Asian GPPS markets continue to spiral down

03-Nov-14
In Asia, GPPS markets remain on a downward trend while the upstream styrene cost, which had recovered at the end of the previous week, reversed the hikes they recorded and lost larger ground during this past week, as per ChemOrbis. The downturn was attributed to the decreasing upstream benzene costs putting pressure on styrene prices. Asian styrene costs wrapped up last week at US$50/ton lower levels when compared to the previous week both on FOB South Korea and CFR China basis. The average import GPPS prices on CFR China basis reached a two-year low not seen since late August 2012, according to ChemOrbis Price Wizard. Meanwhile, local prices also saw up to CNY200/ton (US$33/ton) discounts amidst poor buying interest. Prior to import prices in China reaching their lowest levels in two years’ time, Southeast Asian PS markets have had already hit a two-year low, around two weeks ago. Since then, import prices in Southeast Asia continued to soften and a couple of producers issued further decreases of US$10/ton and US$40/ton to the region this past week. Overall import prices came down by US$20/for GPPS and by US$20-40/ton for HIPS in Southeast Asia. “We struggle to maintain our prices amidst weak demand and therefore, we issued decreases,” cited one of these producers. On another note, a buyer reported seeing improved demand on their end products and that they are to make fresh purchases. “However, we are planning to negotiate the prices even after the recent decreases,” he further added. Meanwhile, in China, a trader, who kept their import prices stable during this past week, added that they are willing to offer US$20/ton discounts on deals. “Most producers are nowadays bringing down their operating rates by around 30-40%. Overall demand is not good and the economic data is not encouraging. We are not very optimistic for over the near term.” A converter operating in China also complained about their weak end business and portrayed a rather gloomy outlook for their expectations. According to ChemOrbis, a source at a Chinese producer commented that they left their list prices stable on the week but admitting to offering discounts for deals. “We are currently running our plant at 60-70% capacity and we hear that some players are planning to reduce their operating rates amidst sluggish demand. Since the year end is impending, we see no change or rebound for over the near term,” he further added.
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