23 July 2008 09:26 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS news)--Demand for styrenic plastics like polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) resins continue to wane in Asia on high values and expectations prices will fall with declining crude, said traders and suppliers on Wednesday.
The recent fall in crude values to below $130/bbl and their lowest levels since early June had dampened buying interest further, market sources said.
High resin costs had initially eroded the margins of end-users and caused most of them to buy on a need-to basis, however the recent drop in crude had prompted speculation styrenic resin values could decline sharply in the near term.
“The fall in crude values and subsequent decline in PS and ABS values had weakened demand further, as buyers mostly retreated to the sidelines,” said an eastern ?xml:namespace>
“Most buyers now think prices could fall further and have delayed purchases,” said a producer in northeast
Spot prices of PS (general purpose) slipped by $40/tonne to $1,720-1,740/tonne CFR (cost and freight) China last week, while ABS values edged lower to $2,170-2,200/tonne CFR NE Asia (northeast Asia).
Demand had been particularly weak at the start of the third quarter compared with previous years, despite the traditional manufacturing season in
Moulders had renegotiated contracts of finished goods with clients to increase prices, while some who were unsuccessful had cancelled orders in view of poor profitability.
Apart from high styrenic prices dampening demand, other factors that have cast a pall over the manufacturing sector include the tight credit policy adopted by the Chinese government, the restriction on transportation and production of 257 chemicals in eastern
As a result, demand for other styrenics is also lacklustre.
A styrene-butadiene asphalt latex (SBL) producer in
He estimated he would lose around a third of output in the third quarter.
A major trader in southern
Styrene-acrylic latex plants, the key consumer of SM spot cargoes in southern
Traders and producers were mostly unable to gauge whether demand would revive after the Olympic Games, as the manufacturing season in
Keny Jin also contributed to this article
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