Asia styrenic resin prices steady on SM rebound, demand up

Clive Ong

08-May-2014

Focus story by Clive Ong

ABS is a resin with applications in toys, electronics, appliances, as well as in the automotive and construction sectorsSINGAPORE (ICIS)–Asia styrenic prices held steady this week as a result of a rebound in upstream styrene monomer (SM) and an expected growth in demand as third quarter export season approaches, market sources said on Thursday.

Prices of polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) resins came under downward pressure last week when SM prices fell to $1,580/tonne CFR (cost & freight) China on 30 April.

However, a rebound in prices took place after the May Day holidays to above $1,600/tonne CFR China that helped resins sellers to avert implementing a sharp discount to prices this week.

“We are mostly holding on to offers for PS and ABS since SM has recovered,” said a Taiwan-based resins producer.

Sellers generally expect resins demand to firm in the weeks ahead as the third quarter Chinese manufacturing for exports season draws near.

Some end-users of resins reported an increase in orders for finished goods and added that they could be sourcing for more resins in the near term.

“We are starting to see a stronger inflow of orders for the third quarter over the past two weeks,” said an ABS and PS user in China.

Some traders echoed a similar sentiment as they expect end-users to start replenishing stocks to prepare for a higher production season.

“Buyers should be picking up more resins in late May as the third quarter production season is approaching,” said a trader in Hong Kong.

ABS is a resin used in the manufacture of appliances, consumer electronics, toys as well as in the construction and automotive sectors. PS is used in packaging, toys, consumer electronics and other consumer items.

Suppliers of expandable PS (EPS) reduced offers by some $30/tonne last week amid a plunge in the SM prices.

This week, however, most suppliers kept offers steady in the high $1,700s/tonne CFR Asia level.

“Two suppliers have quoted at last week’s level of $1,780-1,785/tonne CFR this week,” said an EPS distributor in southeast Asia.

While offers have stayed the same, EPS demand in southeast Asia appeared to have tapered off, with sellers reporting slow off-takes at current offers. Some sellers believed that buyers have become cautious after the recent volatility in SM prices.

EPS resins are used to manufacture styro-foam, which is used in packaging as well as insulation panels in buildings and roads.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

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