SINGAPORE (ICIS)--Asia suppliers of expandable polystyrene (EPS) are targeting higher prices amid recent strength in feedstock styrene monomer (SM) values though buyers response is slightly muted so far.
Spot SM prices have hovered at above $1,400/tonne CFR (cost & freight) China since last week, ICIS data showed.
SM prices rose from under $1,300/tonne CFR China in the second half of March to above $1,400/tonne CFR China in early May.
EPS offers were raised by around $20/tonne to around $1,580/tonne CFR NE Asia this week but demand was lacklustre.
“We are trying to increase prices to maintain workable margins, but buying interest is soft,” said a producer in Taiwan.
EPS resins are used for packaging and insulation panels in buildings and roads.
Demand for EPS is expected to improve towards the middle of the year as the key Chinese construction sector enters its peak, but so far the pick-up in consumption was insignificant.
Demand of EPS from the packaging sector is expected to improve as well in the middle of the year as buyers should replenish stocks ahead of the third quarter manufacturing for exports season in China.
“Offers at $1,580-1,590/tonne CFR NE Asia could not draw buyers forward,” said another producer in Taiwan.
Offers in Southeast Asia rose to $1,620-1,630/tonne CFR this week but dealers reported weak buying impetus, as buyers lobbied for material at under $1,600/tonne CFR SE Asia.
“I have not sold any cargoes over the past 2 weeks,” said a dealer in Singapore.
End-users in the region has picked up some parcels in recent weeks and have delayed commitments this week in view of higher offers.
“Buying momentum in SE Asia is weak as users still have some inventories,” said a distributer in Malaysia.
SE Asia prices are typically around $30-50/tonne higher than NE Asia, given that China, Taiwan and South Korea are source countries selling EPS resins into SE Asia. The prices consist of mostly higher freight costs from NE Asia to SE Asia.
(Top image: Imaginechina/REX/Shutterstock)
Focus article by Clive Ong