Asia EPS makers cut offers by $30/tonne to lure buyers

21 March 2012 08:22  [Source: ICIS news]

SINGAPORE (ICIS)--A number of Asian expandable polystyrene (EPS) producers have reduced their offers this week by $30/tonne (€23/tonne) in a bid to engage buyers, market sources said on Wednesday.

Offers of packaging resins were quoted at around $1,670/tonne CFR (cost and freight) NE (northeast) Asia this week, down from $1,700/tonne CFR NE Asia last week, they said.

Some suppliers, however, maintained offers at $1,700/tonne CFR NE Asia, but conceded that buying interest was limited. Even those who quoted lower at $1,670/tonne CFR NE Asia are also having difficulty moving volumes.

“Even at $1,670/tonne, buyers are hesitant to commit,” said a producer in Taiwan.

Buying indications were heard lower at $1,650/tonne CFR NE Asia but most suppliers appear unwilling to commit at this price.

“The cost of production of EPS remains high, so it is difficult to drop prices too much,” said another maker in Taiwan.

Demand for EPS in the key China remains weak currently but could recover towards the middle of the year, when construction activities traditionally peak.

Apart from being made into styro-foam for packaging purposes, EPS is also used to make insulation panels for buildings and roads.

China’s EPS producers have reduced operating rates at plants to an average of 42% this week, down from 45-50% in the previous week, in view of mounting inventory.

EPS resins’ short shelf life of around six months deter manufacturers from overstocking.

Asian suppliers who export resins to Europe and the Middle East said demand from these regions has waned in recent weeks.

The debt crisis in the eurozone and escalating tensions between Iran and the US have dampened demand for resins from Asia.

($1 = €0.76)

By: Clive Ong
+65 6780 4359

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