Petrotahlil - Import ABS and PS prices in China had been largely tracking a bullish trend since around early May to hit multi-month highs last week. However, as the second half of the year starts, the markets have failed to maintain their upturn as demand has tapered off.
Following the end of the Dragon Boat Festival, trading activities remained thin with buyers staying sidelined, players noted.
“Suppliers have either kept their offers stable or slightly reduced them due to unsupportive demand. Buyers are not in a hurry to replenish this week as they already have sufficient stocks for now,” said a seller.
Cost support appears to have weakened
Spot styrene prices on CFR China basis have been stable so far after slightly falling last week. When compared to early June levels, they are also down marginally. Asian styrene faces pressure from ample supplies in China, traders reported.
CFR China ACN prices, meanwhile, retreated by around $50/ton from last week as new capacities are weighing on the market. Spot prices were standing at an 11-week high last week.
Supply remains limited particularly for ABS
Several players operating in China’s PS and ABS markets believe that prices are not likely to stay in the correction territory for too long as regional supplies remain limited, particularly for ABS.
“We were already expecting prices to see some corrections as ABS in particular had witnessed sharp gains over the past months. However, we don’t think that sellers will be eager to reduce their offers visibly as limited supplies should prop up the market at some point,” commented a few players.
Adding to the tightness is LG Chem’s upcoming maintenance shutdown at its 850,000 tons/year ABS plant in Yeosu, South Korea. The plant will be shut next week.
Gap between ABS and HIPS remains wide
Data from ChemOrbis Price Index suggest that the premium ABS prices carry over HIPS has remained wide at $350/ton, which indicates the largest gap since August 2018. In early April, the premium was reported at $150/ton.
Since the upturn for both products kicked off in early May, the pace of gains in PS prices has lagged behind the increases that ABS sees.
According to data, the weekly average of ABS injection prices on CFR China basis reached an eight-month high last week following two consecutive months of gains. Meanwhile, GPPS and HIPS injection prices on similar terms hit more than a three-month high only.
Source : ChemOrbis