12 April 2013 04:46 [Source: ICIS news]
SINGAPORE (ICIS)--Spot polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) prices in Asia are being propped up by firm values of feedstock styrene monomer (SM), notwithstanding weak demand, market sources said on Friday.
Since mid-March, ABS continues to trade at around $1,900/tonne (€1,444/tonne) CFR (cost & freight) NE (northeast) Asia, while PS remained in the low-$1,800/tonne CFR China levels, with fedstock SM prices firm in the high-$1,600/tonne CFR China levels, according to ICIS.
“High SM prices have kept resin prices from falling further these few weeks,” said a producer in Taiwan.
While resins prices were steady in recent weeks, sellers expect limited improvement in demand in the near term, given the weak economic outlook in the US and the eurozone.
“Demand for resins will still be weak as export of finished goods remained in the doldrums,” said a Hong Kong-based resins trader.
End-users remain cautious and are keeping low inventories of resins. Most expect minimal demand recovery in the second quarter, judging from the amount of orders for finished goods.
Traders are similarly cautious, sticking mostly to back-to-back business.
"Demand is weak and end-users have low buying ideas, hence back-to-back business is a safer strategy,” said a trader in southeast Asia.
Meanwhile, tight availability of SM in Asia is expected to continue supporting prices, amid a plant outage in the Middle East, and plant turnarounds in China and South Korea.
"With SM prices keeping at a relatively high level, resins prices will continue to find support,” said a PS producer in southeast Asia.
But producers are worrying over the continued weakness in demand.
"While resins prices stable, we still need demand to improve for the business to be viable,” said a source at a Korean ABS producer, which reduced its plant run rate to around 50% of capacity in April.
PS is used in packaging, toys, utensils and other consumables while ABS is used in appliances, consumer electronics, toys as well as the automotive sectors.
($1 = €0.76)
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