Asian styrenics poor demand to continue - sources

01 October 2008 05:33  [Source: ICIS news]

SINGAPORE (ICIS news) – Demand for styrenics resins is likely to weaken further in the fourth quarter as the global economy teetered on the brink of a US-led recession, said producers and traders on Wednesday.

 

‘Demand has been slow since the start of the third quarter and look set to weaken in the fourth,’ said a producer in Taiwan.

 

The widening financial and credit turmoil in the US and Europe had reduced demand for China-made products, resulting in a drop in consumption for resins like polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS).

 

Recent import data from the Chinese Customs revealed that for the month of August, PS imports plunged 27% on year while ABS fell 21%.

 

‘The troubles in the US and Europe looked far from being resolved and that would dampen Asian economies over the next few quarters,’ said a trader in Hong Kong.

 

Orders for products at factories in China were limited since July as the nation prepared for the 2008 Beijing Olympic Games in August.

 

The much anticipated post-Olympics recovery did not materialise as key Chinese export destinations, US and Europe, were grappling with financial problems.

 

With its own domestic market experiencing decelerating growth, real estate and stock prices went on a free fall, the Chinese government reduced the benchmark one year lending rates and reserve ratios at banks in September in a bid to shore up its economy.

 

However, the effects of these measures might take a few quarters to filter through to the broader economy, industry sources said.

 

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By: Clive Ong
+65 6780 4359

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