18 August 2009 05:59 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS news)--Spot prices of styrenic resins in Asia stagnated this week after running up sharply in the recent past as buyers expect values to come down on lower demand from ?xml:namespace>
Spot polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) prices rose 3-5% last week as rising raw material costs prompted suppliers to raise offers, according to global market intelligence service ICIS pricing.
However, the slump in energy values to $66/bbl (€47/bbl) from above $70/bbl over the weekend dampened sentiment. Buyers retreated to the sidelines in anticipation of weaker resin prices in the near term.
“Buyers have adopted a wait-and-see stance, given that crude prices have receded,“ said a resin trader in Hong Kong.
Buyers expected prices to weaken on the back of slow Chinese exports this year. The global recession had curbed demand for resins on the back of limited orders from the US and Europe.
While the stimulus efforts by the Chinese central government had boosted local demand, it could not cover the entire shortfall in exports.
The third quarter is typically the peak manufacturing season in China for exports but the poor showing this year so far had prompted talk that demand was unlikely to pick up.
“Orders for finished products remained slow into August and seem unlikely to improve significantly in the coming weeks,” said another plastics trader in Hong Kong.
On the other hand, suppliers were not thinking of lowering prices in the near term but had set higher price targets. Elevated feedstock costs continued to squeeze margins, causing producers to push for increases.
ABS sellers pushed for a $30-50/tonne increase in offers to $1,550/tonne CFR (cost and freight) China and above but prevailing bearish sentiment could prolong negotiations, sellers said.
“Some of these offers at $1,550/tonne CFR China/Hong Kong and above had been quoted in the market this week, but it would take some time to see if they could be accepted,” said a producer of ABS.($1 = €0.71)
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