[PS Weekly Review] Raw Materials Continue to Weaken, Market Lowers Prices to Reduce Inventory and Shift Focus Downward

This Week's Hot Topics

Spot market: Domestic PS continued its downward trend throughout the week, with mainstream grades falling by RMB 350–600/ton. Weaker feedstock prices, coupled with producers offering discounts to reduce inventories, were the main drivers behind the decline.

Production side: Domestic weekly total PS output was 80,000 tons, up 1,200 tons month-on-month; industry capacity utilization was 48.1%, up 0.8 percentage points month-on-month, indicating a slight overall increase in supply.

Inventory: As of June 4, domestic PS finished goods inventory stood at 82,000 tonnes, down 1,000 tonnes or 1.2% from the previous period, as factory price cuts boosted shipments and led to a slight inventory drawdown.

II. Review of This Week’s Market Performance

During this period (May 29 to June 4, 2026), the domestic PS market continued its weak downward trend. Throughout the week, price spreads between GPPS and HIPS diverged, with overall declines ranging from RMB 350 to 600/ton. On the cost side, styrene, the key feedstock, fluctuated at low levels during the week due to disturbances from crude oil volatility and changes in port inventories, resulting in persistently weak cost support and dragging down PS quotations from the upstream side.

On the supply side, plant maintenance and production resumptions are proceeding simultaneously. Multiple PS units in Lianyungang, Changshu, and Shantou have gradually restarted and resumed feed input, while some units in Ningbo and Zhoushan have temporarily reduced operating rates and cut output. After offsetting capacity increases and reductions, overall industry supply has seen a slight increase. Producers are mainly relying on price cuts and promotions to accelerate inventory destocking, but the overall pace of destocking remains slow, with only those manufacturers that had previously shut down or reduced output seeing a notable decline in inventories.

In the spot market, the East China market led the nationwide decline. Over the weekend, general-purpose polystyrene was quoted at RMB 9,750/ton, down RMB 350/ton week on week. Impact-resistant polystyrene fell even more sharply, closing at RMB 10,900/ton at the end of the week, down RMB 600/ton in total. Downstream end users purchased on an as-needed basis, with limited follow-through demand. Actual market transactions were mostly small, just-in-time orders, and bulk restocking was rarely seen.

III. Market Forecast for Next Week

Considering feedstock factors and supply-demand fundamentals, the domestic PS market is expected to remain in a narrow, slightly weaker consolidation trend next week. Downside room for prices is limited, but there is insufficient momentum for a rebound.

Cost side: The port inventory destocking rate of styrene is gradually slowing down, and there are few substantial benefits on the supply and demand side. The market is likely to continue running weakly, which will continuously suppress the cost floor of PS.

Supply and demand: The subsequent resumption pace of industry facilities will continue, and overall cargo supply will continue to edge higher slightly; downstream has entered the demand off-season, operating rates at product manufacturers are declining, and end-user purchasing willingness continues to weaken, making it difficult for the demand side to provide any support.

Weaker costs, coupled with a slight increase in supply and continued weakening demand, are creating a confluence of factors. In the short term, PS spot prices are more likely to fall than rise, and the futures market is expected to fluctuate within a narrow range at low levels.

Focus on key points.

Feedstock side: changes in styrene port inventories and cost guidance from crude oil fluctuations;

Supply side: Changes in start-up and shutdown operations of plants in various regions, shipment volumes and pricing adjustment strategies of petrochemical producers.

Demand side: Operating rates in downstream home appliance and daily consumer goods industries, as well as the actual purchasing pace.