09 July 2009 07:10 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS news)--Expandable polystyrene (EPS) makers in Taiwan and China have slashed operating rates due to shrinking demand from the recession-hit US and Europe and bleak prospects for next month, industry sources said on Thursday.
Manufacturing and re-export activities in Hong Kong and southern China had taken a hit this year as orders for finished goods from Europe and the US had fallen amid the economic downturn.
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Consequently, demand for EPS resins, which is made into styro-foam for packaging, was weaker than previous years.
Several EPS sellers believed the weak demand could last into August, given that there was no significant pick up in orders among the factories.
“Typically, most orders would have arrived by now, so based on the current limited amount of orders, demand for EPS would likely remain lacklustre in the third quarter," said a Taiwanese producer.
Major EPS plants in
Major producer the Loyal Group, which has a total ouotput of more than 800,000 tonnes/year in Asia, had been alternating production at its four facilities in China, namely Ningbo, Jiangyin, Tianjin in eastern China and Dongguan in southern China, market sources said.
Chinese major Wuxi Xingda Foam Plastics has also been operating below 60%, according to market sources. Its plants in
Its new plant in Huizhou, with an initial capacity of 180,000 tonnes/year has been completed and is scheduled to start up in the third quarter.
Taiwanese plants were also operating at below optimum. The Ming Dih Group and Taita Chemicals kept their Taiwanese plants at around 70%, as weak Chinese and export demand had resulted in poor sales.
Demand for expandable polystyrene (EPS) resins in Asia has remained weak despite July being the start of the traditional manufacturing and exports season in
The Chinese construction sector, which uses block flame retardant EPS, was also lacklustre. Consumption had fallen short of previous years levels despite the central government’s efforts to stimulate the local economy.
“Buying momentum is weaker than previous years and we have to operate at lower levels to avoid stockpiling,” said a Taiwanese producer.
Other Chinese EPS producers include The Hao Hua Group, Garson Chemicals, Yangzi BASF and Nijiaxiang Chemicals.
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