Asian PS markets remain firm under shadow of thin demand, crude
According to ChemOrbis Price Index, import GPPS and HIPS prices witnessed cumulative increases of around $90-100/ton on average since mid-May in both China and Southeast Asia.
Despite the steadily rising trend in Asia, PS demand in China was defined as dull given the end of the peak season as well as buyers’ reluctance to make fresh purchases amidst falling crude oil futures. It is considered weaker in Southeast Asia as the rainy season coupled with the Ramadan month has been dramatically weighing down on the regional demand for the last couple of weeks.
A trader in Indonesia reported that South Korean PS offers were up by around $10-30/ton on the week, saying, “However, regional buyers aren’t interested in making fresh purchases right now as the Eid holiday is about to start and most players will be away from their desks for around two weeks. Plus, we think that styrene may lose further ground as crude oil futures have hit their lowest year-to-date level recently. ”
WTI crude on NYMEX and Brent futures on ICE have both been trading below the $50/bbl threshold for the last three to four weeks. In the first half of this year, oil showed its weakest performance since 1997, according to Reuters, losing 20% in value.
Meanwhile, a Southeast Asian producer noted, “PS prices might firm up slightly following the end of the Eid holiday, yet we are not feeling sure as to whether or not an upturn can be sustained when demand is weak and costs are weaker.”
In China, a trader reported that two Taiwanese producers applied weekly increases of around $40-50/ton on their offers last week. A source from a Taiwanese producer commented, “We think that the recent uptrend of PS is mostly based on speculations about supply limitations rather than real demand.”
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