Asia EPS offers rise $30/tonne on SM gains; demand stays soft

05 September 2012 09:28  [Source: ICIS news]

SINGAPORE (ICIS)--Offers for expandable polystyrene (EPS) resins in Asia rose by some $30/tonne (€24/tonne) this week, supported by firm prices of feedstock styrene monomer (SM), market sources said on Wednesday.

EPS producers are quoting around $1,650/tonne CFR (cost and freight) China, as SM prices are currently in the high-$1,400/tonne levels and have been on an uptrend since the first half of June, they said.

The higher EPS offers, however, are being met with strong buyers’ resistance, market sources said.

“Buying indications were cited at $1,600/tonne FOB, while we managed to secure some deals at $1,620-1,630/tonne after much negotiations,” said a Taiwanese producer.

Weak economic conditions in the US and the eurozone continue to curb demand for Asian finished goods, weighing on demand for EPS.

EPS is used to make styro-foam which is used for packaging, as well as insulation panels in buildings and road.

China’s slowing economy also leads to a significant reduction in demand for EPS used in the construction and infrastructure sectors.

“We are constantly trying to raise prices as our margins are squeezed, but demand is persistently weak,” said another Taiwanese producer.

Buyers are resisting higher offers as EPS prices are nearing this year’s high of $1,685/tonne CFR China, which was hit in March.

“Demand is still soft in September and the higher prices are cutting into our margins,” said an end-user in southeast Asia.

 ($1 = €0.80)

By: Clive Ong
+65 6780 4359

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