FocusAsia polystyrene to hit fresh record highs on surging SM cost

09 January 2013 08:07  [Source: ICIS news]

By Clive Ong

disposable utensils are among the end-uses of polystyreneSINGAPORE (ICIS)--Spot polystyrene (PS) values in Asia look set to hit new all-time highs this week, driven by the strong prices of feedstock styrene monomer (SM), market sources said on Wednesday.

PS producers are hiking offers as they struggle to keep a healthy margin over SM, they said.

In the week ended 4 January, expandable PS (EPS) was assessed at a record high of $1,900/tonne (€1,444/tonne) CFR (cost and freight) NE (northeast) Asia, while general purpose PS (GPPS) stood at $1,850/tonne CFR China, according to ICIS.

The average price spread of PS over SM has narrowed to $50-100/tonne, with SM also trading at its highest level ever at $1,800/tonne CFR China in the same period, the data showed, amid tight spot availability of the monomer in the region.

Suppliers usually want GPPS prices to be $120/tonne higher than SM, while a workable spread between EPS and SM is pegged at $180/tonne, market sources said.

GPPS producers have raised their offers this week to above $1,900/tonne CFR China, while selling quotes for EPS were hiked to $1,960/tonne CFR NE Asia, traders said.

“SM costs are high and our margins are squeezed,” said a Taiwanese PS maker.

PS buyers, however, are posing a strong resistance to any price hike given difficulty in passing on to end-users the high resin costs, market sources said.

“Demand is likely to weaken as prices are in record territory,” said a Korean resin distributor in China.

Some users of PS were heard switching to other lower-priced resins.

“Some customers have switched from using PS to polypropylene (PP) for certain products and this trend could accelerate further if PS prices remain so high,” said a southeast Asia resin producer.

On 4 January, PP prices hovered at around $1,450/tonne CFR China, according to ICIS.

PS is used in packaging, disposable utensils, toys and cosumer electronics. EPS is made into styro-foam which is used in packaging as well as insulation panels in the construction industry.

($1 = €0.76)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections


By: Clive Ong
+65 6780 4359



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index