SunSirs: Positive Performance in China Domestic PS Market

On May 5th, the General Plastics Index was 830 points, unchanged from yesterday, a decrease of 29.12% from the highest point in the cycle of 1,171 points (2021-10-14), and an increase of 27.11% from the lowest point of 653 points on April 6th, 2020. (Note: The cycle refers to 2011-12-01 present)

In April, the general plastic industry saw an overall red trend. After the Qingming Festival, the general material consumption market has gradually taken over the pattern of downstream resumption of work in March. At the same time, March and April are also the peak seasons for some plastic products such as polyethylene. Coupled with the release of pre holiday stocking demand during the May Day holiday, multiple consumer side benefits are added to the April rigid demand base. The strengthening of international crude oil at the beginning of the month in the remote upstream injected strong cost support into the general plastic industry. Except for EVA, the general material market has shown a positive trend during the month, boosted by demand and cost.

Fundamentals: The domestic PS market has taken on a positive pattern in the early stage, and the overall market trend in April was on an upward trend. The raw material styrene continues to rise, while the cost of PS supports a high level of growth. During the month, some devices experienced short shutdowns and supply showed a tightening trend. Affected by terminal demand such as home appliance packaging, downstream markets have stable demand, with good transaction atmosphere in East and South China.

Leading factor: Due to the continuous rise in styrene prices, it has boosted the PS raw material end while also compressing the profit margins of producers. In April, some devices underwent short repairs and were followed up. Coupled with the shutdown of many large factories in East and North China last month, domestic production continued to decrease.

There will be a significant restart of styrene plants in May, with an expected increase in supply. The raw material pure benzene market is weak and consolidating. At this stage, the main positive sentiment of PS is weakening, and the post holiday market may experience stagflation and correction.

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