China EPS Prices Fell from High After Spring Festival
Preface: China’s EPS market prices made a good beginning after the Spring Festival holiday. However, the negotiation price of EPS saw a downtrend amid the decreased cost, weak supply-demand fundamentals, etc. After that, EPS market prices turned to be range-bound with no effective momentum to break the stalemate.
China’s EPS market prices saw a temporary uptrend in 2023.
China’s EPS market prices moved up constantly at the beginning of 2023, making a good beginning. The EPS market price dropped to a historically low level in Q4, 2022 as it has been moving down since Q3, 2022. Though the EPS market price fluctuated upwards constantly around the holiday, market deals were limited as most participants retreated from the market.
2021-2023 China EPS General Materials Prices Around Spring Festival in East China
However, the recovery of demand was less than expected. In addition, downstream enterprises resisted the high price. Moreover, the cost fell after reaching a high level. Thus, the EPS market price failed to remain high.
The cost was the main driver of the EPS price changes.
As the direct upstream monomer of EPS, the styrene price has a strong impact on the cost of EPS. In the background of the temporary supply and demand mismatch, the mainstream price of EPS moved up backed by the increment in styrene prices in 2021 and 2022. Though the styrene fundamentals underperformed in 2023, the styrene price rose as market players hold bullish sentiments about the market, which gave stronger cost support to the EPS market price.
2021-2023 China Styrene Market Prices Around Spring Festival in Jiangsu
The styrene price fell after reaching a high level after Spring Festival in 2021 and 2022 caused by increased port inventory, tepid demand recovery, and decreased international oil prices, which dragged down the EPS market price. In 2023, the styrene price also saw a downtrend after Spring Festival affected by the supply and demand mismatch and weakening macro atmospheres, which dragged down the EPS price.
EPS market sales were scarce amid soft fundamentals.
EPS supply decreased temporarily as most EPS ran at lower loads or were shut down after Spring Festival. At the same time, most downstream producers cut operating rates or halted production amid scarce deals, dragging down the EPS demand to a low level. The weak demand failed to give strong support to the EPS market price. Market participants showed weak interest in purchasing in bulk, which gave limited support to the EPS price.
The market transactions dipped notably around Spring Festival, leading to an increment in the EPS inventory index. Sales pressure is expected to be eased gradually with the production recovery of downstream enterprises.
The EPS market price is range-bound in the short term.
Demand: The production recovery of the downstream enterprises was slower than expected. In addition, most of them purchased on a need-to basis or consumed previous inventory. Supply: EPS producers resumed production gradually after the holiday, which increased the EPS supply. A couple of EPS producers face higher sales pressure amid soft orders. Cost: the styrene price is range-bound amid the demand recovery, expectations for the port inventory increment, etc., which fails to give stronger support to the EPS market. Thus, the EPS market price is range-bound in the short term amid a stalemate. Moreover, the changes in the international oil price and commodity market should be concerned.
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