Demand for polystyrene foam plastics (EPS) in Asia will remain weak in the near future, as China, a key market, stagnates seasonally with sufficient supply.
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But because of production losses, regional producers have pushed up prices. Since the end of January, the difference between EPS and styrene monomers has been below the break-even point of $180 per ton.
According to ICIS data, spot EPS prices in China rose further on March 15 compared with last week, with CFR quoting $1,250-1,260 per ton.
Due to the seasonal stagnation of downstream construction industry, China’s demand is particularly tepid, which may keep EPS production at a low level in the coming weeks.
Demand in Southeast Asia is relatively good, and Asian suppliers prefer to sell in the region.
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At present, the inventory level of Chinese terminal customers is good, and the EPS supply in the Chinese market is sufficient to meet the demand. It is reported that the operating rate of Chinese manufacturers is about 70%.
ICIS data showed that the EPS premium to styrene monomers fell to a new low of $160 per ton in the week ending March 8, and Asian manufacturers kept operating interest rates low to curb losses.
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