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Lower upstream costs push import PS further down in SE Asia

  • 06/10/2017 (12:34)
Import PS prices have been easing since they reached their peak at the beginning of September in South East Asia. Beforehand, the market tracked a stable to firm path between mid-May and mid- August while the upward momentum gained speed in the latter part of August before PS prices hit a 7 month-high in early September, as weekly average data from ChemOrbis revealed.

This was mainly due to drastic hikes from producers in line with rallying upstream chain. Yet, in the last one month, rapid losses in styrene and butadiene costs in Asia along with waning demand given the National Day holiday in China have paved the way for a weaker trend in the region.



PS demand remained slow across the region this week as Chinese players have been out for week-long holiday and several buyers elected to stick to the sidelines in their anticipation of hearing additional price drops based on lower costs. A packaging converter in Vietnam reported receiving lower GPPS prices this week and added, “We still think the prevailing price levels are too high. We expect them to see below the $1400/ton threshold next week. We may consider replenishing our inventories when prices go down to $1300/ton.”

A manufacturer in the Philippines said, “We have no purchasing plans for now considering the low season for our end products. Yet, we project a revival later in the year due to the preparations for the Christmas holidays.”

According to a trader based in Indonesia, end users are not in a hurry to purchase raw material as they expect to see more competitive PS offers later in October. “We are also keeping low stocks since it’s risky to build much material considering fading support from monomer markets,” he stated.

“Our South Korean source issued declines of $20-40/ton for GPPS and $30-40/ton for HIPS. Nonetheless, they are now sold out for October and feel no stock pressure thanks to their annual turnaround which is due to start next month,” noted a trader.

A trader in Malaysia attributed reduced buying appetite from end users to weak PS expectations amidst volatile styrene costs in Asia. “However, a regional producer will conduct a maintenance shutdown at its GPPS plant, which caused them to keep their offers flat for this week,” he said. A Vietnamese producer lowered its GPPS prices by $40/ton to the region compared to September.

In the meantime, whether the maintenance shutdowns in fall will manage to limit price decreases for PS or not remains as a question mark among regional players. Denka Singapore and Petrochemicals Sdn Bhd have shut their PS plants for scheduled turnarounds for around 35-40 days as of early October. Styrolution is also set to take its PS plant offline in November while the duration of the shutdown was undisclosed.
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