13 March 2013 04:40 [Source: ICIS news]
SINGAPORE (ICIS)--Asian producers of expandable polystyrene (EPS) cut their offers this week by about $20/tonne (€15/tonne) in a bid to boost buying interest, market sources said on Wednesday.
Market quotes for packaging resins were heard at $1,840-1,860/tonne CFR (cost and freight) Asia. While some deals were concluded at these levels, demand on the whole stayed weak, they said.
“Some deals were concluded at $1,850-1,860/tonne CFR NE (northeast) Asia but a number of buyers are still holding back,” said a Taiwanese producer.
EPS prices are being dragged down by last week’s decline in values of feedstock styrene monomer (SM) below $1,650/tonne CFR China, market sources said.
While EPS producers have reduced their offers, most were not keen on a sharp cuts as the resins available were manufactured using SM procured at higher prices in the previous month.
“The current EPS resin is made from February’s SM, which was above $1,700/tonne,” said another EPS maker in Taiwan.
Demand for EPS has remained lacklustre post the week-long Lunar New Year holidays on 9-15 February.
Weak economic outlook in the US and the eurozone further fuelled concerns that demand for Asia-made goods will remain lacklustre for the first half of the year, thereby dampening consumption of EPS resins for packaging.
EPS is made into styrofoam used for packaging, as well as insulation panels in buildings and roads.
“While some deals are concluded at around $1,850/tonne, some suppliers have quoted lower prices at $1,840/tonne CFR in order to move cargoes,” said a southeast Asian distributor.
As EPS resins have short shelf life of about six months that suppliers often have to manage plant operating rate and inventories judiciously. The pressure to move parcels also increases when demand tapers off, industry sources said.
Major producers include the Loyal Group, Ming Dih Group and Taita Chemical of Taiwan and Wuxi Xingda, Leasty Chemical and Garson Chemical in China.
($1 = €0.77)
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