28 March 2013 03:42 [Source: ICIS news]
By Ong Clive
SINGAPORE (ICIS)--Asia expandable polystyrene (EPS) offers rose by around $30/tonne (€23/tonne) this week amid buoyant feedstock styrene monomer (SM) values and expectations that buying interest might revive next month, producers and distributors said on Thursday.
“We have raised offers to reflect the rebound in SM prices this week but buyers appear hesitant,” a Taiwanese producer said.
EPS offers rose to $1,880/tonne CFR (cost & freight) NE (northeast) Asia this week from around $1,850 last week while feedstock SM prices rose above $1,700/tonne CFR China this week, from around $1,670/tonne CFR China for the week ended 22 March.
An outage at a Middle Eastern facility last week stoked fears that a tight availability of SM in Asia will worsen and sent buyers back into the market to look for parcels.
The temporary abatement of the Cyprus deposit levy crisis also lifted optimism to some degree, prompting Asia EPS suppliers to expect some demand to emerge in April.
“Some buying interest might emerge in April as buyers would need resins to meet higher production output,” said a resin distributor in southeast Asia.
However, EPS sellers remain cautious as a re-emergence of the debt crisis in Europe could once again cripple demand for Asia made products and curb demand for EPS.
EPS is made into styro-foam which is used for packaging.
“Some buyers continue to ask for previous week’s prices at around $1,840/tonne but we have to achieve higher prices to protect our margins,” said another EPS producer in Taiwan.
Suppliers of EPS maintained the premium of flame retardant resins at $70-80/tonne over packaging grades.
While some sellers are keen to increase the premium to $90-100/tonne, most believe that buyers are not ready to accept these prices yet.
The Chinese construction sector is expected to kick into higher gear in the second quarter as summer approaches that may lead to more demand for EPS, which is made into insulation panels and is also used in roads and buildings.
Consequently, the average operating rate of EPS plants in China have climbed steadily to 52% for the week ended 22 March, up from 34% a month ago.
Nonetheless, some EPS suppliers believe that the Chinese government’s continuous efforts to cool the property sector since 2011 will have a dampening effect on resins demand.
“The [China] government property curbs, if coupled with new problems in the Eurozone will affect sentiment and cause people to be cautious,” said an EPS maker in eastern China, who thought that demand for EPS from the property sector might be weaker than expected.
Consequently, exports of EPS out of China remained in place this year with Chinese resins finding their way to southeast Asia, Europe, Russia and the Middle East. Korean resins are usually exported to the US where there are no duties levied.
Major makers of EPS include the Loyal Group, Ming Dih Group and Taita Chemicals of Taiwan and Garson Chemicals, Wuxi Xingda and Leasty Chemicals of China.
($1 = €0.78)
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