20 February 2014 06:08 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS)--Spot expandable polystyrene (EPS) prices in Asia may stay under pressure in the near term, as sellers have been cutting offers to draw in buyers amid continued weakness in demand, market sources said on Thursday.
Offers of packaging resins were heard $1,780-1,800/tonne CFR (cost and freight) Asia this week, down by $10-20/tonne from last week, but buying momentum has remained lacklustre, they said.
“Most buyers are unhurried as they expect prices to fall more in the near term,” said a Taiwan-based EPS producer.
A rebound in prices of feedstock styrene monomer (SM) to $1,600/tonne CFR China levels this week, however, may provide some support to EPS values, market sources said.
Weak economic data coming out of China and the US suggests that demand for Asia-made goods will stay weak in the months ahead, consequently dampening consumption for packaging grade
EPS resins could remain in doldrums into the second quarter, they said.
Demand from the construction sector, on the other hand, is not expected to pick up until June, when the weather turns warmer.
EPS is made into styrofoam used for packaging of electronics and food, as well as insulation panels for roads and buildings.
Some end-users are currently relying on inventories to tide them over any immediate requirements, and are not keen on procuring fresh supply this week, market sources said.
“Customers still have sufficient inventories, and I only expect them to have interest to buy in one to two weeks’ time,” a Malaysia-based distributor said.
Buyers are holding back purchases as they expect EPS prices to weaken further, with some traders showing some flexibility in pricing during negotiations to make a sale.
“I am negotiating with my supplier for a $10 discount for my customer,” a Singapore-based trader said.
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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