- Local and import PS offers recorded on a downtrend during March
- Buying sentiment affected due to the slump in crude oil prices
- Market players expressed the possibility for a further price reduction
Following the decreases in SM prices as well as the weak demand in the first week of March, SSESSMENTS.COM’s team noted that a Chinese PS producer decided to reduce GPPS Injection and HIPS Injection offers between CNY100-200/ton ($14-28/ton). While other sellers decided to keep the offers stable. Moving to the following week, the offers for local GPPS Injection and HIPS Injection were trimmed between CNY100-300/ton ($14-42/ton). By the third week of the month, the majority of local producers reduced GPPS Injection and HIPS Injection offers between CNY100-300/ton ($14-42/ton). In the following week, most local producers trimmed GPPS Injection and HIPS Injection offers between CNY150-300/ton ($21-42/ton). All changes on a weekly comparison.
For import cargoes, in the first week of the month customers were submitting bids for Vietnamese GPPS Injection at $1,000/ton on LC at sight, CIF China Main Port basis, however, the bids were rejected. While in the second week, import Vietnamese GPPS Injection to the China market decreased by $20/ton. Likewise, the offers for South Korean GPPS Injection and HIPS Injection dropped by $10/ton. Sources added to SSESSMENTS.COM that Vietnamese GPPS Injection offers also decreased between $10-20/ton. While Taiwanese GPPS Injection and HIPS Injection slump by $40/ton. All changes compared to a week earlier. By the final week of March, customers were submitting bids for Vietnamese GPPS Injection at $120-170/ton lower from the initial offer level, which was rejected by the producer.
SSESSMENTS.COM was told that the buyers were keeping the procurement on a hand-to-mouth basis during the first week of the month. However, following the slump in crude oil prices combined with the slow demand for finished products, the demand for PS in China was slowing down during the second week. Buying sentiment weakened and buyers preferred to wait on the sideline as the market uncertainties piled up following the volatile crude oil and SM prices. On March 3, the SM price on CFR China basis recorded at $805-809/ton. Affected by the crash in crude oil prices, supply glut as producers and manufacturers were running at low operating rates as well as the significant decreases in Benzene price, SM price dropped $286/ton within a month. By March 31, SM prices recorded at $519-523/ton. Moreover, export orders have declined as the Coronavirus outbreak intensifies and the number of deaths increased, especially in Europe and America which led to growing concern over the pandemic.
Pertaining to the outlook, the majority of Chinese market players expressed an opinion to SSESSMENTS.COM that there is a possibility that PS prices will decrease further if crude oil prices are unable to rebound to $30/ton-level per barrel and SM prices continue to decrease.
