Asian polystyrene falls 20% to two-year low

27 October 2008 03:23  [Source: ICIS news]

SINGAPORE (ICIS news)--Spot prices of polystyrene (PS) in Asia fell to a two-year low after a massive correction of more than 20% over the past month due to shrinking demand and concerns over a looming global recession, traders said.

 

Prices of general purpose (GP) PS fell to $1,175/tonne CFR (cost and freight) China last week, from $1,505/tonne CFR China a month ago. Packaging expandable (E) PS values declined to $1,175/tonne CFR China from $1,570/tonne CFR China, according to price data from global chemical market intelligence service ICIS pricing.

 

Concerns over a potential global recession had depressed demand in Asia.

 

The export-led Chinese economy, in particular, was expected to see its sizzling growth slowing to a single-digit pace this year. Data from the government showed that growth had slowed to 9.9% for the nine months ended September this year compared to the 12.2% expansion for the same time period in 2007.

 

“Slower demand from the US and Europe for China-made goods would curb consumption of resins like PS and EPS,” echoed traders in Hong Kong and southern China.

 

Resin facilities in China and the region had cut operating rates continuously since the third quarter to below 60%. Despite falling prices over the past month, buyers believed there would be further weakness in the months ahead. As a result, most had kept to the sidelines, and bought sparingly.

 

With crude oil continuing its downward spiral, outlook for petrochemical products remained bearish.

 

“We have stopped purchasing over the past two weeks, as prices are likely to fall further,” said an EPS buyer in SE Asia.

 

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By: Clive Ong
+65 6780 4359

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