Sources: China PS Prices Set For Limited Fluctuations
- China's domestic PS prices moving in different directions
- Market sentiment turned more bearish
- Tightness in supply has been eased
China’s domestic and import PS prices are expected to only fluctuate within a limited range, sources voiced out to SSESSMENTS.COM. The downtrend in monomer prices and maintenance turnaround plan had led to a mixture of price directions so far for local PS prices in China market. Upstream, styrene monomer (SM) prices have dropped between CNY30-40/ton ($4-5/ton), extending their losses from the previous week as demand continues to weaken. As SM prices remain under pressure, the pricing undertone in Chinese PS market turned bearish this week, with local GPPS Injection and HIPS Injection prices dropping around CNY50/ton ($7/ton). Despite a wave of price cuts in the market, one of the Chinese producers quoted higher offers to the domestic market this week on the back of zero sales pressure, coupled with upcoming maintenance shutdown at another local producer’s PS plant. The producer increased local offers for both GPPS Injection and HIPS Injection cargoes by CNY200/ton ($28/ton). From the import market, a South Korean producer applied a price reduction of $10/ton for HIPS Injection cargoes, available between $1,040-1,050/ton on LC at sight, CIF China Main Port basis. Previously, the producer received overwhelming requests for these grades from customers in China. However, the producer said that buyers appeared to have moved to the sidelines as most were reluctant to purchase the materials at a higher level this week. All price changes on a weekly comparison.
A slowdown in the growth of trade is drying up demand for PS resins. Sources in China mentioned that demand weakened further compared to last month as the majority of buyers in China continue to source materials on a hand-to-mouth basis. Besides, general downbeat sentiment has overtaken the market as trading volumes dwindled due to strong buyers’ resistance toward higher offers. Nevertheless, fundamental demand is still existing in China’s PS market, lending support to the market from a free-fall. On the supply side, SSESSMENTS.COM was informed that the tightness in supply has been eased, accompanied by softening demand from medium-to-small-scale converters. Meanwhile, overall demand from big-scale converters remains healthy. However, heavy rains in several parts of China have caused severe floods, which could disrupt the supply chain. As of July 24, SM inventory in coastal China recorded at 301,000 tons, posting a reduction of 6,800 tons as compared to last week. From the traders’ end, the inventory level declined by 7,300 tons as compared to the same period, recorded at 198,000 tons.
For the outlook, market sources in China contacted by SSESSMENTS.COM expect PS prices to see limited fluctuations amid expectations of demand and supply to stabilize at best in the near term. Besides, some sources hope European and US authorities will take some actions to maintain crude oil prices to remain firm amid the continued bearish global sentiment; hence, may prevent PS prices from falling further.
