Market Analysis for EPS

SM inventory is very tight. Price kept increasing.
SM increased very sharply. Since some SM suppliers shut down their lines, cargoes are very tight. It leads to SM’s crazy increasing. Today, cargoes that will be shipped in October were dealt at $1670/mt CFR China and for November shipment, cargoes were dealt at the price of $1590/mt CFR China. SM users purchased a lot of spot cargoes because their long-term contract cargoes are not enough. On the other hand, market risk is pretty high, current price is peak price of recent 3 years.
It is hot season of EPS. EPS suppliers could not operate 100% since SM is not enough. Price increased day by day. Last week EPS suppliers purchased more than 10,000mt spot SM, it pushed SM price to higher. SM and EPS support each other and push market to very high level. Almost all EPS suppliers had no inventory, shipment is arranged full till November. November would be cold season of EPS since north China would be very cold. But now it still is crazy season.
EPS suppliers have to give higher price since SM increased so much. They would like to sell in domestic market and margin is much more than selling to overseas market. Operating rate is about 70-80%.
First class EPS suppliers offered at $1830-1850/mt FOB level which increased by $50-60/mt. In domestic side, price is about RMB 13,900-14,000/mt EXW for packaging EPS and RMB14,500-14,600/mt EXW for block flame retardant (FR) resins, which increased by RMB100/mt.
Forecast: EPS price would be strong in the near future.