02 July 2008 09:37 [Source: ICIS news]
SINGAPORE (ICIS news)--Asian polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) resins are holding on to their record prices amid buoyant crude values, traders and producers said on Wednesday.
"Both PS and ABS prices had run up sharply over the past two months and values have stabilised since last week," said traders in Hong Kong.
Spot PS (general purpose) prices rose from $1,510/tonne CFR (cost and freight) China in early May to $1,750/tonne CFR China this week, while ABS numbers surged by more than $300/tonne since early May to reach $2,150-2,200/tonne CFR China in late June.
"Record crude prices above $144/bbl had put pressure on PS and ABS margins," said a producer in northeast (NE) Asia.
Traders believed that PS and ABS prices had limited downside in the near term as producers were determined to sustain prices and margins.
However, heightened resins costs had dampened demand in the key Chinese market. While the third quarter is typically the seasonal manufacturing peak, end-users were buying on a need-to basis.
Moulders were renegotiating with clients to increase prices of finished products as high resin costs had eroded profits while others cancelled orders as they could not turn a profit.
Overall, demand for PS and ABS was expected to be lower compared to the same time last year, traders said.
Suppliers of PS and ABS, however, could not let prices fall as feedstock costs had escalated in line with crude numbers. Most suppliers said they had to push through price increases or reduce and halt production.
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