Product Profile: ABS

26 January 2004 01:00  [Source: ICB]

 
Europe is suffering from global overcapacity, non-existent margins and slow demand. Prices must go up in 2004 to bring some relief
Uses

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.

Supply/demand

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.

Pricing

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.

Technology

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.

Health and safety

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.

Outlook

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.

Major global ABS capacity*, '000 tonne/year
Company Location Capacity
BASF Altamira, Mexico 130
Ludwigshafen, Germany 80
Ulsan, South Korea 250
Bayer Addyston, Ohio, US 160
Baroda, India 45
Camaçari, Brazil 4
Dormagen, Germany 230
Mab Ta Phut, Thailand 110
Tarragona, Spain 130
Cheil Industries Yosu, South Korea 330
Chi Mei Jen-Te, Taiwan 1000
Dow Chemical Allyn’s Point,
Connecticut, US 30
Hanging Rock, Ohio, US 64
Midland, Michigan, US 88
Terneuzen, Netherlands 200
Formosa Chemicals & Fibre Chia-yi, Taiwan 240
GE Plastics Amsterdam, Netherlands 70
Bay St Louis,
Mississippi, US 125
Grangemouth, UK 60
Ottawa, Illinois, US 215
Villers-St-Sepulcre, France 70
West Virginia, US 75
Korea Kumho Petrochemical Ulsan, South Korea 200
LG Chem Yosu, South Korea 500
Polimeri Europa Mantova, Italy 30
Ravenna, Italy 50
Techno Polymer Yokkaichi, Japan 330
Thai ABS Rayong, Thailand 100
Toray Industries Ichihara, Japan 70
Prai, Malaysai 220
UMG ABS Otake, Japan 65
Ube, Japan 110
SOURCE: ECN/CNI






AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly