EPS Price Kept Rising while Profit Declined Slightly
Although the EPS price kept rising supported by the cost, the co-movement weakened, and the overall gross profit declined slightly.
After the Spring Festival, the overall EPS price showed an uptrend. It fluctuated within the range of RMB 10,400-10,800/mt in East China in February, while the profit declined slightly.
As seen from the table above, the co-movement between the styrene and EPS was around 0.95-0.98 from 2021 to January 2022, while it declined to 0.77 in February 2022.
At the same time, the price spread between EPS and styrene was RMB 1,634/mt in 2021, while it declined to RMB 1,549/mt in January 2022 and further dropped to RMB 1,535/mt in February. Therefore, although the EPS price followed the trend of cost, the changes were still affected by the supply and demand.
In February 2022, the EPS price fluctuated upwards, following the trend of styrene price, but both the supply and demand declined notably affected by the Spring Festival holiday. After the holiday, EPS producers resumed production, while downstream enterprises resumed production slowly, leading to the imbalanced supply and demand increases. The sales were slow and the price increment was limited.
In March, the EPS demand will keep improving, and the downstream consumption will increase. With the weather getting warmer, the demand from the northern plate market will start to recover.
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