China styrene prices continue fall

13 December 2007 03:44  [Source: ICIS news]

SINGAPORE (ICIS news)--The Chinese domestic styrene (SM) market continued to weaken this week with ample inventories and slow demand weighing on prices, said traders and end-users on Thursday.

The influx of deep-sea parcels had caused eastern China shore tanks to be bloated, said a trader in eastern China. On top of that, suppliers in northern China had sent their unsold volumes down to the country’s east as they too faced the double whammy of dwindling demand and falling prices.

Trader estimated pegged eastern tank inventories at above 70,000 tonnes, more than double of 30,000 tonnes in the first half of October.

At the same time, the downstream styrenic resins sector entered its lull season. A number of polystyrene (PS) and expandable polystyrene (EPS) facilities had reduced operating rates in view of slow end-user demand and mounting stocks. Some units were reported operating at 50%.

Spot SM prices in eastern China fell to yuan (CNY) 10,600-10,700/tonne ($1,438-1,452/tonne) ex-tank this week, a decline of CNY700-800/tonne from last week and nearly CNY2,000/tonne from a month ago, according to global chemical market intelligence service ICIS pricing.  

A number of local producers slashed prices aggressively in a bid to sell more volume, said traders. The Chinese government’s initiatives throughout the year to rein in excess liquidity and to cool its red-hot economy have reduced the availability of cash and credit.

This prompted some suppliers to liquidate inventories to raise cash for loan repayment. Traders similarly kept lean inventories in view of uncertain demand.

"Most dealers and middlemen were not keen to have cash tied up in inventories given current falling prices. Hence there is a tendency to cut prices and liquidate, further exacerbating the price decline," said a domestic trader.

($1=CNY7.37)

By: Clive Ong
+65 6780 4359

< previous article(VIDEO - ICIS news Europe Lunchtime Bulletin 2 November 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly