jiangyin and Ningbo units by 150,000 tonnes/year at each site.

Construction is expected to complete by the end of the year, bringing the company’s total output to 1.1 m tonnes/year.

Another Taiwanese producer, Taita Chemicals, is heard to be considering building a new facility in China. The company has two plants in China with a total output of 250,000 tonnes/year.

“The additional capacities will cater for the export market, as China, although growing, remains in an oversupply, said a source at Taita Chemicals.

Some market players estimate the supply to demand ratio of EPS in China at two- to-one.

Plants in China seldom operate at optimum rates as consumption remained far below supply. Most facilities operate at an average of around 50-70% a year, said a Taiwanese producer.

The increased availability of feedstock styrene monomer (SM) in Asia was also another important factor prompting EPS suppliers to expand their capacities.

SM supply in the region has increased with the start up of Formosa Chemicals and Fibres Corp’s (FCFC) new 600,000 tonnes/year unit in Taiwan in Q2 and the expansion at Samsung Total’s No. 2 unit in Daesan, expected to be completed in June.

By: Clive Ong
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