FocusMiddle East PS to weaken on soft feedstock costs, poor demand

By Gabriel Yip

SINGAPORE (ICIS)--Prices of polystyrene (PS) in the Middle East are expected to weaken in the coming weeks on the back of poor demand and weakness in values of feedstock styrene monomer (SM) and polybutadiene rubber (BR), market sources said on Monday.

Spot prices of general purpose PS (GPPS) in the region were assessed at $1,650-1,700/tonne CFR (cost and freight) East Mediterranean (East Med)/GCC, while high impact PS (HIPS) were at $1,860-1,950/tonne CFR East Med/GCC on 19 August, unchanged from the previous week, according to ICIS.

“SM and BR prices are on a downtrend and there should be a downward correction on PS prices in the region,” said a buyer based in the Gulf Cooperation Council (GCC) region.

High-cis BR was assessed at $4,400-4,600/tonne CFR NE (northeast) Asia, while low-cis BR was at $4,300-4,400/tonne CFR NE Asia in the week ending 18 August. Prices were stable week on week after shedding an average of $100/tonne from 4 August.

SM prices, meanwhile, were at $1,490-1,520/tonne CFR China on 19 August, ICIS data showed.

PS trades in the Middle East remained few as buyers shun current market offers coming from Asia, deeming them too high.

Producers in Asia are offering $1,950-2,000 CFR East Med/GCC for HIPS and $1,720-1760/tonne CFR East Med/GCC for GPPS, market sources said.

“I have not asked for [PS] offers over the last two weeks as the prices are too high at this point in time. Also, the converters are not looking to purchase at these prices,” added the East Med-based trader.

The Middle Eastern market for PS had traded sideways over the past two weeks, also on the back of volatile upstream markets.

Concerns about the health of the global economy continue to weigh on equities and commodities markets. US crude futures were trading at above $82/bbl at noon on Monday.

“Unless there is a downward correction in PS prices, buyers will remain on the sidelines,” said a GCC-based trader.

PS is used in packaging and in the manufacture of toys, consumer electronics, office equipment and household goods.