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Will cost-driven PS, ABS hikes prove sustainable in China?

  • 08/11/2017 (04:05)
In China, after following a softening trend since mid-September, the styrenics market has witnessed some slight gains so far this week as the rally of crude oil futures as well as the recent recovery in spot styrene and benzene prices in Asia encouraged some sellers to take firmer stances. However, regional players are mostly questioning the sustainability of this firming given the lack of support from the demand side.

As can also be seen in the below graph created by ChemOrbis Price Wizard, the weekly averages of import PS and ABS prices showed a slight uptick this week after witnessing consecutive decreases for more than a month.



A Taiwanese producer increased its offers by $20/ton for both GPPS and HIPS injection this week while raising its offers for ABS injection by $30/ton when compared to its most recent levels. A trader noted, “The agents of the Taiwanese producer are now standing firm on their offers due to higher upstream costs. ABS trading is slightly better this week, yet overall demand is still too weak to support a bullish trend.”

A Southeast Asian producer also raised its ABS offers by $10-20/ton from two weeks ago, but a source from the producer noted, “Our offers are slightly up this week; however, we need to monitor buyers’ response in order to be sure about the sustainability of this firming. We think the ABS market will display a rebound if costs and crude oil prices manage to remain firm in the near term.”

Meanwhile, a Chinese producer also applied a weekly increase of CNY100/ton ($15/ton) on its PS offers. “We raised our local PS offers on a weekly basis as styrene prices in China turned up recently while crude oil prices are also quite firm nowadays. Firmer import offers also supported the sentiment in the local market. We think prices may preserve their recent firming so long as the support from styrene and crude oil prices continue,” a source from the producer opined.