Higher SM prices lift Asia EPS offers despite poor EPS demand

05 December 2012 09:10  [Source: ICIS news]

SINGAPORE (ICIS)—Strong performance in the Asia styrene monomer (SM) sector has prompted producers of expandable polystyrene (EPS) to increase their offers this week.

Producers in northeast Asia mostly quoted EPS prices at $1,810-1,820/tonne CFR NE Asia this week, up from $1,780-1,790/tonne CFR NE Asia last week.

“SM prices have gone up again, so we have to raise EPS prices to maintain workable margins”, said a Taiwanese producer.

SM prices rebounded to $1,650/tonne CFR China this week amid tight supply. Prices were up from around $1,580/tonne CFR China a month ago, according to ICIS data.

However, EPS sellers said that buying interest was weak for higher offers.

“Buyers were shocked by the price increase as the market is currently in a demand lull season”, said another Taiwanese producer.

Most end-users of EPS have completed their production requirements for the year and were not keen to stock up. Demand for EPS from the Chinese construction sector has also weakened as cold weather has set in.

In southeast Asia, EPS distributors quoted resins prices at $1,800/tonne CFR SE Asia last week but sold parcels at around $1,780/tonne CFR.

“The suppliers are targeting $1,820/tonne this week which will be difficult to achieve as demand is slow currently”, said a SE Asian distributor.

Producers continued to target a $80-90/tonne premium for the flame retardant (FR) resins over the normal EPS but buyers continued to resist these high prices.

“Since November, the premium of FR resins hovered at $60-70/tonne and buyers are unlikely to accept higher prices this month”, said another resin distributor in SE Asia.

EPS is made into styro-foam for packaging as well as insulation panels for buildings and roads.

($1 = £0.76)

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By: Clive Ong
+65 6780 4359

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