Asia SAN trades pick up on pre-Lunar New Year holiday re-stocking

Source: ICIS News

2019/01/16

SINGAPORE (ICIS)--Asia’s styrene-acrylonitrile (SAN) trades have picked up ahead of the Lunar New Year holidays in early February, with buyers keen on stocking up on resins as prices may have bottomed out.

SAN resins are used in disposable cigarette lighters. (Photo by Jochen Tack/imageBROKER/REX/Shutterstock)

Offers this week stood at $1,450-1,600/tonne CFR (cost & freight) China.

The market started to reverse its losing streak this year after falling to the low-$1,300/tonne CFR China levels in December 2018 from $1,850/tonne CFR China in June, according to ICIS data.

ICIS Editorial Chart goes here

Some suppliers were surprised by the quick rebound, as they initially thought the market would stay soft ahead of the Lunar New Year.

The Lunar New Year, which will be on 5 February 2019, is celebrated on most parts of southeast and northeast Asia. China will be on holiday for a full week from 4-10 February.

“Buying interest was strong since last week as buyers decided to stock up,” a Taiwan-based producer said.

Users were mostly stocking up for post-holiday requirements, as the recent US-China trade talks in Beijing has generated some optimism in the market.

“Sentiment is a little better with expectations of some improvement to the trade tension,” said a trader in Hong Kong.

SAN resins are used in fan blades, disposable cigarette lighters, toothbrush holders, fridge trays and a host of other consumer items.

Some participants also attributed the rapid price increase in SAN to its relationship with polystyrene (PS). Some substitution with PS can happen for certain applications if SAN prices move close to PS.

PS is lower than SAN, and their price spread had stayed at around $250-300/tonne for the most of 2018, but this narrowed to $65/tonne in December, ICIS data showed.

“Some buyers view SAN as a bargain since its spread against PS is so narrow recently,” said a northeast Asian producer.

Focus article by Clive Ong

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