Asia styrenics markets still under pressure from weak demand

Focus article by Clive Ong

SINGAPORE (ICIS)–Styrenic resins prices in Asia remained under pressure this week amid continued weakness in regional demand, while sellers were offloading cargoes at lower prices, market sources said on Friday.

Suppliers and traders were reducing offers to entice buyers, as they intend to keep a lean inventory of styrenics by the end of the year.

“Buyers are hesitant to buy as they expect further declines,” said a resins producer in Taiwan.

ABS spot prices slipped below $1,100/tonne CFR (cost and freight) NE (northeast) Asia this week for certain brands, from the low- to mid-$1,100/tonne CFR NE Asia levels last week, according to ICIS data.

Polystyrene (PS) resins prices, meanwhile, remained below $1,100/tonne CFR China this week, with some trades heard to have concluded deals at close to $1,000/tonne CFR China levels, market sources said.

“Buying interest for imports is very weak in China as the production season for exports is over this year,” a Hong Kong-based trader said.

Slowing economic expansion in China and Asia continued to dampen demand for resins.

ABS resins are used to make toys, consumer electronics, appliances, and have applications in the construction and automotive sectors.

PS resins are used for packaging, and in the manufacture of toys, consumer electronics and other consumer items.

Demand may not improve before the Lunar New Year holidays in February next year, according to sellers.

Key feedstock styrene monomer (SM) prices slipped to around $900/tonne CFR China, down from the low- to mid-$900/tonne CFR China levels over the past several weeks.

The declining resins prices and weaker-than-expected orders for finished goods have prompted buyers to adopt a cautious stance.

“We are keeping low stocks and buying on a need-to basis,” said an ABS and PS end-user in China.

Prices of high impact PS (HIPS) are currently trading at near parity to ABS, prompting buyers to expect further reduction in PS values.

“At current HIPS prices, buyers will choose ABS. Hence, PS prices are under increased pressure,” a China-based PS producer said.