- Local PS offers in China broke a new threshold level
- Overall buying sentiment was bearish due to Coronavirus issues
- Local PS prices predicted to decrease further if crude oil prices unable to rebound
Based on data collected by SSESSMENTS.COM’s team, GPPS Injection and HIPS Injection prices in China local market remained stable in January. Sources added that most producers maintained the offers unchanged during January as their allocation for January and February deliveries has been sold out. However, in February, local offers for GPPS Injection broke below CNY9,000/ton-level, while local HIPS Injection offers broke below CNY10,000/ton-level as the number of inquiries and transactions in the market decreased significantly due to growing concern over the Coronavirus outbreak. Throughout March, local GPPS Injection and HIPS Injection offers were captured on a downtrend and the most notable downward adjustment recorded was around CNY100-300/ton ($/ton) on a weekly comparison.
On the week commencing January 13, market sources reported to SSESSMENTS.COM that February shipment offers for HIPS Injection of South Korea origin increased by $10/ton from the previous month and done deals were concluded at $10/ton lower from the initial offer level. While for Malaysian HIPS Injection cargoes, done deals were also concluded at $10/ton lower from the initial offer level in the first week of January. For March shipment, the offers for South Korean HIPS Injection cargoes edged lower by $20/ton compared to February. For April shipment, South Korean HIPS Injection cargoes surfaced with a downward adjustment of $10/ton by the second week of March. Due to the weak sentiment, the offers for South Korean HIPS Injection adjusted further between $10-20/ton on the week ending March 20. Likewise, April shipment offers for GPPS Injection and HIPS Injection of Taiwan origin also trimmed by $40/ton in the third week of March. All adjustments for April shipment were on a weekly comparison. Meanwhile, the offers for import Vietnamese GPPS Injection decreased between $10-20/ton on a weekly comparison. And by the final week of March, customers were submitting bids for Vietnamese GPPS Injection at $120-170/ton lower from the initial offer level, which was rejected by the producer.
According to market sources report to SSESSMENTS.COM, the sudden surge in crude oil prices due to the escalated tension between US and Iran had helped to stimulate the buying sentiment in early January. Sources stated that buyers were triggered to build up stock in anticipation of higher prices and some were in a hurry to purchase due to the ban of heavy vehicles ahead of Lunar New Year holiday. However, the demand was slowing down on the week commencing January 13 due to holiday mood and the eased tension between the US and Iran. In February, PS demand in China showed a mixed performance. In the first half of the month, demand recorded slow as the Coronavirus outbreak worsened. However, the demand slightly improved in the second half of February; a local producer claimed the company managed to sell a big quantity to the domestic market. Although the overall buying sentiment remained weak as market players concerned about how the spread of the coronavirus outside China would affect the global oil demand and to some extent, the global economy will be affected as well.
In March, SSESSMENTS.COM was told that the buyers were keeping the procurement on a hand-to-mouth basis by the first week of the month. However, following the slump in crude oil prices combined with the slow demand for finished products, PS demand in China was slowing down from the second week and buying sentiment weakened as buyers preferred the sideline position due to market uncertainties. Moreover, export orders have declined as the Coronavirus outbreak outside China intensified and the number of deaths increased, especially in Europe and America, which are the main export markets for some Chinese manufacturers.
Pertaining to the outlook, the majority of Chinese market players opined to SSESSMENTS.COM that there is a possibility for PS prices to decrease further if crude oil prices are unable to rebound to $30/ton-level per barrel and SM prices continue to move downward.
Range of local PS transactions in January on cash, EXW China basis (including 13% VAT in CNY term, all equivalent in USD excluding VAT)
| Origin | Product | Transaction Type | Offers (CNY/ton) | Equivalent in USD/ton |
|---|
| China | GPPS Injection | Offer Given | 9,200-9,500 | 1,153-1,190 |
| China | GPPS Injection | Offer Received | 9,300-9,500 | 1,165-1,190 |
| China | HIPS Injection | Offer Given | 9,800-10,500 | 1,228-1,316 |
| China | HIPS Injection | Offer Received | 10,300-10,500 | 1,291-1,316 |
Range of import PS transactions in January on LC at sight, CIF China main port basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| Taiwan | GPPS Injection | Offer Given | 1,050-1,060 |
| Taiwan | GPPS Injection | Sold | 1,050-1,060 |
| Malaysia | HIPS Injection | Offer Given | 1,200 |
| Malaysia | HIPS Injection | Sold | 1,190 |
| Taiwan | HIPS Injection | Offer Given | 1,150-1,160 |
| Taiwan | HIPS Injection | Sold | 1,150-1,160 |
| South Korea | HIPS Injection | Offer Given | 1,170-1,180 |
| South Korea | HIPS Injection | Sold | 1,160-1,170 |
Range of local PS transactions in February on cash, EXW China basis (including 13% VAT in CNY term, all equivalent in USD excluding VAT)
| Origin | Product | Transaction Type | Offers (CNY/ton) | Equivalent on USD/ton |
|---|
| China | GPPS Injection | Offer Given | 8,600-9,000 | 1,078-1,128 |
| China | GPPS Injection | Sold | 8,500-8,800 | 1,065-1,103 |
| China | HIPS Injection | Offer Given | 9,600-10,000 | 1,203-1,253 |
| China | HIPS Injection | Sold | 9,500-10,000 | 1,190-1,253 |
Range of import PS transactions in February on LC at sight, CIF China main port basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| Taiwan | GPPS Injection | Offer Given | 1,040-1,060 |
| Taiwan | GPPS Injection | Sold | 1,040-1,050 |
| Vietnam | GPPS Injection | Sell Idea | 1,040-1,060 |
| Vietnam | GPPS Injection | Sold | 1,030-1,040 |
| South Korea | HIPS Injection | Offer Given | 1,120-1,170 |
| Taiwan | HIPS Injection | Offer Given | 1,140-1,060 |
| Taiwan | HIPS Injection | Sold | 1,140-1,150 |
Range of local PS transactions in March on cash, EXW China basis (including 13% VAT in CNY term, all equivalent in USD excluding VAT)
| Origin | Product | Transaction Type | Offers (CNY/ton) | Equivalent in USD/ton |
|---|
| China | GPPS Injection | Offer Given | 8,000-8,500 | 1,002-1,065 |
| China | GPPS Injection | Sold | 8,500 | 1,065 |
| China | HIPS Injection | Offer Given | 8,600-9,700 | 1,078-1,215 |
| China | HIPS Injection | Sold | 9,200-9,650 | 1,153-1,209 |
Range of import PS transactions in March on LC at sight, CIF China main port basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| Taiwan | GPPS Injection | Offer Given | 980-990 |
| Taiwan | GPPS Injection | Sell Idea | 1,000 |
| Taiwan | GPPS Injection | Sold | 1,030-1,040 |
| Vietnam | GPSS Injection | Offer Given | 970-1,020 |
| Vietnam | GPPS Injection | Bid Received | 1,000 |
| South Korea | HIPS Injection | Offer Given | 970-1,120 |
| Taiwan | HIPS Injection | Offer Given | 1,060-1,070 |
| Taiwan | HIPS Injection | Sell Idea | 1,100-1,120 |
| Taiwan | HIPS Injection | Sold | 1,130-1,140 |
Tags: Asia Pacific,China,English,NEA,Quarterly,Styrenics
Published on April 9, 2020 7:26 PM (GMT+8)
Last Updated on April 9, 2020 7:26 PM (GMT+8)
