FocusWeak demand weighs on Asia styrenics prices, outlook weak

04 September 2012 07:49  [Source: ICIS news]

By Clive Ong

SINGAPORE (ICIS)--Asian styrenic resin prices are stagnating despite suppliers’ efforts to boost them amid persistently poor demand with outlook for the next few weeks remaining bearish, industry sources said on Tuesday.

Spot prices of polystyrene (PS) remained largely below $1,600/tonne (€1,264/tonne) CFR (cost & freight) China while acrylonitrile-butadiene-styrene (ABS) prices were below $2,000/tonne CFR NE (northeast) Asia on 4 September.

ABS prices have been at this level since mid-August and PS have remained at this level since early April this year, according to ICIS data.

A number of producers were targeting prices at above $1,600/tonne CFR China for PS and $2,000/tonne CFR NE Asia for ABS but their efforts had not success.

The producers have been targeting for the price hike from August as this is the middle of manufacturing peak season.

However, the initiatives were derailed as weak economic conditions in the US and the eurozone this year have curbed demand for Asian finished goods. Consequently, demand for styrenic resins has weakened.

“The appetite of end-users for resins remains weak and shows little sign of improvement,” said a trader based in Hong Kong.

The third-quarter manufacturing season for exports in China has entered its final stages with production activities usually winding down in October.

“So far, demand for PS and ABS has not improved despite the traditional peak demand season,” said a producer in Taiwan.

A number of traders and producers are of the opinion that styrenics demand is unlikely to pick up in September given the poor global economic backdrop.

“There is little hope of a significant rebound in plastics demand as we are approaching the tail end of the manufacturing season,” said a resins trader in China.

The average operating rate of PS and ABS plants in China hovered at 55-66% of capacity in August and September, which is a relatively low rate for the manufacturing peak season, compared with an average operating rate of 70-80% of capacity in previous years during the manufacturing peak season.

ABS is a hard plastic used in the manufacturing of toys, consumer electronics, appliances and office equipments.

PS is used for packaging, toys as well as appliances.

($1 = €0.79)

By: Clive Ong
+65 6780 4359

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