22 August 2013 09:31 [Source: ICIS news]
SINGAPORE (ICIS)--Polystyrene (PS) suppliers selling into southeast Asia have reduced their offers by about $50/tonne (€38/tonne) following a pull-back prices of feedstock styrene monomer (SM) this week, market sources said on Thursday.
Offers are being quoted at below $1,950/tonne CFR (cost and freight) SE (southeast) Asia this week, they said.
Buyers, on the other hand, are expecting a steeper reduction in PS prices, as SM costs fell below $1,750/tonne, they said.
“The current lower [PS] offer is finding only limited buying interest as some buyers decided to wait for even lower prices,” a southeast Asia-based trader said.
PS trades this week were heard in the low-$1,900/tonne CFR SE Asia levels, but sellers were not keen to further drop prices as resins were made from high priced SM.
“Suppliers have dropped prices from $2,000/tonne to below $1,950/tonne CFR, but further cuts will probably eat into their margins,” said a producer in southeast Asia.
Demand overall stayed weak although a number of end-users were deemed to have low stock. Orders for finished goods were said to be lower than expected, and users were not keen to keep high inventories.
“There is still limited response from resin buyers this week as most remained cautious on uncertain global economy,” said a resins trader in Singapore.
The release of the US Fed minutes overnight failed to reassure the markets given its lack of clear decision whether the tapering of its stimulus programme will occur in September. Strong estimates on China’s Purchasing Managers’ Index (PMI) by HSBC on Thursday also failed to boost the market.
Other sellers blamed the rapid decline in SM prices for the lack of interest in PS, as buyers prefer to wait for feedstock prices to stabilise before making commitments.
“The successive SM price declines for the first three days this week spooked the PS buyers who now mostly decided to delay purchases,” said another PS producer in southeast Asia.
Prices of high impact (HIPS) resins also retreated to the mid-$1,900/tonne CFR SE Asia levels this week, from around $2,020-2,040/tonne CFR SE Asia in the first half of August.
While prices of butadiene (BD) have improved to around $1,200/tonne CFR NE (northeast) Asia from below $900/tonne CFR NE Asia in July, HIPS makers continued to price resins at a modest premium of $20-30/tonne over normal PS.
“Demand for HIPS is weak as prices of acrylonitrile-butadiene-styrene (ABS) are at a parity,” said a trader in southeast Asia.
PS is a resin used for packaging, toys, consumer item and consumer electronics.
($1 = €0.75)
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