Spot prices of May and June parcels rose more than $10/tonne from early week to $1,660/tonne CFR (cost & freight) China and $1,670/tonne CFR China respectively, according to ICIS data.
Domestic prices in eastern China also gained ground to above yuan (CNY) 18,000/tonne ex-tank from CNY11,700/tonne ex-tank on 4 April.
“The continuous gains in domestic Chinese prices are narrowing the price difference between domestic and import parcels. This has a positive effect on import prices,” said a Korean broker.
Domestic prices fell below CNY11,000/tonne ex-tank in the middle of February, causing the price difference between domestic and import parcels to widen to more than $100/tonne. In March, domestic prices started to recover and the price difference between local and imported material has shrunk to less than $50/tonne in April.
However, in the second half of the week ended 11 April, the price uptrend fizzled out. Selling activities were seen on the increase when prices trended higher earlier in the week.
“More sellers have emerged on Thursday after prices rose yesterday [Wednesday],” said a Korean broker.
Consequently, prices slipped by some $10/tonne as buyers retreated to the sidelines.
HIGH CHINA INVENTORIES
Relative high inventories along the eastern China shore tanks also weighed on sentiment.
Estimates the week ended 11 April pegged total volumes at 282,000 tonnes with spot portion at 168,600 tonnes, compared to 292,500 tonnes and 175,800 tonnes the prior week. “While inventories are slowing coming down, they are still at a relatively high level,” said a Korean trader.
The slow recovery in the downstream styrenic resins sector post Lunar New Year has resulted in a gradual reduction in SM stocks.
“Demand from the styrenics sector has picked up marginally in March and April, which was insufficient to sharply reduce the SM inventories stock in the near term,” said a Taiwanese resins maker.
Market players expect prices to remain in the $1,600-1,650/tonne CFR China trading range in the near term as recent upward pushes have not been successful. The offtakes from the downstream sector remained tepid despite some slight pick up.