06 February 2014 03:50 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS)--Suppliers of expandable polystyrene (EPS) in Asia have lowered their offers this week by $10/tonne, taking into account recent weakness in the upstream styrene monomer (SM) market, industry sources said on Thursday.
EPS resins are being offered this week at around $1,850/tonne CFR (cost and freight) Asia, they said, adding that price pressures may continue amid a lull in demand.
Feedstock SM prices have stayed below $1,700/tonne CFR China since 10 January, according to ICIS data.
“We reduced [EPS] offers by a little this week as SM prices remained weak,” said an EPS producer in Taiwan.
Overall demand has not picked up, with players in China still away on holiday. Chinese markets are closed on 31 January-6 February for the Lunar New Year celebration.
Buying interest may emerge next week, when trading resumes in the key Chinese market, according to EPS suppliers.
“Some buyers could be looking at the market from next week, although overall buying momentum could still be quite slow,” said another supplier from Taiwan.
EPS is made into styro-foam – which is used for packaging electronic products, as well as food, and is also used as insulation panels in buildings and roads.
China’s exports are expected to remain slow until the third quarter, when production typically peaks. From the construction sector, activities are only due to improve mid-year – during the summer months.
While there are expectations that EPS demand will improve next week, market players are ruling out any significant increase.
“Some demand could emerge, but given the weak global economy, demand in SE Asia could stay tepid into the second quarter,” said a Malaysia-based distributor.
Meanwhile, buyers are also cautious as they expect softer resin prices in the near term on the back of weak SM values.
“Customers think that prices could slip further and are delaying some purchases," said a Singapore-based trader.Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections