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Asia’s PS, ABS markets reach multi-month highs on cost support

by Thi Huong Nguyen -
  • 19/09/2023 (02:28)
In Asia, PS prices have remained on a stable to firmer course starting in early July, while ABS prices have not witnessed any losses since the second half of June. Sentiment in the styrenic markets has been mainly supported by the rally in crude oil and feedstock prices, defying the overall weakness in demand.

Prices hit multi-month highs

During the week ending on September 15, ABS and PS suppliers continued to apply cost-driven hikes of $10-50/ton, pushing the newest prices to their multi-month highs.

The average import PS prices on CIF China basis have reached their five-month highs, whereas the prices on CIF Southeast Asia basis are currently standing at their highest levels since late February, as per data from ChemOrbis Price Index. The data further indicate that China’s local PS prices have surged by nearly 20% since the upturn kicked off in mid-July. Local GPPS injection currently stands at around one-year high, while HIPS has reached the highest level since January 2023.

As for ABS, data obtained from ChemOrbis Price Index reveal that both regional import prices and China’s domestic prices on average have peaked since early May.

Cost pressure fuels additional hikes

The bullish trend in styrene propelled downstream PS and ABS prices, encouraging suppliers to speed up the process of cost reflection. Two traders underlined, “Styrene prices continue to move north, so suppliers are making upward adjudgments due to rising production costs.”

According to ChemOrbis data, styrene prices have been steadily rising to $1180/ton CFR China and $1170/ton FOB Korea as a result of rising crude oil prices, indicating gains of more than 13% in the previous two weeks. Additionally, butadiene prices surged by $130/ton to $1050/ton CFR China as of last week, also underpinning cost support for ABS markets.

In addition, strong upstream values have also lifted some players’ confidence about a sustained uptrend, with a Vietnamese producer expecting, “We believe the prices will have room to stay firm during this month.”

Demand keeps drawing a bleak picture

On the other hand, the current peak season and continuous upswing failed to lure buyers into the markets. Instead of stocking up to hedge against higher prices, buyers were still looking the other way. “Downstream factories are showing resistance to high-priced raw materials and making purchases with cautiousness,” said a trader.

Meanwhile, a Malaysian trader concurred on the fact that buyers were not in a hurry to replenish stocks. He commented, “Demand overall is unpromising. Some buyers replenished in the last 2 weeks. They can be covered for another 1-2 months, not to mention their end-product stock is quite high. Therefore, they are not in a rush to replenish, even though prices may go up further.”
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