FocusAsia EPS may gain towards June on seasonal pick-up in demand

22 May 2013 07:37  [Source: ICIS news]

By Clive Ong

EPS is used as packaging material and has applications in insulation panels used in roads and buildings.SINGAPORE (ICIS)--Demand for expandable polystyrene (EPS) in Asia is expected to pick up late this month and lead to higher prices of the polymer after stagnating at around $1,840/tonne (€1,435/tonne) levels since mid-March, market sources said on Wednesday.

Offers are currently being quoted at $1,850/tonne CFR (cost and freight) NE (northeast) Asia this week, higher than ICIS’ average assessment of $1,835/tonne CFR NE Asia in the past two weeks.

Prices were largely unchanged over the past two months notwithstanding the sharp spike in the cost of feedstock styrene monomer (SM).

Spot SM prices are at $1,720-1,740/tonne CFR China this week, off the lows $1,635/tonne CFR China in the first half of March, according to ICIS data.

EPS suppliers were having difficulty implementing higher prices as demand has been general lacklustre.

But market conditions are expected to improve soon, as China heads into its typical peak season for construction, and manufacturing for exports.

“End-users of resins should start to buy in late May or June ahead of the third quarter manufacturing season,” said a Hong Kong-based resins trader.

Demand for packaging EPS should pick up when consumption of other resins, such as polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) start to improve.

“We have no concrete evidence of a pick-up in demand yet, but we are hopeful that buyers will step into the market in June,” said a PS producer in China.

Chinese EPS plants are currently operating at barely half their capacity, lower than their production levels in the second half of April, market sources said.

“There are some signs of a revival in demand in the northeastern China construction sector and hopefully that will pick up steam in the weeks ahead,” said an EPS distributor in Asia.

EPS is used as packaging material and has applications in insulation panels used in roads and buildings.

Major EPS producers in the region include Taiwan’s Loyal Group, Ming Dih Group and Taita Chemicals. In China, major EPS producers include Wuxi Xingda Chemicals, Garson Chemicals and Leasty Chemicals.

($1 = €0.78)

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

By: Clive Ong
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