Asian PS players eye the return of China amid divergent expectations
In Asia, spot styrene prices on an FOB South Korea basis remained on a bearish path over the past week despite crude oil prices on NYMEX breaking above the $50/barrel threshold on October 6 for the first time since June. “We don’t expect an upturn in the styrene market given ample regional supplies,” a Southeast Asian converter opined.
Sellers concurred that the styrene trend is pushing buyers to the sidelines in anticipation of seeing additional reductions in the near term. “However, we should keep it in mind that demand might improve in line with the return of China from holidays. Plus, Christmas preparations will soon begin. The softening PS trend will take a break when buyers start to replenish their stocks,” commented a source from a regional producer. A seller also noted that skyrocketing butadiene costs may help sentiment to firm a bit even if styrene defies the crude gains.
As opposed to sellers’ comments, an end product manufacturer argued, “We are reluctant to make fresh purchases at the current levels as we believe that styrene prices will witness further softening given high inventories.”
Meanwhile, a source from a Taiwanese producer affirmed that they concluded lower deals given weak demand. “When compared to two weeks ago, our latest deal levels indicate $10-30/ton drops for GPPS and a stable to $20/ton softer trend for HIPS. Demand is still weak given buyers’ need-only based purchases, yet we don’t want to sell below these levels as they are almost at par with our costs,” a producer source said.
Regarding South Korea’s Hanwha Total Petrochemical’s shutdown at their 650,000 tons/year styrene plant, the source commented, “We don’t expect to see a major impact on the market due to the current state of demand.”
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