Pace of PS drops in Asia slackens; ABS downtrend in full swing

Styrenics markets in China and Southeast Asia remained on a downward trend during the week ending June 2. Although sluggish demand continued to weigh on prices, the pace of PS decreases has slackened lately amid firming spot styrene prices. Meanwhile, the ABS downtrend that has been in place in the past seven weeks is still at a full swing.

Styrene props up low ends of PS prices

Asia PS markets have been witnessing decreases for the past six weeks, with the sentiment remaining bearish despite strong energy values. This was because Covid-hit demand across the region reduced downstream requirements, which also forced high ends to be trimmed down as of last week.

A lack of confidence in the demand outlook amid COVID-19 lockdowns continues to keep resin consumption restricted as manufacturers prefer to source on a hand to mouth basis. Buying resistance also emanates from converters’ inability to pass costs down to their customers.

However, import PS prices have stabilized on the low ends of the price ranges, supported by firming spot styrene markets. Plus, some suppliers issued GPPS increases in China’s local market.

In China, import prices of overall origins were assessed stable to $10-20/ton lower on the week at $1390-1480/ton for GPPS injection and at $1690-1760/ton for HIPS injection on CIF China, cash basis.

In Southeast Asia, import PS injection prices were assessed stable to $20 lower at $1420-1490/ton CIF SEA, cash for GPPS and at $1760-1840/ton for HIPS.

Spot styrene up by more than 6% in 2 weeks

Oil has hit a 32-month high on a bullish cocktail of factors. Global oil benchmarks retain their strength at their highest levels since October 2018, the weekly average data of ChemOrbis Price Wizard showed.

Spot styrene prices in Asia responded to the crude rally two weeks ago. Data from ChemOrbis Price Wizard revealed that spot styrene prices posted cumulative increases of around $75/ton to stand at around $1240/ton CFR China and $1220/ton FOB Korea basis.

Weak demand eclipses firm costs in ABS market

ABS prices remained unfazed by rising spot styrene amid pandemic woes, aggravated by the Delta variant. Demand has shown no uptick despite suppliers’ successive price cuts, with buyers holding off purchases. They complain about the difficulties to pass higher production costs onto their downstream buyers amid poor demand for finished products.
In China, import ABS inj. prices for overall origins were assessed $20-60/ton lower at $2350-2410/ton CIF, cash.

In Southeast Asia, import ABS inj. prices were assessed at $2360-2420/ton CIF, cash, down by $40-60/ton on the week.

What lies ahead?

The trajectory in the styrene market will be pivotal in setting the tone of the market. As for the near term, PS prices in China and Southeast Asia are expected to be rangebound with supportive feedstock costs on one hand and weak underlying demand on the other.

When it comes to ABS, the sentiment remains weak due to the uncertainties amid rising infection rates across many countries. Strong upstream markets may take the edge of the downward pressure on the ABS market to some extent.