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Global Expanded Polystyrene Prices Witness Decline Trend with Shifting Market Dynamics
Global Expanded Polystyrene Prices Witness Decline Trend with Shifting Market Dynamics

Global Expanded Polystyrene Prices Witness Decline Trend with Shifting Market Dynamics

  • 06-Dec-2023 4:03 PM
  • Journalist: Gabreilla Figueroa

FD Rotterdam: The European and US Expanded Polystyrene (EPS) markets are undergoing shifts marked by declining prices. Despite consistent demand for EPS in sectors like Automotive and Construction insulation, subdued interest from packaging industries and abundant inventories have created cautious sentiments. The European EPS market, facing weakened feedstock Styrene fundamentals and lower energy prices, witnessed suppliers implementing discounts to clear inventories. Similarly, the US EPS market attributes its decline to meet customer needs, weaker demand in derivative sectors, and corrections in overvalued prices. Both markets experience sluggish trade activities, with suppliers adapting to market dynamics through strategic pricing adjustments amidst weak buyer interest.

The European EPS market witnessed a shift as the EPS prices continuously experienced a decline. Despite consistent demand from the Automotive and construction insulation sector, the market faced sustained subdued interest from the packaging industries, instilling a cautious sentiment. Further, Abundant inventories among end-users took center stage, supported by ample supply from the supplies. However, the market has also been saturated after moderate trading activity, and buyers are showcasing weak interest in the procurement activity, resulting in sluggish trade activities throughout the past few weeks. The persistent weakness in feedstock Styrene fundamentals and lower energy prices impacting the overall production cost led suppliers to discount the old stocks to clear them faster and book their profit margin at the initial stage instead of booking loss.

Similarly, The US EPS market has shifted gears towards a declining pattern. This adjustment is attributed to market dynamics where customer needs have been met, leading to a continuous fall in the EPS market value. Furthermore, a slight weakness in the demand for EPS from derivative sectors like packaging and construction insulation further contributes to this price decline. This change in market dynamics has resulted from a weaker buying appetite from the buyers; market players specified that the product's price was overvalued, with its correction in the price remarked within the week by the sellers to sell their products and cut their profit margin at an initial stage. Furthermore, weakness in the major feedstock styrene and upstream crude oil price has also contributed to this declining trend, with its pricing lowering overall production cost. Exchanges stayed testing as buying exercises stayed at their lower hand, with weak offering bids adding to edge compression. Furthermore, product procurement was done on a need-to-have basis.

The ChemAnalyst forecasts a declining trend in the EPS markets in the coming weeks. The persistent challenges include subdued interest from the packaging industries, abundant inventories, and weakened demand from derivative sectors. Suppliers are expected to sustain discounts to clear excess stocks amid sluggish trade activities. The decline is further fueled by ongoing weaknesses in feedstock Styrene fundamentals and lower energy prices, prompting strategic pricing adjustments. Buyers' weak procurement interest and corrections in overvalued prices contribute to the prevailing cautious sentiment, indicating a challenging period ahead for EPS markets.

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