Supply Condition To Provide Cushion For PS Pricing Outlook In China Market
- A local producer applied a distinct pricing strategy
- Demand in the domestic market is slowing down
- Players voice out positive pricing outlook buoyed by the supply condition
Market players expressed an opinion to SSESSMENTS.COM that the supply condition in China market will provide cushion for PS pricing outlook. For the week commencing July 6, the local offers for GPPS Injection and HIPS Injection were generally kept stable on a weekly comparison. However, a local producer decided to increase their local offers for GPPS Injection and HIPS Injection by CNY200/ton ($29/ton) from last week citing limited allocation. From the import market, sources revealed that Iranian GPPS Injection cargoes are being sold to the China market at $890-900/ton on LC at sight, CIF China Main Port basis. For HIPS Injection, a Chinese trader is offering import HIPS Injection cargoes from Saudi, which is stable on a weekly comparison at $970/ton on the same payment and delivery terms.
Coming to this week, market players mentioned to SSESSMENTS.COM that PS demand is gradually shrinking after the shopping festival in line with the traditional pattern. Most home appliances manufacturers have reduced their purchases for PS resins following the drop in orders from end-users. Market sources with knowledge of the matter informed that the planned output for air conditioners in July is estimated to decrease by 3.57% from June. However, on year on year comparison, the number of output increased by 30.65% owing to the delayed productions due to the coronavirus pandemic. On the supply side, as of July 9, SM inventory in coastal China recorded at 317,500 tons, a reduction of 3,900 tons from last week. While the inventory at the traders’ end decreased by 5,900 tons, stood at 214,000 tons. Further added, sources informed that shipment of cargoes from a South Korean PS producer is still pending since the producer has oversold a lot of allocations at the beginning of June.
Pertaining to the outlook, the majority of Chinese market players opined that the relatively tight supply in the market will provide support for local PS prices, as such, the possibility for the prices to move lower is thin. However, demand is predicted to remain flat as buyers are still cautious about the market movement, SSESSMENTS.COM was told.
