Emergence of deep-sea cargoes weighs down Asia styrene

17 September 2009 05:27  [Source: ICIS news]

SINGAPORE (ICIS news)--The re-emergence of deep-sea parcels is exerting downward pressure on styrene monomer (SM) values in Asia - to the tune of $20/tonne (€13.6/tonne) - reversing last week’s price uptrend, traders and brokers said on Thursday.

SM spot prices in Asia rebounded last week when deep-sea parcels were placed to China and Taiwan. Spot numbers into the key Chinese market rose $20-30/tonne to around $1,080-1,090/tonne CFR (cost and freight) last week, according to global market intelligence service ICIS pricing.

However, the price uptrend fizzled out this week when lower offers for October and November deep-sea cargoes re-appeared. Brokers in Asia said cargoes from the US and the Middle East were available on a spot basis, for arrival in October and November.

Several end-users in Taiwan and China reported offers for October deep-sea cargoes at around $1,050/tonne CFR, LC (letter of credit) 30-60 days.

“These offers are around $20/tonne lower than the quotations for Asian cargoes at around $1,070/tonne CFR, LC 90 days,” said a buyer in Taiwan.

However, most buyers remained in a wait-and-see stance, believing that prices had further downside potential in the near term.

“Energy prices had rebounded above $70/bbl, but SM values continued to sag which showed that demand had tapered off,” said a Korean trader. 

Demand for styrenic resins like polystyrene (PS), expandable polystyrene (EPS) and acrylonitrile-butadiene-styrene (ABS), had weakened ahead of the long National holidays in China starting 1 October.

Meanwhile, plastics demand post the Chinese National Day holidays remained uncertain with some resin players anticipating minimal pick-up, citing the recession in the US and Europe curbing consumption of China-made products this year.

($1 = €0.68)

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By: Clive Ong
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