The PS price decline in Asia has slowed; ABS is plummeting.
The styrene markets in China and Southeast Asia remained bearish in the week ending June 2. Although sluggish demand continued to affect prices, the pace of PS price declines has slowed recently. due to an increase in the spot price of styrene. Meanwhile, ABS, which has dropped in price over the past seven weeks, is still plummeting.
Styrene supports PS prices in the low segment
The Asian PS market has seen a decline over the past six weeks, as market sentiment remains bearish despite strong energy values. This is because Covid-hit demand in the region has dampened downstream demand, and also forced prices in the upper segment to ease last week.
The lack of confidence in the demand outlook due to the COVID-19-related blockade orders continues to limit the consumption of plastic resins as manufacturers only buy goods according to demand. Purchasing resistance also stems from the inability of companies that manufacture finished products to pass costs on to their customers.
However, import PS prices have remained stable at the lower end of the price range, thanks to the upswing in the spot styrene market. Besides, some suppliers have raised GPPS prices in China's domestic market.
In China, import prices from all origins are estimated to be unchanged or down 10-20 USD/ton from last week, to 1390-1480 USD/ton GPPS injection and 1690-1760 USD/ton HIPS injection according to China CIF method, cash.
In Southeast Asia, the price of imported PS injection is estimated to be unchanged or down 20 USD, at 1420-1490 USD/ton CIF Southeast Asia, cash to GPPS and 1760-1840 USD/ton HIPS.
Spot styrene price up more than 6% in 2 weeks
Oil prices have hit a 32-month high on the back of a series of bullish factors. Weekly average data from ChemOrbis Price Instrument shows that global benchmark oils remain at their highest prices since October 2018.
Spot styrene prices in Asia reacted to the rally in crude oil prices two weeks ago. According to data from ChemOrbis Price Index, spot styrene prices have accumulated a cumulative increase of about $75/ton, to around $1,240/ton CFR China and $1,220/ton FOB Korea.
Weak demand overshadows cost gains in ABS market
ABS prices remain undisturbed by the surge in spot styrene prices due to pandemic concerns and the raging of the Delta variant. Despite the continuous reduction of prices by suppliers, demand has not improved and buyers still stop buying. They complain of difficulties in passing higher production costs to downstream buyers due to poor demand for finished products.
In China, the price of imported ABS inj. from all origins is estimated to decrease by 20-60 USD/ton, to 2350-2410 USD/ton CIF, cash.
In Southeast Asia, the price of ABS inj. Imports are estimated at USD 2360-2420/ton CIF, in cash, down USD 40-60/ton from last week.
The trajectory of the styrene market will play an important role in setting the market's trend. In the short term, PS prices in China and Southeast Asia are expected to fluctuate within a range with support from input costs on the one hand and weakening of basic demand on the other.
As for ABS, market sentiment remains bleak due to uncertainties amid rising infection rates across many countries. Strong upstream markets could ease the downward price pressure on the ABS market to some extent.