In the second week of April 2025, the Expanded Polystyrene (EPS) market in China saw significant growth in prices. This was because of the adjustments made in quotes by several manufacturers to cope up with the changing market dynamics. Companies such as Loyal Group, Kingfa Sci & Tech Co., and Wuxi Xingda Group have announced growth of about 2.5–3% in prices. 

Market observers at ChemAnalyst see this as an attempt by these companies to stabilize margins amid rising demand and controlled EPS supply levels.

This increase happened after a brief stability in prices, during which EPS prices did not change. This was due to high inventories levels held by downstream companies and traders and reduced domestic demand. In the previous month, the EPS market was average as both packaging and automobile industries showed only moderate usage. Moreover, feedstock styrene prices got reduced due to increased supply and decreased upstream benzene costs. So, EPS manufacturers had to be cautious with their production strategies throughout the month.

By this month however, however, market conditions started to change. EPS manufacturers in major regions like Shandong and Jiangsu did not increase their production rates, in a move to reduce the inventory levels in the market. With growth in downstream demand, especially from the packaging industry, manufacturers viewed this as an opportunity to moderately increase their prices without facing any opposition from buyers.

The sector played a major role in this market development. After the Lunar New Year slowdown, business activities in the e-Commerce and food delivery segments got increased, leading to the growth in EPS demand. Though some packaging companies appeared to be continuing their EPS purchases cautiously, the consistency in orders made by large logistics players helped in reviving some confidence in the EPS market.

Meanwhile, the growth of the automobile industry was quite impressive in March, with the total sales of passenger vehicles increasing by over 14% year-on-year. In addition, rise in the sale of electric vehicle sales further boosted the production output in the sector. However, this growth did not directly lead to the increase in EPS usage, as inventory levels within the insulation and component segments remained high, reducing the impact on demand.

Overall, the recent price growth shows that the optimism in the EPS market is increasing. Market players will be closely watching to see if this trend continues, or further adjustments are needed to match the pace of demand recovery.