04 June 2012 00:00 [Source: ICB]
Falling values of styrene monomer feedstock and weak demand in Asia put downward pressure on the polymer
Spot prices for expandable polystyrene (EPS) in Asia are under downward pressure from continued weakness in the upstream styrene monomer (SM) market and softening demand.
Packaging resins were offered at around $1,600-1,630/tonne (€1,260-1,290/tonne) CFR (cost and freight) NE (Northeast) Asia in the week ended May 25, down by about 5% from early May. However, there has not been much buying interest, market players said.
China's weakening property sector is curbing EPS demand
Prices of feedstock SM fell to around $1,360/tonne CFR China in the week ended May 25, down by more than 9% from early May amid a flaring up of concerns over the eurozone debt crisis.
One producer in Taiwan reported that EPS customers were lobbying for parcels below $1,600/tonne, with some indications at around $1,550/tonne. Most sellers reported limited deals done in the week ended May 25.
Weak economic conditions in the US and the eurozone are expected to continue to curb demand for Asia-made goods. Also cooling off is China's property sector, which is a major end-user of EPS. Suppliers of the resins anticipate that consumption of block flame-retardant resins for insulation panels used in buildings could decline.
A few suppliers quoted prices below $1,600/tonne CFR NE Asia, and some conceded that prices will have to decline if sellers wanted to engage customers.
There is expected to be limited buying interest at $1,600/tonne CFR NE Asia and above, and most buyers are looking at around $1,550/tonne, according to another Taiwan-based producer.
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