19 November 2008 03:56 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS news)--Spot prices of polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) fell to a fresh four-to-five year lows this week amid poor demand due to the gloomy global economy, said traders and producers on Wednesday.
General purpose (GP) PS values dropped to a five-year low below $750/tonne CFR (cost and freight) China. The last time GPPS prices were at such a level was in June 2003, based on data from global chemical market intelligence service ICIS pricing.
Similarly, ABS tumbled to a four-year low below $1,250/tonne CFR NE Asia, based on discussions from market sources.
Demand for styrenic resins in the export-led Chinese economy had waned as manufacturing activities slowed to a trickle. Recent announcements by the central government to stimulate the economy through infrastructure and low-cost housing projects had yet to filter through to the various petrochemical sectors.
‘It would take a few quarters for the economy to stabilise before it can recover,’ said a petrochemical producer in eastern China.
Resin values were expected to lose further ground in the weeks ahead as demand was expected to remain weak, traders added. With the dim outlook for the global economy, most players were projecting near term pessimism for the Chinese manufacturing sector.
The slide in PS values was expected to lose some momentum as the spread between GPPS and feedstock styrene monomer (SM) had narrowed to below $200/tonne, although the typical spread was around $100/tonne.
Meanwhile, traders expected ABS values to continue its decline. The spread between ABS and SM remained wide at more than $600/tonne currently while a $350/tonne gap was considered as normal.
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