Corrected: High Asia EPS prices deter buyers; sellers bring down offers
ICIS News : 1-Aug-13 06:58
Correction: In the ICIS news story headlined "High Asia EPS prices deter buyers; sellers bring down offers" dated 1 August 2013, please read in the ninth paragraph ... "record levels above $2,000/tonne" ... instead of ... "record levels above $2,00/tonne" .... A corrected story follows.
By Clive Ong
SINGAPORE (ICIS)--Spot offers for expandable polystyrene (EPS) resins in Asia have fallen this week as buyers are posing a stiff resistance to continued price spike amid weak demand, industry sources said on Thursday.
EPS quotes are now at $1,960/tonne (€1,470/tonne) CFR (cost and freight) NE (northeast) Asia, pulling back from record levels of more than $2,000/tonne the previous week as sellers attempt to stoke buying interest, market sources said.
Firm EPS prices have started to deter demand, with some buyers substituting EPS with other cheaper resins used for packaging such as polyethylene (PE) and polypropylene (PP), market sources said.
PE and PP are currently priced $400-500/tonne lower than EPS, they said.
A slowing down in Chinese exports given continued weakness in the US and eurozone markets, has curbed demand for EPS. Within China, credit restraints are dampening activities in the construction sector, aggravating the weakness in EPS demand.
EPS is made into styro-foam and is used for packaging. The flame-retardant grades are usually made into insulation panels that are used in roads and buildings.
“Buying momentum for EPS has slowed markedly with prices at above $1,900/tonne,” said a southeast Asia-based distributor.
The ongoing Muslim fasting month of Ramadan, which is observed in most parts of southeast Asia, has also slowed down trades that is expected to persist this month.
EPS prices have gone up to record levels above $2,000/tonne on the back of soaring cost of feedstock styrene monomer (SM), industry sources said.
Spot SM prices are trading in the low- to mid-$1,800/tonne CFR China levels this week.
“Several makers have offered at above $2,000/tonne CFR NE Asia but actual business have not reached that level yet,” said a Taiwanese producer.
In the week ended 26 July, trades were done in the low-$1,900/tonne CFR NE Asia levels, while sellers appeared determined to achieve prices at above $1,950/tonne CFR NE Asia.
“Buyers are resistant to prices at above $2,000/tonne CFR NE Asia,” said a source at a China-based producer.
Feedstock SM prices have recently hovered at above $1,800/tonne CFR China, prompting EPS makers to raise prices to maintain a workable margin.
($1 = €0.75)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
By Clive Ong
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