Asia PS offers fall as feedstock SM prices tumble

Focus article by Clive Ong

SINGAPORE (ICIS)–Offers for polystyrene (PS) resins declined this week, tracking sharp falls in prices of feedstock styrene monomer (SM), market sources said on Wednesday.

Given current wide spread between PS and SM, some market players expect resins prices to continue falling in the near term.

Some PS suppliers have reduced their offers below $1,500/tonne CFR (cost and freight) China, down from low-$1,500/tonne CFR China levels last week, market sources said.

Feedstock SM have fallen to the low-$1,200/tonne CFR China levels for the week ended 14 November, down by $250/tonne from a month ago, according to ICIS data.

SM prices have been on a downtrend because of weak demand and market uncertainty.

A number of PS suppliers refrained from making offers last week amid volatility of SM prices. 

These sellers are still finding difficulty in quoting offers this week as buyers are expecting much lower resins prices.

“Demand in China is still soft despite lower offers as buyers think prices could go down further,” said supplier in Taiwan.

But PS producers need to take a measured approach in reducing offers, as they are saddled with high-cost SM inventory purchased previously, market sources said.

“I have reduced PS offers by $40/tonne despite the more than $100/tonne SM price fall last week as the prices of my SM in stock are high,” said a southeast Asian-based producer.

PS is used for packaging, toys, consumer electronics and other consumer items.

Suppliers of expandable PS (EPS) have also reduced offers this week.

“Most EPS makers have reduced offers by $50-60/tonne this week,” said a Singapore-based distributor.

Offers for packaging EPS were heard at $1,500-1,540/tonne FOB (free on board) NE (northeast) Asia.

Buying interest remained mostly weak, but some buyers picked up parcels as resin inventories have dwindled after several weeks of limited purchase.

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

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections