Asian PS suppliers raise offers on buoyant SM costs

By Clive Ong

SINGAPORE (ICIS)–Asia’s polystyrene (PS) suppliers have raised resin prices on the back of buoyant feedstock styrene monomer (SM) prices at above $1,600/tonne, said producers and traders.

The SM prices are on a CFR (cost & freight) basis.

“PS sellers have either kept offers unchanged or raised them a little this week,” said a trader in Hong Kong.

Offers were heard largely at $1,760-1,800/tonne CFR Asia, flat to $20/tonne higher from previous quotations.

However, demand on the whole remained lacklustre with some pick up expected only towards the middle of the year. With orders for finished goods coming in slower than expected, resins demand is not expected to pick up sharply in the near term.

“Our orders are still flowing in slowly, and consumption of PS will not improve much into the second quarter,” said an end-user in China.

Trade in Asia has also slowed this week amid increased volatility in the global markets. The escalating political tensions in Ukraine potentially developing in a war or resulting in damaging sanctions on trade weighed on sentiment. The Crimean referendum this weekend to secede from the Ukraine and return to Russia is expected to keep tension high in the near term.

“Sales have slowed down this week as markets are focused on Ukraine this week,” said a producer in southeast Asia.

PS is used in the manufacture of packaging, toys, consumer electronics and other consumer items.

Producers of expandable PS (EPS) have also raised prices by $20/tonne to around $1,800/tonne CFR Asia. Sellers concede that demand was still weak but feedstock costs have increased recently.

“We have to secure our margins as SM prices have risen to above $1,600/tonne CFR China,” said a producer in Taiwan.

The key construction sector in China is expected to enter a peak season in the middle of the year while the Chinese exports sector has not fared well this year.

“The exports sector is hampered by weak demand for Asia-made goods from the US and the Eurozone,” said another EPS maker in Taiwan.

EPS is made into styrofoam which is used for packaging as well as insulation panels in buildings and roads.