Higher styrene costs pull up Asian PS in global markets despite thin demand
Higher Asian styrene prices, propped up by tight supplies, caused polystyrene (PS) prices to move up in global markets including China, Southeast Asia, Turkey and Egypt, as per the pricing service of ChemOrbis. Prices moved higher despite overall weak global demand for the polymer.
Asian spot styrene prices gained $85/ton since the beginning of October. Inside China, prompt styrene supplies are still said to be very tight while the benzene feedstock costs are also continuing to move up and put an upward pressure on styrene makers. Spot benzene prices in South Korea indicate $90/ton increases when compared to the start of the month. Prompt benzene supplies are tight and sellers see support from good demand coming from the US market in order to raise their benzene prices.
The inevitable effect of these bullish upstream costs come as increase announcements on PS prices although PS converters complain about weak demand in global markets. In China, where overall PS supplies are not comfortable, import Asian offers gained $10-20/ton increases over this past week for both dutiable and non-dutiable origins at the low end of the ranges while the high ends retained their previous week’s levels. Current offer levels still suggest that producers are offering below the theoretical PS production costs when considering the prevailing spot styrene prices.
A trader in East China told ChemOrbis, “We raised our import GPPS prices owing to the tight supplies and higher styrene costs. Our HIPS prices recorded relatively smaller increases of $10-20/ton when compared to GPPS. We expect a stable to firm trend over the short term.” Another trader commented, “We are actively searching for buyers with serious buying interest while we hold low PS stocks. We currently lack a clearer view on the market as prices see support from higher upstream costs and availability issues however; converters show limited demand due to their weak end product orders.”
In Southeast Asia, PS prices moved up by $20-30/ton for GPPS and $35-40/ton for HIPS due to the same reasons and converters show resistance towards these higher prices. Sellers complain about the thin demand, but they say that they cannot afford to step back from their offer levels given their higher production costs.
A source from a Singaporean producer noted, “We raised our prices due to higher styrene although demand is not that great. However, we have no option but to raise our offer levels.” The source does not expect a great recovery on PS demand in the last quarter of the year. Meanwhile, a source from a Hong Kong producer voiced their thoughts, “We raised our GPPS prices due to the higher feedstock costs and because of the high costs we are running our plant at 70% capacity. We believe that upstream costs will have to be adjusted down given the fact that higher offer levels do not generate any PS demand.”
In Turkey, supply levels are also tight, especially for HIPS, which caused relatively better demand for this product. Asian GPPS offers tracked a stable to $40/ton higher trend while HIPS prices gained $20-50/ton on a week over week basis. Egyptian players also faced higher PS offers towards the end of the week, although demand in the country is not bright. A trader complained, “Following negotiations, we accept $15-20/ton lower counter bids but even then, buyers push for larger discounts. Nevertheless, we are not capable of offering further discounts given our high import costs.”