Asia’s EPS prices decrease on fall in feedstock SM prices

09 May 2012 10:54  [Source: ICIS news]

SINGAPORE (ICIS)--Asia's expandable polystyrene (EPS) prices slipped from around $1,700/tonne (€1,309/tonne) CFR (cost & freight) NE (northeast) Asia last week to mid-$1,600s/tonne CFR NE Asia this week, weighed down by falling feedstock styrene monomer (SM) prices.

SM prices fell to below $1,470/tonne CFR China on 9 May from above $1,500/tonne CFR China in the last week, according to ICIS.

“Weak crude and SM prices are exerting downward pressure on EPS values,” said a producer in Taiwan as a number of sellers added that lower EPS prices have failed to draw buyers forward.

End-users delayed commitments and kept to the sidelines, in anticipation of lower SM and EPS prices in the near term.

Demand from the Chinese construction sector, which peaks every June and July, has improved, and EPS producers in China have been increasing their operating rates to around 60% of capacity in recent weeks.

This is compared with run rates of 50% and below in first half of April and the month of March.

However, buyers have mostly stopped buying EPS this week as they are hoping to secure parcels at cheaper levels in the weeks ahead.

“The EPS price fall fuelled speculation that the resin values have further downside potential, hence buyers are delaying commitments”, said an EPS maker in China.  

Meanwhile, the Chinese exports sector remained largely weak as the poor economic conditions in the eurozone and the US have curbed demand for Asian-made goods.

“The Chinese exports sector usually improves in the third quarter each year but it is currently in the doldrums”, said a trader in Hong Kong as he anticipate further downward pressure on resin prices in May.

EPS is made into styrofoam which is used in packaging as well as insulation panels in buildings and roads.

($1 = €0.77)

By: Clive Ong
+65 6780 4359

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