Polystyrene offers continue to retreat in Asia, Egypt

Since the beginning of the month, spot styrene prices in Asia have recorded decreases of around US$40/ton FOB Korea basis, as per Chemorbis. During the past week, styrene prices followed a volatile trend in line with fluctuating oil prices – starting the week on a steady note, then moving lower as the week passed by, to finish the week US$15/ton lower than the prior week. In China, import PS offers lost ground by US$10-35/ton for dutiable GPPS while non-dutiable GPPS lost US$15-20/ton on a week-on-week basis. In the HIPS market, dutiable import offers retreated by US$5-10/ton while non-dutiable offers shed US$15-20/ton over the same period. In the domestic market, PS prices softened CNY100-300/ton (US$15-44/ton) week-on-week. Softer feedstock costs as well as the low season for many PS applications are identified as the main factors behind the declining price trend. Most converters complained about the state of their end businesses as they elected to lower operating rates by an additional 10% to bring run rates at 50-60% of capacity. Local distributors also complained about the bearish market outlook, with several distributors suspending their PS business due to poor sales. A similar situation was observed in Southeast Asia, as import GPPS prices lost US$10-30/ton while HIPS offers declined US$30/ton CIF SEA, cash equivalent basis. Regional producers conceded to additional decreases of US$20-30/ton this week, but buyers continue to shy away from imports with the expectations of even lower prices in the days ahead. In Egypt, Asian PS prices continued their steady decreases in line with bearish developments in Asia. Asian GPPS offers shed US$30/ton while HIPS offers fell US$20-30/ton on the week. Buyers are acting cautiously towards the import market, preferring to divert their already limited buying interest to the local market even though locally held prices carry a premium of US$150/ton more than over imports. Buyers complained about their weak end business with many converters predicting lower prices in the upcoming days. The bearish outlook in the Asian PS market is expected to continue over the near term assuming no major up-turn in upstream markets. The theoretical Asian PS production cost comes to US$30-60/ton below the prevailing GPPS range in China based on the current spot styrene prices. Meanwhile, when taking the GPPS price range in China into consideration, a theoretical Asian GPPS price to Egypt shows that there is still room for Asian PS offers to retreat in the Egyptian market as well.
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