Price and market trends: Asia EPS may gain towards June on seasonal pick-up in demand

31 May 2013 09:40  [Source: ICB]

Demand for expandable polystyrene (EPS) in Asia is expected to pick up late in May and lead to higher prices of the polymer after stagnating at around $1,840/tonne (€1,435/tonne) since mid-March, market sources said on 22 May.

Offers were being quoted at $1,850/tonne CFR (cost and freight) NE (northeast) Asia, higher than ICIS' average assessment of $1,835/tonne CFR NE Asia in the previous two weeks.

Asia EPS

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

Spot SM prices were at $1,720-1,740/tonne CFR China on 22 May, 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.

CHINA PEAK SEASON

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) - starts 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.


By: Clive Ong
+65 6780 4359



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