Despite firm styrene, weak demand pulls down Asian PS markets

In Asia, despite still firm styrene costs, PS markets took a downward trend on the back of thinning buying interest, as per Chemorbis. Sellers operating in China and Southeast Asia could not insist on their offer levels given the persistently weak demand. In upstream markets, styrene costs mostly remained stable at firm levels through July despite the benzene costs, which recorded US$20/ton decreases since the beginning of the month. Since July 1, spot styrene prices were preserving their levels with minor fluctuations. However, when comparing styrene and benzene prices on a month over month basis, they indicate US$50-55/ton increases for styrene and US$40/ton hikes for benzene. In China, import PS offers, both for dutiable and non-dutiable origins, recorded US$15/ton decreases at the low end of the GPPS range and US$20/ton drops on the low end of HIPS range. A trader in China commented, “Overall market sentiment is still disappointing. We do not anticipate any pick up over the near term, especially for HIPS, for which demand does not show any signs of improvement. Most buyers do not want to keep inventories because even the food packaging sector is performing poorly these days. We believe that prices may not be able to move up since demand remains sluggish.” A Hong Kong based producer remarked, “We kept our offers stable during this past week but for deals, we are open to negotiations and we are willing to offer US$10-20/ton discounts. We were initially expecting a demand pick up in the July-August period but our expectations did not materialize. We hear from the market even Christmas orders are not as good as last year. For GPPS, we run our plant at 80-90% capacity while we stopped our HIPS line for two weeks given even weaker demand for this product. Yet, we still hold sufficient HIPS inventories to offer.” In Southeast Asia, GPPS prices mostly tracked a lower trend on a week over week basis but HIPS prices tracked more of a stable to firmer trend over the same period. Supply levels appear to be balanced in Southeast Asia but overall demand was not good, like in China. A converter in Vietnam commented, “We received US$20/ton lower PS offers on the week. If we are serious about purchasing these cargoes, we are confident we could obtain additional discounts. We see moderate demand for our end products, disposable products, but we are still not sure about taking additional polymer stocks or not.” A Taiwanese trader noted, “Prices are mostly stable from Taiwan given the mostly steady upstream costs. However, demand does not show any signs of improvement and therefore, we are not feeling optimistic about the future market outlook. We prefer to monitor the market at the moment.” According to ChemOrbis, a Thai producer also reported lowering their GPPS prices given the weak demand during the low season for PS applications. In Singapore, a converter manufacturing automotive parts and home appliances said that their end product demand has slowed down. The converter is not expecting any pick up in August, either.