A South Korean producer reported to SSESSMENTS.COM that the company has sold out May allocation for both ABS and HIPS cargoes to the China market. Therefore, the producer will start offering for June shipment. Regarding the sales for May, the producer revealed that the sales for ABS Injection were better than HIPS Injection. While for June shipment, the producer will likely keep the offers stable from May shipment due to the absence of inventory pressure from their end.
Recently, the producer visited downstream factories and observed that sales for finished products are not that robust; sales for washing machine and refrigerator are slightly picking up but the sales for the air conditioner is sluggish due to lack of manpower to do the installations. In contrast, the sales for home printers are quite strong lately since most people are working and studying from home amid the Coronavirus pandemic. As such, orders from domestic and export markets improved significantly, SSESSMENTS.COM was told. However, these days, modified downstream factories are mostly still running for producing meltdown material to make masks, citing that demand for masks remains strong.
At the moment, the producer also talked with SSESSMENTS.COM regarding the reasons behind the unchanged SM supply despite high ABS and PS production in China. Recently, the producer noticed that the ABS and PS operating rate in China is quite high, yet, the SM inventory did not decrease substantially. About this, the producer then explained that the high SM inventory might be caused by two prominent factors. First, some ABS and PS producers have sufficient inventory on hand to cover May production. Second, the chemical gas leaked at LG Polymers India Private Limited (LGPI) which led to slow styrene demand from India, as such, Chinese buyers halt procurement while expecting lower SM prices.
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