Has downward trend come to an end for PS in Asia and Europe?
However, the recent gains in crude oil markets and, in return, in styrene markets have resulted in some Asian PS sellers to take a firm stance recently in global markets.
Last week, a Southeast Asian producer revised its PS offers up by $20-30/ton while a Taiwanese producer also increased its offers to Southeast Asia and China by $30/ton for HIPS following the rebound in styrene prices.
A trader operating in Taiwan noted that both GPPS and HIPS prices rose by $40/ton from a week earlier as their supplier argued that the bearish trend in spot styrene prices have come to an end following multi-month declines.
Facing a similar situation in their own markets, European PS players are evaluating the recent increases in the feedstocks markets and energy complex. Sellers are voicing the possibility of seeing the bottom in PS prices this month, expecting stable to firmer prices in June.
A trader in Germany said that they think PS prices have reached the bottom this month as styrene prices have posted a rebound since last week and accordingly, expectations have shifted to a rollover or increases of up to €40/ton from May.
However, the questions of whether this rebound will be sustainable or not are widely being voiced. Players in Asia are pointing to the upcoming low season for PS applications while weaker expectations also dominate on the buyers’ side in Europe due to thin demand.
A source from the Southeast Asian producer commented, “We are not sure as to whether the styrene rally will be sustainable in the near term as demand is expected to remain weak due to the low season.”
A Taiwanese producer said, “The market is quiet and we are yet to conclude any deals so far. Despite the rebound in PS followed by higher styrene prices, buyers are still not active in the market.”
Distributors across Europe also report that they are struggling to make sales despite the large decreases they applied in April and May, as there are much lower prices available in the midst of thin demand. Under these circumstances, the market may not respond to any firming attempt for now, some argue.
A manufacturer in Italy commented that they made purchases on a needs only basis as it is difficult to have a clear idea of the short term outlook amidst volatile upstream costs.
“We are closely tracking styrene costs to see if the recent rebound remains in place ahead of June. For now, we do not expect major changes,” reported a disposable manufacturer in Belgium.
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