26 January 2004 01:00 [Source: ICB]
Acrylonitrile-butadiene styrene (ABS) is the largest-volume engineering resin. It’s biggest outlet is in the automotive industry, followed by the electronics sector. Other applications include domestic appliances, pipes, fittings and other products used in the construction industry, and recreational goods such as boats and mobile homes. ABS is also used in polymer blends, notably with polycarbonate, for injection moulding applications.
Europe had a disappointing year in 2003. Demand growth is expected to show a small decline on the previous year, while US demand is expected to have dropped by 6-8%. European producers say the market has been more stable in recent months, but prices have come under pressure from commoditisation and rising raw material costs. Asian markets picked up mid-2003 and remain firm with healthy demand and snug supply.
Producers in Europe and the US are now focusing on commodity grade material (black or uncoloured ABS) instead of pre-coloured product as a result of import pressure from Asia, which treats ABS as a commodity. BASF’s new 200 000 tonne/year commodity grade plant in Antwerp, Belgium, is due to start up in mid-2004. However, some players caution that not all customers will move over to commodity grades and there will still be demand for value-added product.
Bayer has separated its chemicals business, including ABS, into a new, unnamed company that it plans to float or offer to shareholders by 2005.
Prices are being hit by high feedstock costs which producers have been unable to pass on. The shift to commoditisation and fight for market share has also kept prices down. Margins deteriorated in 2003 and producers say they will be seeking a price increase in quarter one following the €61.5/tonne hike in styrene costs. ABS spot prices in Europe have stayed fairly stable since September and are currently in the range €1250-1500/tonne FD.
ABS is made by the polymerisation of styrene with acrylonitrile and butadiene. Three main processes are used: emulsion polymerisation (the oldest and least clean), suspension (blending high rubber content medium with styrene-acrylonitrile), and continuous mass polymerisation (clean and cost-effective, but lacks flexibility).
The continuous mass process is the preferred route because the reaction does not take place in the aqueous phase resulting in less effluent disposal and lower energy needs. With its improved technology, the process can produce resins with enhanced colour consistency, making painting unnecessary in certain applications. However, the emulsion process provides more flexibility in its product range than the mass process and is used to produce high impact grades.
ABS occurs as solid pellets with essentially no odour. Grinder dust is an explosion hazard. ABS burns slowly producing dense black smoke that contains carbon monoxide and hydrogen cyanide. Vapours during processing can irritate the eyes, nose and throat.
Demand growth in Europe is rated at about 2-3%/year. World growth is put at 4-5%/year driven by rising consumption in Asia – mainly China, where growth is forecast at a minimum 8%/year. The global market is still oversupplied, but some of the excess could be absorbed by China in the coming years. However, several new projects are planned in China for 2004-05. Players expect that poor profitability will drive more consolidation in the next couple of years.
|Ulsan, South Korea||250|
|Bayer||Addyston, Ohio, US||160|
|Mab Ta Phut, Thailand||110|
|Cheil Industries||Yosu, South Korea||330|
|Chi Mei||Jen-Te, Taiwan||1000|
|Dow Chemical||Allyn’s Point,|
|Hanging Rock, Ohio, US||64|
|Midland, Michigan, US||88|
|Formosa Chemicals & Fibre||Chia-yi, Taiwan||240|
|GE Plastics||Amsterdam, Netherlands||70|
|Bay St Louis,|
|Ottawa, Illinois, US||215|
|West Virginia, US||75|
|Korea Kumho Petrochemical||Ulsan, South Korea||200|
|LG Chem||Yosu, South Korea||500|
|Polimeri Europa||Mantova, Italy||30|
|Techno Polymer||Yokkaichi, Japan||330|
|Thai ABS||Rayong, Thailand||100|
|Toray Industries||Ichihara, Japan||70|
|UMG ABS||Otake, Japan||65|
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