Quarterly Update on Global Polystyrene (PS) Market
For the Quarter Ending June 2021
Overall, the North American market observed a steep increment in the Polystyrene pricing trend at the starting of the second quarter, then continued the upward trajectory at a slow pace. Supply conditions improved in Q2 2021, as compared to the previous quarter owing to resumption in production at several operating rates and ample availability of the upstream Styrene. The demand outlook observed a robust growth owing to multiple factors such as strong enquiries from the building and construction sector and constant offtakes from the packaging and consumer goods sector. Due to the upcoming hurricane season in the next quarter, market sentiments to procure large Polystyrene orders were high amidst growing competitiveness among the buyers. As a ripple effect, the FAS Houston pricing discussion of Polystyrene HIPS grade settled at USD 3100 per tonne in June.
Polystyrene market outlook in the APAC region showcased mixed sentiments during the second quarter of 2021. In India, the Polystyrene demand outlook remained subdued amidst restricted industrial and commercial activities due to the second COVID wave across the country. As a repercussion, offtakes were curtailed even though several traders were trying to control the pricing trend through regulating supplies. Whereas, in China commission of new upstream Styrene monomer facilities kept the supplies lengthened during the second quarter of 2021. In June, FOB Qingdao Polystyrene prices were assessed around $2390 per tonne. However, some hinderance was witnessed in the consuming sectors as the power outage and rising COVID cases limits the industrial and trading activity in South China’s Guangdong province.
During the second quarter of 2021, Polystyrene supplies improved compared to the previous quarter owing to ample availability of the upstream Styrene monomer and improved operating rates in the production facilities. Demand outlook remained upbeat throughout the quarter amid buyers actively seeking to replenish inventories to cater to strong industrial rebound. Market players observed seasonal hike in demand from the building and construction sector, however, offtakes were muted from other end consumers.
For the Quarter Ending March 2021
During the first quarter of 2021, the supplies of Polystyrene were tight, as several Styrene monomer plants went for maintenance turnarounds during the H1 of Q1, followed by the production disruptions caused due to extremely freeze weather conditions in the US gulf region resulting in plant outages in mid-February. However, the demand surged as the utilization improved from the downstream automotive sector and construction sector. Demand for Expanded Polystyrene (EPS) from food packaging applications kept the sentiments raised although persistent feedstock tightness raised Polystyrene contractual offers.
The supplies in Asian region improved as compared to last quarter, as major production facilities boosted the efficiency rates, as they returned from the prolonged turnaround period in the region. However, in early February, amid the earthquake in Japan some plants were forced to halt their productions which put constraints in the feedstock styrene supplies. The demand surged as the consumption improved due to the rebound of automotive sector. The inflation in upstream products consequently surged the prices of Polystyrene in the Asian markets. The quarterly average of the General-Purpose PS (GPPS), moulding grade in the Indian market was estimated to be around USD 1789/ton.
The European PS supplies were tight during the first quarter, as the availability of feedstock remained constrained due to major styrene producing plants in the region declared force majeure in early February. 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 slowly improving automotive sector. The demand for packaging materials however, remained high throughout the quarter.
For the Quarter Ending September 2020
Asian Polystyrene players have reported healthy margins due to restocking activities by downstream packaging and disposable sectors while some countries prepare themselves for the upcoming festive season. However, some plant turnarounds which are expected in South Korea and Malaysia by the end of the October month may impact the supply chains. While the market still seems susceptible to fluctuations in the upstream Styrene values, Southeast Asian activity head towards improvement as some regional importers increase their run rates.
The Q3 results of the European Polystyrene remained satisfactory in anticipations that demand from the construction sector would gain focus in the upcoming months as the region bounces back from the COVID led disruptions. Steady demand for PS grades used for food packaging and medical applications will continue to widen the product margins. The quarter ended with AmSty, INEOS Styrolution and Trinseo signing a Joint Development Agreement (JDA) to ensure the circularity of Polystyrene through the first-of-its-kind Polystyrene recycling plant in France to widen the product scope.
The third quarter proved to be muted for the North American Polystyrene industry. While demand from the medical and packaging sector remained resilient, the demand from larger segments, such as appliances, automotive and construction, are yet to show significant improvement due to high unemployment rates and hovering uncertainty in the economic growth. Polystyrene players maintained their run rates around 70-75% to grapple with the softening margins.