By Clive Ong
SINGAPORE (ICIS)--Spot prices of polystyrene (PS) and expanded PS (EPS) in Asia are under severe pressure to track the recent slump in upstream styrene monomer (SM) market, as buyers are holding off purchases, industry sources said on Friday.
Sellers of the styrenics resins attempted to draw in buyers by cutting offers by $20-30/tonne this week, they said.
PS offers stood were in the low-$1,800/tonne CFR (cost and freight) China levels, with sporadic deals concluded below $1,800/tonne CFR China, while EPS was being quoted at around $1,800-1,820/tonne CFR Asia, they said.
On 7 February, PS was assessed at $1,790-1,820/tonne CFR China, while EPS stood at $1,830-1,840/tonne CFR NE (northeast) Asia, according to ICIS data.
“Buyers [of PS and EPS] were expected to replenish some resins, but with the volatility in the SM market, most have become hesitant,” a southeast Asia-based PS producer.
PS is used for packaging, toys, consumer electronics and other consumer items, while EPS is made into styrofoam, which is used for packaging, as well as insulation panels in roads and buildings.
“Buyers are waiting for lower resin prices since SM appear to be still falling,” a Taiwan-based EPS producer said.
Prices of feedstock SM have declined below $1,600/tonne this week to levels last seen in November 2012, ICIS data showed, amid a strong build-up in inventories in China during the Lunar New Year holidays.
Industry players in China have started to stream back into the market this week after a week-long holiday from 31 January to 6 February, but the expected pick-up in demand failed to materialise.
A severe cold weather in northern China is seen to reduce demand for EPS from the construction sector, market sources said, while operations at EPS factories in this region is expected to be impeded.
Weak economic data coming out of China and the US – the world’s biggest economies – are fuelling concerns that the nascent global economic recovery could fizzle out, and weigh on the Asian exports sector.
PS and EPS demand could remain weak into the second quarter, with orders for Asian-made finished goods not improving, some market players said.
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