Asia styrenics resins retreat on tumbling SM, lacklustre demand

Clive Ong

27-Nov-2014

Focus article by Clive Ong

ABS resins are used to make toys, consumer electronics, appliances, and have applications in the construction and automotive sectors. PS, on the other hand, is used in packaging, consumer electronics and other consumer items. SINGAPORE (ICIS)–Styrenic resins prices in Asia fell this week, tracking declines in values of feedstock styrene monomer (SM), and may continue their downtrend because of tepid demand, market sources said on Thursday.

Polystyrene (PS) prices are being quoted in the low-$1,400 CFR (cost and freight) China levels this week, down from mid-$1,400/tonne CFR China levels last week, they said.

Spot prices of acrylonitrile-butadiene-styrene (ABS) resins, meanwhile, drifted lower to $1,700-1,750/tonne CFR China compared with $1,720-1,770/tonne last week, market sources said.

“Resins prices are under downward pressure as feedstock SM is weakening again,” said a PS producer in southeast Asia.

SM prices retreated below $1,250/tonne CFR China this week, after hitting nearly $1,300/tonne CFR China during the week ended 21 November, according to ICIS data.

Weak energy futures, with US crude slumping below $73/bbl weighed on SM values.

Demand for resins remained lacklustre as the year draws to a close, with buyers delaying their purchases on expectations that spot prices will slip further in the near term, market sources said.

“With energy and SM prices losing ground, resin demand is weak,” said an expandable PS (EPS) distributor in southeast Asia.

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

ABS resins are used to make toys, consumer electronics, appliances, and have applications in the construction and automotive sectors. PS, on the other hand, is used in packaging, consumer electronics and other consumer items.

Demand for resins is also being dampened by the continued economic slowdown in China – a key market in Asia.

Users of resins in the country reported fewer orders for finished goods this year compared with previous years.

“Our orders are lower, and hence, usage of resins are also weak,” said a Chinese moulder that uses ABS resins to make finished goods.

Buying interest has been dull, said another ABS buyer in southern China.

“Buyers are spacing out their purchases as they anticipate buying at cheaper prices each week,” he said.

Sellers, however, do not expect the slow purchases to last much longer as end-users mostly have low resin inventories after weeks of limited buying.

“Buying momentum should be quite brisk if market sentiment is to change suddenly,” said a Taiwanese resin producer.

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

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