FocusAsia styrenics prices higher on feedstock but demand slow

05 August 2009 05:11  [Source: ICIS news]

By Clive Ong

SINGAPORE (ICIS news)--Styrenic resins suppliers in Asia have hiked offers in line with the run-up in feedstock styrene monomer (SM) values but sales remain slow due to the weak export demand, traders and sellers said on Wednesday.

Spot SM prices had climbed more than 7% over the last two weeks to above $1,100/tonne (€759/tonne) CFR (cost and freight) China, in tandem with buoyant energy prices at above $70/bbl, according to global market intelligence service ICIS pricing.

The higher SM cost prompted polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) sellers to raise prices this week.

Spot resins values were raised $20-40/tonne this week with general purpose (GP) PS quoted at $1,200/tonne CFR China and above, while ABS resins were offered around $1,450/tonne CFR China and above.

However, buying momentum for PS and ABS remained weak with the end-users keeping to the sidelines.

“The higher resin costs could depress demand further as factories have limited orders for finished products,” a trader in Hong Kong said.

The Chinese export sector remained in the doldrums as orders from the US and Europe had fallen sharply this year amid the global slowdown.

Meanwhile, resin producers said higher prices were inevitable, as margins had been eroded by rising raw material costs.

“We are negotiating with customers to accept the higher resin prices, as we have no other alternatives except to stop production,” said a Japanese producer.

Chinese demand for resins in August showed little signs of improvement from July, with most participants expecting the trend to last for the third quarter.

The weak demand situation was in stark contrast with previous years, where the third quarter was typically the manufacturing peak season in China.

“The exports sector had been adversely affected by the global downturn while the central government stimuli, aimed at the domestic economy, had only partially offset the shortfall in exports,” said another trader in Hong Kong.

($1 = €0.69)

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By: Clive Ong
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