FocusWeak Q3 demand, low SM values weigh on Asian styrenics

16 July 2009 11:25  [Source: ICIS news]

SINGAPORE (ICIS News)--Demand for styrenic resins in the third quarter (Q3) could stay soft due to continued weakness in the US and European economies, traders said on Thursday.

“Some large factories in Hong Kong and southern China had reported steep - some 30-50% decline in orders for finished products,” said a trader in Hong Kong.

The tight grip of recession in Western economies had curbed demand for China-made products, adversely affecting demand for resins like acrylonitrile butadiene styrene (ABS) and polystyrene (PS).

Demand for these resins was expected to be much weaker than the previous years, market sources said.

Resin traders in southern China said weak demand would likely persist from July to September.

“It is difficult to raise resin prices as demand looked likely to remain poor while SM (styrene monomer) values are under downward pressure,” said another trader in Hong Kong.

Apart from weak demand, styrenic resin prices were being weighed down by declining feedstock styrene monomer (SM) prices, traders said.

SM values had retreated to below $1,080/tonne (€766.8/tonne) CFR (cost and freight) China over the past two weeks from above $1,100/tonne CFR China, according to global chemical market intelligence service ICIS pricing.

Expectations of increased supply in August had exerted downward pressure on SM values, traders said.

Meanwhile, traders said spot prices of some brands of acrylonitirle-butadiene-styrene (ABS) resins remained below $1,400/tonne CFR China and Hong Kong, as poor exports had dampened suppliers’ initiatives to hike prices.

General purpose (GP) PS prices also showed signs of weakness this week with offers for resins of certain origins falling $30-40/tonne to mid-$1,100/tonne levels CFR China and Hong Kong.

($1 = €0.71)

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By: Clive Ong
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