Asia styrenics reverse losing streak on feedstock, demand

11 August 2010 11:16  [Source: ICIS news]

By Clive Ong

SINGAPORE (ICIS)--Asia polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) resin prices have been on the rebound since last week, ending a two-month price decline, traders and producers said on Wednesday.

PS and ABS offers rose nearly 5% to around $1,200/tonne (€912/tonne) CFR (cost and freight) China and $1,900/tonne CFR China respectively last week, according to ICIS data.

“Resin prices look set to increase further this week as feedstock styrene (SM) numbers continue to surge,” said an ABS producer.

SM prices rose from $975/tonne CFR China in mid-July to around $1,120/tonne CFR China this week.

“With SM prices continuing the uptrend, resin buyers are more willing to pay up,” said a PS producer in Taiwan.

Low inventories of resins among end-users after many weeks of slow purchases had prompted them to emerge from the sidelines.

“End-users are keen to replenish stocks as the Chinese manufacturing season is entering its peak,” said a trader in Hong Kong.

The manufacturing sector in China typically enters a peak in August which lasts till October each year. The finished products are exported to the US and Europe for the year-end holiday season.

PS resins are used in the packaging, toys and consumer electronics sector, while ABS is used in the office equipment, consumer electronics, toys and automotive segments.

Traders were also seen stocking some material in anticipation of further upside potential in prices in the weeks ahead.

However, most participants remained cautious amid the current economic uncertainties in the eurozone and the US, given that these are major export destinations for Chinese goods.

“The development in the major economies in the West over the next few months would have an impact on the demand for China-made goods and consequently styrenic resins,” said another resins producer in Taiwan.

($1=€0.76)

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Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Clive Ong
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