FocusAsia styrenics downtrend to persist

13 November 2008 03:55  [Source: ICIS news]

By Clive Ong

 

SINGAPORE (ICIS news)--Asia polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) may continue to tumble given a wider-than-usual price gap with feedstock styrene monomer (SM) values and persistent weak demand, traders and producers said on Thursday.

 

A margin of some $200/tonne (€160/tonne) remained between current general purpose (GP) PS prices and SM values, prompting talks of further falls in resin numbers since the traditional spread is only $100/tonne, market sources said.

 

“Resin prices would likely trend lower as buyers deemed prices still high, taking into account current SM levels,” said a Japanese resin manufacturer.

 

Spot prices of GPPS had plunged more than 50% to $800/tonne CFR (cost and freight) China this week, from the peak of $1,765/tonne CFR China set in July this year, according to global chemical market intelligence service ICIS pricing.

 

ABS prices slipped below $1,350/tonne CFR China this week from $2,200/tonne CFR China in July.

 

“PS and ABS prices are playing catch-up. While SM values had stabilised since last week, a wide gap remains between resins and monomer prices,”said a Taiwanese resin producer.

 

Poor demand continued to plague the styrenics market in Asia. The financial rout in the US and Europe had reduced demand for China-made products, which in turn curbed consumption of PS and ABS, said market participants. 

 

Traders believed that buying momentum would remain slow for the next few months, given the uncertain global economic outlook.

 

Some even projected that demand would improve only from May next year when the next manufacturing cycle in China starts.

 

($1 = €0.80)

 

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By: Clive Ong
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