The Chinese Finance Ministry has announced that its incentives program for energy-efficient electrical appliances which had been put in place on 1 June 2012 in order to boost domestic demand was terminated on 1 June 2013. The program offered incentives ranging from 100 to 400 CNY/t (16-65 USD/t) on five categories of energy-efficient appliances: air conditioners, flat-screen televisions, refrigerators, washing machines and water heaters. Given reductions in prices for these products over the past year, the goals of the incentives program appear to have been reached.
The market research firm Chemorbis gathered comments from operators in the polystyrene supply chain. A producer of grade-B PS reported, "We have lowered our prices because a number of converters in the home appliance sector began to use less when the incentives program ended. Furthermore, the low season normally begins in the second half of June."
On the other hand, a trader in Shanghai stated, "We do not expect the end of the incentives program to have an immediate effect on the market. However, in the long term it will undermine already weak demand. We are thus trying to concentrate on short-term business."
Meanwhile, a converter commented, "We have acquired limited quantities because June is considered to be the low season and the incentives program has ended."
A PS and ABS distributor said that the announcement of the end of the incentives program has already begun to have an effect on market sentiment: "Many players believe that demand for derivatives will be weaker in upcoming months with respect to the situation last year."