Gap between GPPS and HIPS prices shrinks in China

16-Nov-15

Polystyrene prices in China are standing at multi-year lows due to persistently weak demand and softer spot styrene prices and the gap between import GPPS and HIPS prices shrank notably at the end of last week, as reported on www.ChemOrbis.com. In addition, import ABS prices also lost some of their premium over HIPS after moving lower on a weekly basis. Import GPPS prices were stable to slightly softer week over week to be currently standing at their lowest levels recorded since early June 2009. HIPS prices, on the other hand, posted sharp weekly drops of up to US$90/ton, reaching their lowest levels since late April 2009. A local producer confirmed the narrower gap between GPPS and HIPS prices. A producer source commented, “Demand is weak and it’s even worse for HIPS. Buyers are purchasing on a hand to mouth basis. The smaller gap between GPPS and HIPS has squeezed margins of sellers offering HIPS. As a result, not many HIPS offers are available in the market for now and we also prefer to offer GPPS. We are not optimistic about the outlook. Our current operating rate is 50% and many other major producers in China are also running their plants at this rate.” A source from a South Korean producer also reported that demand is weak for both PS and ABS as buyers are limiting their purchases to a needs only basis. The gap between ABS and HIPS prices also shrank from US$90/ton in late October to US$35/ton this week, with ABS prices standing at their lowest levels since early 2012 when ChemOrbis began keeping records for this product. Lower ABS prices were attributed to weaker spot styrene prices as well as stagnant demand for ABS as the uncertain outlook stemming from volatile crude is pushing both sellers and buyers out of the market.