PS dips below US$900 as Styrene Monomer prices steady

12-Nov-08

China's stimulus package estimated at Yuan 4 trillion (US$586 bln), will be spent over the next two years to finance programs in 10 major areas- low-income housing, rural infrastructure, water, electricity, transportation, the environment, technological innovation and reconstruction after several disasters, most notably the May 12 earthquake in southwestern Sichuan province. This is expected to boost demand for plastics. Market players in Chinese petrochem/polymer industry are currently in a wait and watch mode as they prefer to hold on to assess the effect of the plan on market dynamics. The Styrene Monomer market in China is currently in a state of impasse, deficient in specific offers. CFR China prices remained unchanged at US$580/MT on low volumes of transaction. Also, plant shutdowns by domestic players Do How Chemical and Jiangsu Shuangliang Lishide Chemical Co, has and reduced run rates by others has squeezed supply of spot SM cargoes in the domestic market of China. European buyers have sourced approx. 40,000 tons of cargoes from the Middle East, Asia and USA. Is this an indication of revival of price talks in the European market? The Chinese economic package has not yet percolated to impact PS markets, where a pessimistic outlook continues on persistent demand. GPPS prices dipped below US$900/MT CFR China levels as buyers abstained from concluding deals.