27 September 2012 05:18 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS)--Spot expandable polystyrene (EPS) prices in Asia may ease down in the weeks ahead, with demand tapering off as manufacturing season for exports in the key China market is about to end, market sources said on Thursday.
But EPS may be supported by the strong prices of feedstock styrene monomer (SM) going forward, they said.
In the week ended 21 September, EPS prices were assessed at $1,720-1,740/tonne (€1,342-1,357/tonne) CFR (cost and freight) NE (northeast) Asia for the week ended 21 September – the highest this year – as SM spiked to a high of $1,625/tonne CFR China last week.
SM prices subsequently fell below $1,550/tonne CFR China early this week, but EPS suppliers have mostly held on to offers at $1,730-1,750/tonne CFR NE Asia.
“The recent increases in resin prices are due to cost push. Demand will likely ease in late October as it is a lull season for EPS,” said a Chinese producer.
Rising SM prices, however, should be able to lift up EPS in the last three months of the year, market sources said.
“While EPS demand could ease in the fourth quarter, SM prices might provide support, as SM supply is tight in the region,” said another resin producer in ?xml:namespace>
Shore tank inventories of SM along east
“Usually producers would like a spread of around $180/tonne between SM and EPS prices,” said a Taiwanese producer.
The spread is currently at $170/tonne, with SM prices at $1,560/tonne.
Demand for EPS usually dwindles in the second half of October, and this could depress prices in the week ahead.
EPS is made into styrofoam which is used for packaging, as well as insulation panels in roads and buildings.
The fourth quarter is a slow period for EPS, as manufacturing of finished goods for exports would have mostly ended, leading to weaker demand for packaging.
From the building and infrastructure sector, demand for EPS is also expected to soften as construction activities in
($1 = €0.78)
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