12 June 2008 05:12 [Source: ICIS news]
SINGAPORE (ICIS news)--Polystyrene (PS) prices have risen by 12% in India in the past month on high feedstock costs and severe supply concerns, suppliers and buyers said.
Diversion of styrene feedstock to produce expandable PS (EPS) to provide temporary housing for people in China’s Sichuan province had inhibited the production of other PS grades in Asia, adding to supply constraints, they added late on Wednesday.
In India, PS producers continued to maintain low production levels to contend with rising styrene and polybutadiene rubber (PBR) costs.
High impact PS (HIPS) producers, in particular, faced the heat from high PBR costs and some of them had to reduce production due to squeezed margins.
Supreme Petrochem, the largest PS producer in India, even declared a force majeure on PS exports due to high raw material costs.
PBR prices have been spiralling up due to limited supply, strong demand and soaring butadiene feedstock costs.
Producers had hiked June offers by $100-200/tonne to $3,300-3,500/tonne CFR (cost and freight) Asia on high BD, which had also surged nearly $400/tonne in the past month to around $2,400/tonne CFR Asia.
Robust demand from downstream tyre producers have also spurred PBR producers to hike their third-quarter contract targets to $3,400-3,500/tonne CFR Asia, up about 10-12% from the second-quarter contracts.
The gap between prices of HIPS and general purpose PS (GPPS), which does not use PBR, widened to $70/tonne, reflecting the high costs of PBR for HIPS producers.
Notional offers for GPPS were heard $100/tonne below HIPS offer levels.
A local producer had bought a southeast Asian origin HIPS cargo at a high $1,950/tonne CFR India to meet its export commitments, the producer said.
Prices of PS in India were at $1,720-1,740/tonne CFR for GPPS and $1,790-1,810/tonne CFR for HIPS last Friday, according to global market intelligence service, ICIS pricing.
A hike in domestic PS prices on 1 June, the third increase in a month, also boosted sentiment for imported cargoes.
Also boosting sentiment for PS was strong seasonal demand from the electronics and refrigerator segments.
Helen Yan contributed to this article
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