Asia PS buyers keep out of market despite reduced offers

Clive Ong

26-May-2016

Styrofoam styrene monomer SM polystyrene
SINGAPORE (ICIS)–Spot polystyrene (PS) prices may stay soft, with buyers keeping out of the market despite reduced offers from sellers, industry sources said on Thursday.

Prices continued to drift lower after slipping below $1,200/tonne CFR (cost and freight) China in mid-May, triggered by declines in cost of feedstock styrene monomer (SM), according to ICIS data.

Buyers have retreated to the sidelines and were delaying purchases, market sources said.

“Buyers are still hesitant to commit as they expect prices to decline further in the near term,” said a trader in China.

Lower offers failed to entice them back into the market as most buyers have sufficient stocks to tide them over immediate requirements, according to sellers.

“We cut offers by $30/tonne this week but buying interest did not [improve],” said a producer in southeast Asia.

PS resins are used for packaging, toys, utensils, consumer electronics and various consumer items.

Demand for expandable PS (EPS) was similarly lacklustre, with sales in Asia staying tepid.

Sellers expect buying momentum to remain weak in June, with some pick-up likely in the second half of the month.

“Some rebound in demand could emerge in the second half of June as buyers start to stock up some resins ahead of the third-quarter manufacturing-for-exports season,” said a Taiwan-based producer.

Buyers are expected to remain cautious in the near term with those having urgent requirements purchasing small volumes.

EPS resins are made into styrofoam, which is used for packaging and as insulation panels.

“Demand for resin are slow and buyers will need probably another two weeks to digest their current inventories,” said a trader in Singapore.

Focus article by Clive Ong

PS general purpose CFR China 26 May 2016
Picture: Polystyrene is used to make consumer goods such as disposable foamed cups (Source: REX/Shutterstock)

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