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Will tepid demand cast a shadow on upturn in Asia’s PS market?

  • 22/01/2018 (04:12)
In China and Southeast Asia, the upturn of PS has been sustained by sellers’ insistence on higher offers in the midst of strong upstream costs. However, demand is mostly unresponsive to sellers’ further hike requests since resistance has been built on the buyers’ side given the recent corrections of styrene as well as the approaching Chinese New Year holiday.

Several PS suppliers in Asia applied additional increases on their offers to China and Southeast Asia last week, pointing to their squeezed margins amidst high costs.

A Southeast Asian producer who implemented weekly hikes of up to $50/ton on its PS offers last week commented, “We were able to conclude a few deals, albeit in very small quantities. Despite buyers’ resistance, we maintain our firm stance given high price levels of crude oil, naphtha and benzene.”

A Taiwanese producer lifted its January offers further by $30-50/ton for GPPS and by $10-30/ton for HIPS to Southeast Asia and China. A source from the producer opined, “Strong crude oil futures continue to support the uptrend of PS. However, the sentiment is not that bullish due to buyers’ resistance to higher offers.”

A second Taiwanese producer also raised its prices by $10-50/ton on the week, saying, “Our offers firmed up further given high styrene and crude oil prices. However, we are open to give discounts based on the purchasing volume as our new levels met with resistance. Still, we believe that the market will follow the movement of crude oil and styrene prices in the near term.”

Meanwhile, a few players noted, “Despite its recent downward corrections, Asia’s spot styrene market is likely to follow an upward trend in the near term given a series of planned maintenance shutdowns in Taiwan, South Korea and Japan.”
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