Asia suppliers reduce EPS offers by $40 /tonne on weak demand

12 June 2012 07:56  [Source: ICIS news]

SINGAPORE (ICIS)--Asian producers of expandable polystyrene (EPS) resins have lowered their offers on Tuesday to around $1,500/tonne (€1,200/tonne), down by about $40/tonne from last week, upon strong lobbying by buyers, market sources said.

Buyers insisted on lower EPS prices after values of feedstock styrene monomer (SM) weakened to around $1,250/tonne CFR China, down by more than 17% from the second half of April.

“Demand for EPS is weak despite the lower offers,” a Taiwanese producer said.

Buyers have mostly retreated to the sidelines, in anticipation of weaker prices in the near term.

Demand for Asian-made goods is weak with the eurozone still deep in a debt crisis and the US economy still in a fragile state. Consequently, consumption of EPS in Asia has declined.

China’s economic slowdown has also weakened domestic demand for the resins. EPS plants in the country have been running at an average rate of 55-60% as producers try to keep inventories at a manageable level.

EPS is made into styro-foam, which is used in packaging of food and electronics items, as well as in insulation panels used in buildings and roads.

Demand for the resin is expected to remain lacklustre in the near term despite the approach of the Chinese manufacturing season for exports in the third quarter.

“Demand in Asia is likely to stay weak amid the persistently uncertain global economic situation,” said another Taiwan-based EPS maker.

Major EPS makers include the Loyal Group, Ming Dih Group and Taita Chemicals of Taiwan as well as Wuxi Xingda Foam Plastics and Leasty Chemicals in China.

($1 = €0.80)

By: Clive Ong
+65 6780 4359

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