Asia EPS demand to stay soft near term; China supply ample

Yaw Min Jie

20-Mar-2019

SINGAPORE (ICIS)–Demand for expandable polystyrene (EPS) in Asia is expected to stay soft in the near term due to a seasonal lull in the key China market amid abundant supply.

Construction is a major downstream for EPS (Photo by Andy Wong/AP/REX/Shutterstock)

But regional producers were nudging up prices amid production losses, with the EPS spread over feedstock styrene mononomer (SM) at below the breakeven level of $180/tonne since late January.

On 15 March, spot EPS prices were ­assessed firmer week on week at $1,250-1,260/tonne CFR (cost & freight) China, according to ICIS data.

ICIS Editorial Chart goes here

Demand in China is especially tepid due to a seasonal lull in the downstream construction sector, which will likely keep EPS production rates low in the coming weeks.

EPS is used in making insulation panels and roads.

“Chinese EPS makers are operating at around 50% now and are not like to ramp up operating rates anytime soon,” a regional producer said.

Demand in southeast Asia is comparatively better and Asian suppliers prefer selling into this region instead.

“Demand from southeast Asia is better because some food packaging producers are replenishing inventory in anticipation of the upcoming Ramadan festivities in May,” a regional distributor said.

EPS supply in the China market is also more than sufficient to meet demand at present, as Chinese end-users currently have healthy inventory levels while regional producers were reportedly operating at around 70% of capacity.

Regional producers were keeping operating rates low to stem losses as EPS’ premium over feedstock SM fell to a fresh intra-year low of $160/tonne in the week ended 8 March, ICIS data showed.

Focus article by Yaw Min Jie

READ MORE

Global News + ICIS Chemical Business (ICB)

See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.

Contact us

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?