Asia polystyrene continues uptrend on buoyant SM market

12 July 2012 04:45  [Source: ICIS news]

SINGAPORE (ICIS)--Polystyrene (PS) prices in Asia extended gains this week, riding on the buoyant market of feedstock styrene monomer (SM), producers and traders said on Thursday.

PS sellers pushed prices towards the $1,550/tonne (€1,271/tonne) CFR (cost and freight) China level this week, from the high-$1,400/tonne CFR China levels last week. SM, on the other hand, is currently trading in the high-$1,300/tonne levels.

Spot PS prices have been rising since mid-June, when a low of $1,405/tonne CFR China was hit, according to ICIS.

Deals were concluded in the low-to-mid $1,500/tonne CFR China levels this week, as some buyers picked up parcels to replenish inventories, while others accumulated some resins on fears that prices might go up further in the near term.

Demand for PS is expected to improve further as the third-quarter manufacturing season for exports in Asia kicked in. However, a number of PS makers concede that overall demand will likely be weaker than last year, given the weak economic conditions in the US, Europe and China.

“PS prices have continued to increase this week as more buyers emerge from the sidelines,” said a Hong Kong-based trader.

In China, operating rates of PS plants increased to 70% in July from around 60% in June, as producers build up stocks in anticipation of higher demand in the coming weeks.

“Traditionally, the third quarter is a strong season for resins, so most makers are building some inventories to capture the expected increase in consumption,” said a Taiwanese producer.

While the PS price uptrend remains intact this week, some sellers expressed caution, given recent volatility in world markets and energy futures.

“We are in turbulent times and a sharp fall in crude futures would derail the PS price uptrend. Fundamentally, demand for PS has only improved marginally,” said another Taiwanese resin producer.

PS is used to for packaging, toys, disposable utensils and consumer electronics.

($1 = €0.82)

By: Clive Ong
+65 6780 4359

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