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Asian PS, ABS markets remain under the shadow of weaker costs, demand

by Thi Huong Nguyen -
  • 05/12/2023 (01:57)
The PS and ABS markets in Asia have followed a two-month retreat amid a double-whammy of lower costs and poor demand. Heading to the third month, these bearish factors have still kept the styrenics markets moving downhill, although some suppliers have lamented cost pressures.

PS saw further drops in China, month-long breather in SEA

For the week ending on December 1, China’s import prices for overall origins were assessed $20-25/ton lower from the previous week at $1160-1195/ton for GPPS injection and $10-40/ton lower at $1210-1260/ton for HIPS injection, on a CIF, cash basis. The domestic markets also recorded renewed losses of CNY100-250/ton ($14-34/ton).

For the same week, Southeast Asia witnessed import PS prices for overall origins being assessed stable from the previous week at $1150-1280/ton for GPPS injection and $1210-1350/ton for HIPS injection, both on a CIF, cash basis.

Data obtained from ChemOrbis Price Index illustrates that the weekly average import prices in the two regions were hovering around their lowest level since late August–early September, as can be seen in the graph below.


ABS markets lost 6-8% within 2 months

ABS prices in both China and Southeast Asia retreated further during the week ending on December 1. The overall range for import ABS inj. prices was assessed $10-20/ton lower from the previous week at $1250-1380/ton CIF, cash in China, and stable to $20/ton lower at $1250-1430/ton on the same terms in Southeast Asia. The prices in China’s local ABS market were also assessed CNY100-300/ton ($14-42/ton) lower from the previous week.

The import ABS prices in both markets have reached their more-than-two-month lows on a weekly average, according to ChemOrbis data. Meanwhile, the data also suggests the prices have fallen by a cumulative amount of 6-8% since late September, when they hit their year-to-date highs.


Chinese cargoes offer competitive edge in SEA

The ongoing downturn has paved the way for Chinese materials to be offered in Southeast Asia at aggressive levels. Offers for Chinese PS have been reported at as low as $1150/ton for GPPS and $1210/ton for HIPS on a CIF Southeast Asia, cash basis, while the prices for ABS from the same origin have been recorded at $1250/ton on a similar basis.

These competitive offers trimmed the overall market levels and heated up competition in the regional markets since buyers have shifted to low-priced materials as an option for margin protection. “Chinese offers are much lower when compared to other origins, so buyers have preferred to buy Chinese materials recently,” said a Vietnamese trader.

Weakness in cost and demand dents confidence

The energy markets have experienced strong volatility lately, while styrene prices have tracked a downward movement in the past two weeks, currently reaching their three-month lows, according to ChemOrbis Price Wizard. The erosion of costs has dampened market sentiment, mainly fueling the latest round of price cuts.

A source at a Taiwan-based producer operating across Asia’s styrenic markets commented, “Defying some increases in crude oil, styrene prices have been consistently falling recently, putting downward pressure on the trading atmosphere.”

Contributing to unsupportive production costs, a persistent slowdown in downstream demand has also kept sellers under sales pressure, prompting them to reduce the prices in order to destock mounting inventories. A Taiwanese trader noted, “Recently, styrene has exhibited a relatively weak trend. Downstream demand is stagnant, with factories maintaining need-based replenishment. In general, market sentiment is increasingly cautious.”

In the meantime, players currently expect these bearish factors to remain on the table and cloud the near-term outlook. Considering buyers’ anticipation of lower prices, purchase power seems to have no room for any possible improvement, while year-end demand is negligible. Styrene prices might yield to the recent downswing in crude oil, which is retreating after falling by more than 2% on Friday’s settlement, resulting in lower costs and weaker sentiment as well.
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