Firming PS trend in Asia falters on lower styrene, ABS remains unresponsive
As can be seen in the below graph created by ChemOrbis Price Wizard, weekly average styrene prices on FOB Korea basis have been posting decreases for the last two consecutive weeks after reaching their highest levels since early April. Apart from styrene, butadiene prices on CFR China basis also declined $50/ton when compared to mid-July levels.
In Southeast Asia, an Indonesian trader reported that their South Korean supplier decreased its PS offers by $30/ton for HIPS and by $50-70/ton for GPPS due to lower styrene prices. However, their ABS prices increased $50-100/ton last week given low ABS supplies.
“ABS prices were indifferent to the recent losses in styrene prices and they posted additional gains. Although no done deals were reported so far this week, the producer is not under a lot of pressure as ABS supply seems tight,” he commented.
In China, two Taiwanese producers applied a weekly increase of $30/ton on their ABS offers to the country and kept their PS offers unchanged from last week. Their allocation of ABS was limited while it was smooth for PS.
A trader opined, “Although some players are concerned about the weakening in the upstream markets, the sentiment in the ABS market remains bullish on the back of the low inventories of Taiwanese producers. Several agents of these producers are nowadays offering cargoes with shipments in late August or early September.”
How long ABS prices will continue to defy lower styrene prices in Asia and remain under upward pressure from tightness is yet to be known. Plus, Asian styrenics players are also following up the recent gains in crude oil prices closely in order to see if they will influence styrene, and accordingly PS prices.
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