PS values in Asia flattened by declining styrene monomer and benzene values

20-Oct-08

Polystyrene prices in Asia have plunged further south by hundred dollars along with falling feedstock SM and benzene values, as most buyers prefer to wait in the sidelines. Benchmark CFR China offers for GPPS have dropped to range at lows of US$1250-1300/MT, but continue to be met with dampened buying interest pegged at least fifty dollars lower as feedstock Styrene Monomer prices dipped to the US$900/MT mark. A further 25-30% reduction in run rates has been made by many polystyrene producers in Asia, while the South Korean producers are maintaining a 50% run rate- due to diminishing downstream demand. SM as well as benzene prices have fallen- benzene by almost ninety dollars. Non-integrated SM producers are trying to maintain production and sales in balance with 80% benzene and 20% ethylene, plus a per ton processing cost of US$150. But problems are arising for those producers who had SM inventories on hand, sourced previously at a much higher rate. Benzene prices have ebbed to over 30 month lows on worries of dampening market outlook in the wake of the inevitable global economic recession causing a situation of oversupply and persistently subdued downstream demand. Hence, key benzene maker SK Energy Corp plans a shut down at its No.1 naphtha cracker at Daesan by end of month or early next month.