Asia EPS prices under downward pressure from weak demand

11 July 2012 08:58  [Source: ICIS news]

SINGAPORE (ICIS)--Asia expandable polystyrene (EPS) prices came under downward pressure after posting strong gains last week, as demand has stayed weak, market players said on Wednesday.

Buying interest has waned with current offers at around $1,600/tonne (€1,312/tonne) CFR (cost and freight) northeast (NE) Asia - the same as last week’s price quotes, market sources said.

“Buyers are no longer willing to consider prices at $1,600/tonne, with bids dropping to $1,550/tonne and below this week,” said a producer with plants in Taiwan and China.

Talk of lower offers from Chinese producers at $1,520-1,540/tonne FOB (free on board) circulated the market.

In the week ended 6 July, EPS were assessed at $1,570-1,600/tonne, up by an average of $85/tonne from the previous week, as prices of feedstock styrene monomer exceeded $1,400/tonne, according to ICIS.

Despite the lower offers for EPS, deals were limited this week as buyers preferred to stay on the sidelines.

“Our offer at $1,580/tonne CFR has met with little interest. There are limited enquiries this week,” said a Taiwanese producer.

In China, EPS producers have raised production rates to around 60% in the first half of July from around 55% in June as the third-quarter manufacturing season in the country kicked off.

“While buying interest should improve in the third quarter, overall demand for the year is likely to be poorer than last year due to the weak economic conditions in the US and China,” the Taiwanese producer said.

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

($1 = €0.82)

By: Clive Ong
+65 6780 4359

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