Deteriorating crude market causing Expanded Polystyrene (EPS) prices to fluctuate globally

Expanded Polystyrene prices have shown fluctuation around the globe along with the increasing crude prices, feedstock, and demand from the end-use sectors. The EPS prices according to ChemAnalyst data were assessed at $1875/Tonne, FOB Qingdao, China on 25th March. 

Expanded Polystyrene is a white foam plastic material manufactured from Polystyrene, a downstream product of Styrene Monomer. Upstream elements of Styrene Monomer are benzene and ethylene, which are directly proportional to crude oil prices; hence any variation in crude oil prices will affect the EPS prices as well. Asia Pacific region witnessed a slip in the EPS market as the crude oil prices declined recently, resulting in the reduction of Benzene production cost. According to Chinese manufacturers, EPS demand in the domestic market has tumbled down after the implementation of lockdown in the country. Inventories have been sufficient to fulfil the regional requirement, consequently decreasing the EPS prices. One of the major Styrene Monomer production plants, Denka in Japan have resumed its production on 23rd March after a temporary shutdown; as a result, the production rate of styrene will witness a hike, showing its straight effect on the EPS production rate. 

On the other hand, the USA market noticed a hike in the prices of Expanded Polystyrene (EPS) due to a supply-chain imbalance that occurred due to the ongoing war. Automotive, food packaging, electronic insulations sectors are showing strong demand, forcing the manufacturers to increase the production costs. The feed (Styrene) supply from China has come to a halt temporarily as China implemented a zero-covid policy resulting in production and operational rate deduction; hence, EPS prices spiked up in the US market.  

As per Chemanalyst, the prices of Expanded Polystyrene (EPS) will increase in the upcoming weeks due to the constant rise in crude oil prices, affecting the production cost of benzene and ethylene, which are the upstream products of Styrene monomer. As the manufacturers have resumed their production, resulting in fulfilment of demand from the downstream sectors such as construction, automotive, food packaging, so the prices of EPS might fluctuate.