For the Quarter Ending June 2021
During the second quarter of 2021, EPS supplies in the North American region saw some recovery after remaining dented for a larger part of Q1 due to the impact of polar winter storm Uri. Several Styrene manufacturing facilities ramped up the production and ensured ample availability of the feedstock. Amidst increasing demand, several EPS producers were seen investing in EPS foam recycling. For e.g., towards the end of June, Canada’s NexKemia announced partnership with Eco-Captation and the township of Potton towards facilitating recycling of Expanded and Extruded Polystyrene foam. Demand stood upbeat from the building and construction sector due to increased investment in the residential remodelling and construction in Canada and USA. In terms of pricing, high feedstock costs, along with dented supply and demand dynamics, necessitated positive correction in prices for several US Expandable Polystyrene producers. expanded polystyrene (by 77%). The increase in the prime cost of construction materials has reached 95% since January.
EPS supplies were seriously pressured for a larger part of Q2 owing to turnaround at several feedstock Styrene facilities in China in May and June. However, the commissioning of some new facilities towards the end of the Q2 eased the supply conditions in China. The unprecedented surge in the COVID cases in India restricted the industrial and commercial activities which impacted the market outlook in the second quarter of 2021. Spot availability remained affected due to feedstock related constraints which forced manufacturers to raise the regional offers. The pricing trend in India showed fluctuations in the narrow range with Ex-Works Mumbai offers trading at USD 1502 per tonne in June.
EPS supplies in the second quarter showed QoQ improvement extending combined impact of improved operational rates in production facilities and better quantity of the imports from the US. Better availability of upstream Styrene eased the production at the manufacturing plants although pricing trend was buoyed by persistent shortage in the regional availability. Demand peaked from the downstream building and construction sector due to economic rebound. In mid-June, Netherlands-based PolyStyreneLoop co-operative commissioned its 3.3 KTPA Expanded Polystyrene (EPS) recycling plant in Terneuzen, the Netherlands, to facilitate closed-loop recycling of the EPS waste.
For the Quarter Ending March 2021
During the first quarter of 2021, the American Expanded Polystyrene market was largely influenced by the dented supply dynamics as upstream styrene supplies remained tight, as the several producing belts remained shut due to extreme freeze weather conditions in the US gulf region in mid-February. However, the demand surged as the utilization improved from the downstream packaging and construction sector. Offtakes took a major hit as disposable food service provided much needed support for PS demand. In terms of pricing, raw material pricing took a major toll on both Polystyrene and EPS producers across the region.
EPS supplies in the Asian region improved as many production facilities were heard operating at maximum efficiencies after prolonged turnaround period so as to cater to sharp recovery in the demand with economic rebound. However, the demand remained largely driven by the offtakes from the packaging sector. Increased prices of upstream Styrene proportionally surged the prices of Expanded Polystyrene in the Asian Markets. The prices of Expanded Polystyrene in China during March were averaged around USD 1613/ton. Sensing sharp uptick in the demand of polystyrene and expandable polystyrene (EPS) segments, an Indian manufacturer revealed its capacity expansion plant in the coming quarters.
The supplies were tight during the Q1 2021 in European region, due to the shortage of feedstock, as the several major plants declared force majeure in February amid freeze weather in the Northwest European region. However, the demand witnessed mixed results as the second wave of COVID caused the lockdown in major economies across the region resulting in restricted mobility and commercial activities, followed by the improved consumption from the packaging sector.
For the Quarter Ending September 2020
China’s export EPS supply was tightened after a short-term shutdown was announce at a manufacturing unit in South China, Domestic supply in China was also on the tighter end due to permanent closures of some plants in East China. However, supply levels in other Asian countries remained stable due to unchanged manufacturing activities. Increased construction activities in Japan, Malaysia and Indonesia were indicative of pent-up demand for the product which is expected to march higher moving into Q4. Also, the much-awaited revival of automotive industry, triggered an upsurge in the demand across the Indian and Chinese markets. Buying interest in Malaysia was relatively strong on some recovery observed in the construction sector. In India, FOB price of Expanded Polystyrene was averaged around USD 1350 per tonne during the third quarter, resisting any further upward movement since Q2 2020.
With one producer facing production issue, supplies started to tighten towards the end of Q3, thereby hampering regional availability. Apart from that, availability of EPS in North America remained sufficient to meet the market needs. Demand picked up in Q3, sufficient to pull over the supply side. Owning to long delivery time, interest in imports thinned during the quarter. On spec demand showed a sharp recovery to pre-covid levels in Q3 due to ease in Covid-related restrictions on economic activity. Strong growth seen in the residential construction, majorly in the sub urban areas and from food packaging sector helped producers in fetching marked gains.
Maintenance of high stocks and ample inventories kept the EPS supply relatively balance throughout the third quarter, when demand was showing gradual improvement. However, for a relatively short span, supply tightness was observed in August due to lower output levels maintained during majority of Q2. Also, import volumes dropped much lower than usual with pricing largely non-competitive. Regional traders observed stronger demand from white goods packaging, particularly in July and September. However, construction demand remained soft, with the industry still grappling with the pandemic impact amid fears of second wave of infections pressuring the overall activity.