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Asian PS producers lean to price negotiation on modest demand

  • 23/09/2016 (08:23)
Asian PS producers adopted stable pricing policies across regional markets for another week owing to support from supply constraints, including for styrene monomer. However, sellers confirm that demand is not brisk heading to National Day holidays next month in China. Under these circumstances, supply sources are relatively flexible on their offers considering the recent concerns regarding demand as well as softer spot feedstock costs compared to early September.

A Taiwanese PS producer offered flat levels on the week, saying that its prices were subject to negotiation. “We are almost offering at breakeven point and in case of a large order, we will need to give discounts at the risk of losses. Demand is not great these days except for a slight improvement in buying interest ahead of the upcoming Chinese holiday. We heard about improved styrene stocks in the region while weak demand may weigh down on the future outlook,” a producer source commented.

“PS producers already secured sufficient styrene before September turnarounds began and thus less impact is seen this month in the market. In any case, PS consumption is moderate in general and lower bids may exert pressure on sellers in the longer term,” a different Taiwanese supplier said.

A Malaysian PS maker sold some October shipment cargos this week mostly at stable levels from its last September deals. “We don’t have much material while current demand is not spectacular at all. We will be clearing our backlogs in the coming days,” the seller said.

A trader in China opined, “Although spot styrene costs in Asia demonstrated a softening trend, PS prices are holding firm so far. GPPS demand has been weak for a while, thus sellers do not bother to issue considerable discounts since it will not attract further buying interest.”

Another trader managed to sell Taiwanese GPPS with $30/ton discounts from his initial offer. He noted, “Typhoon Meranti which recently hit Taiwan did not affect petrochemicals operations. Although offers are mainly unchanged for PS, actual done deals stand $20-30/ton below these levels. We believe that prices may turn down in the last quarter of 2016.”

On the buyers’ side, a Malaysian converter was offered $20/ton discounts for Singaporean GPPS this week. The buyer foresees some cooling off in prices now that holidays are around the corner in China. This was in tandem with a Singaporean producer’s comment, saying, “Prices are slightly down this week given lower styrene costs. Buyers are still bidding lower though.”

A manufacturer in Vietnam, meanwhile, reported good end demand due to seasonal reasons. However, he has no plans to build inventories before the year end out of his softer price expectations. In China, an electronic appliances converter will wait until next week as a supplier told her not to buy much this week as prices may lose ground later.

Upstream, spot benzene and styrene prices on FOB South Korea basis represented around $30-35/ton drops compared to early September. Nonetheless, the recent gains in energy costs may pull the chain higher again, players remind.
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