22 November 2013 05:36 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS)--Offers for expandable polystyrene (EPS) in Asia increased by $10-20/tonne (€8-16/tonne) this week, following a recent price rebound of feedstock styrene monomer (SM), but weak demand continues to weigh on the market, industry sources said on Friday.
EPS cargoes are being quoted at $1,820-1,830/tonne CFR (cost and freight) NE (northeast) Asia, they said.
On 15 November, feedstock SM was assessed at above $1,650/tonne CFR China, up by $25-30/tonne, according to ICIS data.
“Offers [for EPS] at $1,830/tonne CFR Hong Kong could not draw much buying interest,” a Taiwanese supplier said.
The EPS market has entered a lull season, with demand from the major downstream construction sector tapering off since October with the onset of winter in the key China market, industry sources said.
EPS is made into styrofoam, which is used for packaging, as well as insulation panels in buildings and roads.
Suppliers expect the weak market condition to prevail into the first quarter of next year.
“Consumption from the Chinese construction sector will stay low until the second quarter arrives,” said another Taiwanese producer.
Meanwhile, demand for packaging EPS has also weakened since last month as the third-quarter manufacturing season for exports ended. Consequently, Chinese EPS facilities are running at 45% of capacity this week, industry sources said.
“Most plants are operating a low rates as suppliers are trying to prevent inventories from building up too much,” said a distributor in southeast Asia.
Demand for EPS in southeast Asia is similarly lacklustre. End-users still have some inventories to tide them over current requirement, dampening any impetus to pick up additional lots this week, market sources said.
“Some buyers are reducing purchase size as they expect prices to decline further in the near term,” said another southeast Asia distributor.
With EPS makers hiking prices this week, buyers retreated to the sidelines.
Major EPS producers in Asia include the Loyal Group, the Ming Dih Group, Wuxi Xingda, Garson Chemicals and Taita Chemicals.
($1 = €0.75)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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