Relentless increases on Asian styrene put pressure on global PS markets

10-Jan-11

Asian styrene prices continued their upward trend after the new year as they gained US$45/ton when compared to the last working day of 2010, as per Chemorbis, styrene prices remain firm despite the ten dollar drop on Friday in line with oil prices that dropped below the US$90/bbl threshold on 6 January. The most recent increases put further pressure on Asian PS prices as they are still traded below theoretical production costs. In China, import PS prices recorded additional increases during the past week as overseas producers chose to lift prices by US$30-50/ton to catch up with higher styrene costs. Despite the recent increases, current import GPPS range is being traded US$55-95/ton below the theoretical GPPS production based on spot styrene prices. In Southeast Asia, PS prices also recorded increases in the import market due to the same reason as the rising upstream costs pulled PS offers up. Similar to China, import sellers raised their prices by US$20-50/ton to recoup their margins. These increases caused the overall import GPPS range to gain US$30-60/ton on week over week basis. In Egypt's import PS market, Far Eastern GPPS offers indicate US$20-50/ton increases in a week's time on the back of the higher upstream costs despite seasonally low demand. However, Asian PS offers are still under upward pressure in Egypt when considering the most recent Asian GPPS offers to China, with room to move up US$15-30/ton. The general expectations in the global PS markets centre on further increases on Asian PS prices as long as the upstream markets continue to support sellers, though low seasonal demand might prevent producers from lifting up their prices as high as their production costs in the near term.