The spot markets for styrene and derivative PS are moving in opposite directions this week in Asia as per Chemorbis. Spot PS prices are slipping even as feedstock SM prices are rising to regain all the losses of the previous week. Spot styrene prices has been significantly volatile over the past two weeks- beginning at the last week of January at around US$1320/ton FOB Korea, plunged to US$1250/ton the next week and dipped to US$1240/ton FOB Korea during last week. Despite the continued weakness in China’s demand as the holidays draw ever closer, spot styrene prices have bounced back up this week, reported as of this morning at around US$1320/ton FOB Korea.
Major factors contributing to the weakness in prices include deteriorating demand in China ahead of the Chinese New Year holidays, the Chinese government’s ongoing efforts to tighten monetary policy and lower crude oil costs. The rise in spot styrene prices has been accompanied by a recovery in the crude oil market, with crude oil futures on the NYMEX gaining approximately US$4/barrel on the week. Also, traders are actively bidding for March cargoes, with most players in Asia having shifted their focus to March as few deals are expected to be concluded in the region just a week before the Chinese New Year.
Interestingly, spot prices of derivative PS have moved lower in the region as sellers have reduced their prices in the face of lackluster demand. The largest price decreases have been recorded inside China, where distributors have cut their prices for both GPPS and HIPS by around CNY200-600/ton (US$29-88/ton) this week, mainly due to sluggish demand as well as their mounting sales pressure. Overseas producers have also met with poor demand and rising sales pressure this week in China, although these producers are generally taking a firm stance on their offers for the present owing to high production costs and limited availability. In Southeast Asia, a global producer announced a price reduction of US$20/ton on their offers for Singaporean PS this week, due to poor demand, while distributors in Indonesia also announced reductions of US$20/ton on their offers this week in hopes of speeding up their sales. Other sellers in the region are said to be more willing to discuss discounts with their customers, although converters say that they are in no rush to replenish their stocks right before the Chinese New Year holidays, with many claiming that their existing inventory levels can last them for the rest of the month.