24 April 2013 09:50 [Source: ICIS news]
Suppliers kept their offers for packaging EPS unchanged at around $1,840/tonne (€1,417/tonne) CFR (cost & freight) NE (northeast) Asia despite lower prices for PS and ABS this week.
However, demand has tapered off as buyers expect prices to drop in line with other styrenic resins.
“We finalised some deals near or at our offer prices but volume has been reduced as buyers expected lower prices,” said a producer in Taiwan.
Buyers usually compare prices of EPS with general purpose PS (GPPS). With GPPS now trading lower in the mid $1,700s/tonne CFR China, buyers of EPS naturally expected softer EPS values in the near term.
Most EPS makers, however, continued to hold on to their offers in a bid to maintain proper margins. Feedstock styrene monomer (SM) prices have been relatively firm in the high $1,600s/tonne CFR China this week.
“SM prices are quite strong and we hope not to follow PS prices lower,” said a Chinese EPS producer.
Demand for packaging resins has been dented by a slowdown in the Chinese export sector of finished goods. Economic headwinds in the US and the eurozone have dampened demand for Asia-made goods.
However, demand for EPS in China is expected to gradually strengthen in the near term as the Chinese construction sector will enter its peak towards mid-year.
EPS is used for packaging as well as insulation panels in buildings and roads.
Distributors of the resins expect prices to ease in the near term if other resin prices remained on the downtrend.
“If prices of PS and ABS continue to decline, EPS prices will be under downward pressure soon enough,” said a distributor in southeast Asia.
Distributors welcomed a decrease in prices as EPS prices reached a record high of above $1,900/tonne CFR NE Asia in February this year and remained near this elevated level ever since.
“A price reduction is good for demand as EPS is more than $400/tonne higher than other packaging plastics like polyethylene (PE),” said another distributor in southeast Asia.
($1 = €0.77)
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