Asia PS, ABS markets hit by US tariff chaos, export demand cools

Asia’s PS and ABS markets have come under significant pressure following the latest tariff hikes imposed by the US on Chinese and Southeast Asian goods, with demand taking a notable hit across key manufacturing sectors.

The tit-for-tat tariff escalation, culminating in China raising duties on US goods to 125% and the US pushing rates on Chinese imports up to 145%, has sent shockwaves through regional supply chains. Although the US introduced a 90-day freeze on most country-specific tariffs, it maintained a 10% blanket duty on nearly all US imports.

Styrenic resins, widely used in home appliances, toys, electronics, automotive parts, and packaging, have borne the brunt of this tariff-driven demand slump, leading to a persistent downward trend in prices.

Prices sink to multi-year lows as Chinese offers undercut SEA markets

As of the week ending April 11, import PS prices in China and Southeast Asia declined by $20–40/ton. According to data from ChemOrbis Price Index, the weekly average for GPPS injection prices on CIF China basis dropped to its lowest point in nearly two years. Meanwhile, Southeast Asia’s HIPS injection and other PS grades hit their lowest levels since H2 2023.

Competitive Chinese offers continued to dominate the lower end of Southeast Asia’s import ranges, creating wide gaps with offers from other origins.

ABS injection prices in China also declined by $20/ton, reaching a one-year low on a weekly average basis, according to ChemOrbis data. In Vietnam, aggressively priced Chinese ABS offers at $1250/ton CIF pulled down Southeast Asia’s low-end import levels by $80/ton. With a $30/ton drop on the high end, the regional weekly midpoint fell to its lowest since mid-February 2024.

Tariff pressure triggers demand freeze

Market participants reported lackluster demand, particularly among manufacturers exporting finished goods to the US. Many buyers paused new purchases, opting to consume existing stockpiles amid the uncertainty.

“Demand is weaker now because it’s difficult to sell products to the US,” said a Chinese foodware manufacturer. “We’ve stopped purchasing for now since we have enough inventory. We’re waiting to see how the situation unfolds.” He added that while production at their facility continues, their US-based parent company is evaluating whether to relocate operations back home, underscoring concerns that recent US tariffs are intended to reverse decades of offshore manufacturing.

A Chinese trader echoed this sentiment, saying, “Finished goods like home appliances, major consumers of PS and ABS, are largely shipped to Europe and the US. With both markets under pressure, buying interest has dried up.”

Similar reports came from across the region. A Vietnamese household goods exporter noted a sharp decline in demand since the tariff news surfaced: “We’re in a wait-and-see mode because everything is still unclear.”

Declining costs add another layer of weakness

Worsening the situation is the sharp drop in crude oil and heightened volatility across global financial markets. PS and ABS prices, which are closely linked to feedstock costs, have been hit hard.

With crude oil futures hovering around their lowest since February 2021, spot styrene prices tumbled by $50/ton to nearly two-year lows of $920/ton CFR China and $910/ton FOB Korea as of April 11, according to ChemOrbis Price Wizard.

This collapse in upstream costs has further eroded seller confidence. “We are not offering this week as we monitor styrene movements. Even when offers are available, no one is placing bids,” said a Southeast Asian producer.

A source from a Chinese PS producer shared a similarly pessimistic view, “Few buyers are reaching out for offers. They’re holding back in hopes of further discounts, given the persistent drop in crude oil and spot styrene prices. Plus, they’re not in urgent need of restocking, as their own customers have also suspended orders.”

What’s in store for the near term?

While supply remains ample amid ongoing production, the lack of upstream support and downstream push as well as increasing global economic uncertainty suggest the Asian PS and ABS markets may remain under pressure in the near term.

A Hong Kong-based trader remarked, “Market activity is very slow. External bearish factors continue to weigh heavily, and domestic demand remains tepid at best. We expect prices to decline further.” A converter added, “Export orders have vanished due to the tariff war. With upstream costs falling as well, we anticipate further price drops in the coming weeks.”