13 March 2006 15:49 [Source: ICIS news]
LONDON (ICIS news)--European acrylonitrile butadiene styrene (ABS) producers will be targeting price increases on March contracts of up to Euro50/tonne across all segments in an attempt to regain margins lost in February, suppliers said on Monday.
Strong demand from the beginning of 2006 has helped producers sell more material to the higher-margin injection moulding segment, and to focus less on the lower-priced compounding grade segment, where ABS is mostly sold at discounts.
This has shortened compounding material supply and subsequently raised prices to Euro1,230-1,290/tonne free delivered (FD) Northwest Europe (NWE) through February, up Euro30-40/tonne on January.
This lowered the differential between the lower prices of compounding grade and injection moulding material to around Euro70/tonne.
High NWE prices for Asian injection moulding material at 1,420-1,500/tonne FD NWE for natural ABS, or around Euro120/tonne more expensive than the cheapest European values of Euro1,300-1,450/tonne FD NWE, has supported European producers’ push for increments.
Additionally, Dow announced on 3 March that it would be seeking a Euro100/tonne Q2 ABS price rise from 15 March, a target which was also heard by another supplier with quarterly contracts.
However, buyers of natural ABS have so far had a bargaining advantage in their ability to switch easily between suppliers, which has limited rises in ABS.
Furthermore, distributors of Asian material said they would negotiate for lower prices to help their suppliers' competitiveness. Some hoped to be able to lower their sales prices of natural material to around Euro1,350/tonne FD NWE, as some ground had been lost to European producers over the recent month.
European producers said they were determined to achieve targets, but much of their success would depend on the European price development of Asian ABS.
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