As stated to SSESSMENTS.COM, a Chinese trader adjusts local PS offers following movement in SM prices and downstream demand this week. Even though the number of factories resuming production moved up, the trader pointed out that most downstream factories keep operation at their plants at a low rate, around 40-50% from the normal capacity to stem losses amid bearish demand, given the slumps in the automotive and home appliances sector. Recovery in export demand has yet to take hold as most countries around the world struggle to combat the highly contagious diseases.
China Association of Automobile Manufacturers (CAAM) released the industry statistics of the first half of May, indicating that production and sales volume at 11 key automobile manufacturing enterprises in China within the period amounted to 429,000 units and 351,000 units, respectively. The sales figure saw a year-on-year decline, falling 13.9% as compared to the same period last year as affected by the virus outbreak.
For PS pricing, the trader initiated a price reduction of between CNY200-300/ton ($28-42/ton) on a week-on-week comparison for both local GPPS Injection and HIPS Injection cargoes. SSESSMENTS.COM noted that the softer SM prices and sour downstream demand were main factors pushing the trader to lower their offers.
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