Asian PS reverses downtrend on firm feedstock, energy futures

11 May 2009 04:06  [Source: ICIS news]

SINGAPORE (ICISnews)--Asia polystyrene (PS) prices reversed the downtrend late last week amid strong gains in energy futures and feedstock styrene monomer (SM) values, traders and producers said on Monday.

Prices of general purpose (GP) PS inched back towards the mid-$900s/tonne CFR (cost and freight) China mark last week after falling about 20% from the year’s peak of $1,125/tonne (€821/tonne) CFR China through second half April.

Expandable PS (EPS) similarly edged up to $1,050/tonne CFR China after shedding 15% of its value last month due to concerns over the sustainability of domestic Chinese demand.

Strong styrene monomer values and encouraging economic data from the US and China had bolstered confidence of stronger demand post Labour Day holiday, sources said.

“Positive economic signs from the US and China and the sharp rebound in SM cost had stemmed the resin price fall”, said a trader in Hong Kong.

However, some market players doubted the sustainability of the price rebound, citing that positive economic data could take a long time to translate into orders for Chinese factories.

Hence, the Chinese manufacturing season in the third quarter this year could still be much weaker than previous years.

Outlook for continued price uptrend for PS depends on both domestic and export demand in the key Chinese market.

“The Chinese government can intervene to stimulate the local economy but the exports sector depends on the global economic recovery, so there are still some uncertainties for the near term,” said a producer in northeast Asia.

($1 = €0.73)

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By: Clive Ong
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