Asia PS makers hike offers by $30-40/t; buyers stay out of market

24 October 2012 08:50  [Source: ICIS news]

SINGAPORE (ICIS)--A number of PS producers have raised their offers by $30-40/tonne (€23-31/tonne) this week amid muted buying interest, market sources said on Wednesday.

Offers were quoted at $1,690-1,730/tonne CFR (cost and freight) China, but the decline in crude futures and styrene monomer (SM) values weighed on the PS market, they said.

Crude futures are currently trading below $88/bbl, while SM prices tumbled by about $50/tonne this week to $1,550/tonne CFR China as the market entered a lull season.

“The offers are higher but there is no business done,” said a trader in Hong Kong.

Manufacturing of finished goods in the key China market has slowed down as the exports season to US and Europe has ended in early October. Consequently, demand for resins and SM has waned.

With SM prices declining this week, traders expect PS buyers to reject the proposed higher prices. Most end-users are also contented to hold low resin inventories amid slower production.

Offers of high-impact PS (HIPS) were largely stable from last week’s at $1,850-1,900/tonne CFR China.

HIPS values might have reached an impasse temporarily as competing product acrylonitrile-butadiene-styrene (ABS) prices were at around $1,950/tonne CFR China. Usually, ABS prices lead HIPS by around $300/tonne but poor demand caused ABS prices to languish below $2,000/tonne CFR China.

ABS has higher impact strength than HIPS.

“The price of ABS has capped HIPS values as the spread is now so narrow that buyers of HIPS could essentially buy ABS instead,” said a trader in China.

PS is used in packaging, toys, consumer electronics and other consumer items.

($1 = €0.77)

By: Clive Ong
+65 6780 4359

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