Asia PS market upbeat despite volatile SM amid healthy demand

SINGAPORE (ICIS)–Asia’s polystyrene (PS) market sentiment is upbeat in the near term despite volatility in feedstock prices, as demand stays buoyant while supply is tight.

Aerial view of container terminal in Hong Kong.(Photo by Miguel Candela/Sopa Images/REX/Shutterstock)

In the week ended 4 January, spot prices of general purpose PS (GPPS) were assessed at $1,230-1,240/tonne CFR (cost & freight) China/Hong Kong, down by $10/tonne from the previous week, ICIS data showed.

In contrast, feedstock styrene monomer (SM) prices fell by $10-45/tonne over the same period to $970-1,005/tonne CFR China/Hong Kong, according to the data.

“Demand for polystyrene especially for the GPPS grade is extremely healthy right now as end-users are ramping up production ahead of March,” a Chinese trader said.

Chinese end-users were especially keen to replenish inventory due to increased production of downstream finished goods such as consumer electronics.

Chinese sellers of such products are aiming to get their finished goods into the US before the 90-day trade truce between the US and China ends on 1 March.

“GPPS is a key material in the making of diffusers in television sets and thus Chinese end-users are snapping up material just in case there are unfavorable plot twists in the trade war,” a Taiwanese producer said.

Supply in Asia also is also likely to be tighter in the first quarter due to turnarounds.

Taiwanese producer Taita will shut its 100,000 tonne/year PS plant for a week from 4-11 February while Vietnam Polystyrene will shut its 50,000 tonne/year plant from 1-10 February.

Supply in China is also tight as Shanghai SECCO’s 300,000 tonne/year is operating at a reduced rate of around 65% after a shutdown from early October to 9 December 2018, according to market participants. The plant is one of the biggest suppliers to the Chinese spot PS market.

“Demand at present is too good for supply from the domestic Chinese market to keep up and thus import buying is extremely active as well,” a regional producer said.

Overall sentiment is expected to remain buoyant unless there is any untoward development in the ongoing US-China trade war.

Focus article by Min Jie Yaw

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