[Ps Weekly Review] Strong Cost Support, Market Continues Significant Uptrend

I. Key Issues to Watch This Week

This week, the domestic PS market continued to surge significantly, with price increases ranging from RMB 1,300 to 2,300 per ton, primarily driven by the continuous rise in feedstock styrene prices. In terms of production, China’s PS industry output for the week totaled 84,800 tons, an increase of 300 tons compared to the previous period; industry capacity utilization stood at 51.7%, up 0.2 percentage points week-on-week. Regarding inventory, China’s PS finished-goods inventory stood at 83,000 tons this week, down 14,000 tons from the previous period, representing a 14.4% sequential decline.

II. Market Review for This Week

Domestic PS prices surged significantly this period, primarily driven by rising styrene feedstock costs. On the cost side, the domestic stylene market strengthened notably, supported by rising crude oil prices. Although styrene prices experienced some pullbacks in line with crude oil fluctuations, overall fundamentals remained robust, bolstering bullish market sentiment and providing strong cost support. On the supply-demand front, capacity expansions in Shantou and Foshan offset minor production cuts in Fujian and Shandong, resulting in relatively stable overall industry supply. Market transactions remained healthy, with downstream buyers accelerating their offtake and inventories continuing to decline. Specifically, on March 12, general-purpose polystyrene (GPPS) prices in East China rose by RMB 1,300/ton to RMB 10,400/ton, while high-impact polystyrene (HIPS) prices increased by RMB 2,300/ton to RMB 12,000/ton.

III. Market Forecast for Next Week

PS market is expected to maintain a strong trend next week. Regarding the cost side, the expectation of inventory reduction of pure benzene supports the price increase. The fundamentals of styrene remain stable, and the overall cost side is well supported. In terms of supply and demand, the production adjustment rhythm of the industry has slowed down, and the supply fluctuations are expected to be limited. Downstream enterprises continue to resume production and operation, and the pickup of downstream orders remains acceptable, so inventories are expected to continue to decline. Overall, the short-term PS market is expected to maintain a strong trend. It is estimated that the price range of GPPS in the East China market will be between 10,000-11,000 yuan/ton.