Asian styrenic prices stagnant amid poor demand

22 August 2012 05:52  [Source: ICIS news]

SINGAPORE (ICIS)--Prices of polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) were stagnant this week despite suppliers’ efforts to raise them, said traders on Wednesday.

Firm energy futures and relatively strong performance in the feedstock styrene monomer (SM) sector prompted PS and ABS makers to target higher prices. Energy futures and SM prices were at around $97/bbl (€78/bbl) and $1,450/tonne CFR (cost & freight) China this week.

However, poor offtake rate of buyers in recent weeks had derailed suppliers’ price hike initiatives. In fact, traders who were liquidating stocks in view of poor demand caused prices to ease in the ABS market.

ABS prices reached $2,000/tonne CFR northeast Asia in the second half of July but have since declined. Meanwhile, PS prices hovered at the mid-to-high $1,500s/tonne CFR China, with efforts by sellers to push prices to $1,600/tonne CFR China meeting limited success.

“The demand for resins is weak even though it is currently the manufacturing season,” said a trader in Hong Kong.

Factories in China usually ramp up production of finished goods for exports in the third quarter and consume more resins in the process. However, the weak economic conditions in the US and the eurozone have dampened demand for Asia-made goods this year.  

“Factories have fewer orders this year and coupled with the slowing economic growth in China, consumption of PS and ABS has really declined,” said another trader in Hong Kong.

The average operating rate of PS and ABS facilities hovered at 55-65% capacity in August, which is relatively low given the current manufacturing peak.

A number of suppliers expressed little optimism for any significant improvement as the global economic conditions continued to weaken.

“There are little signs of improvement in demand. Given the current economic backdrop, it is not surprising,” said a Taiwanese resins producer.

ABS is used in the manufacturing of consumer electronics, appliances, office equipment as well as in the automotive and construction sectors. PS is used in the packaging, toys and appliance sectors.

($1 = €0.80)

By: Clive Ong
+65 6780 4359

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