SINGAPORE (ICIS)--Asia’s polystyrene (PS) market is poised to stay buoyant in the near term on snug supply and healthy downstream demand.Chinese workers use expanded Polystyrene (EPS) foam to build houses. (Imagine China/REX/Shutterstock)
In the week ended 14 December, spot prices of general purpose PS (GPPS) gained $10/tonne from the previous week to $1,260/tonne CFR (cost & freight) China/Hong Kong, according to ICIS data.
Prices have been on an uptrend since hitting a 16-month low of $1,215/tonne CFR China/Hong Kong on 30 November, the data showed.
High-impact PS (HIPS) prices were assessed on 14 December at $1,335/tonne CFR China/Hong Kong, up $10/tonne at the low end of the previous week’s price range.
For the key China market, imports present a cheaper alternative as they are priced lower by about $104.25/tonne compared with domestic cargoes.
“Supply in China of PS is limited during the month of December as some Chinese producers cut run rates earlier,” a Chinese distributor said.
The average operating rates of Chinese producers were at around 73% in early December, ICIS data showed.
In addition, the prolonged shutdown of Shanghai SECCO’s 300,000 tonne/year of PS plant had curtailed overall spot availability in the domestic market. Its restart was delayed to 9 December and is currently operating at around 50% of capacity, market sources said.
The company’s plants in Shanghai were shut in early October for a planned maintenance, and were originally due to restart in late November.
Delays in arrivals of Iranian-origin PS cargo with an estimated volume of 2,000 tonnes, also supported buying interest. The cargo was expected to arrive at Chinese shores in end-November/early December. It cannot be immediately determined if the cargo has reached China.
Downstream demand from Chinese buyers is firm as they are replenishing inventory.
“The Chinese are back to purchase as they feel prices have stabilized and they are keen to stockpile inventory now,” a regional producer said.
PS prices are still around $200/tonne above polypropylene (PP) prices, ICIS data showed. This makes PP an unlikely substitute for PS and supporting PS demand.
Focus and Interactive by Yaw Min Jie