Chemical Profile: ABS

06 March 2006 00:00  [Source: ICB]

USES

Acrylontrile-butadiene-styrene (ABS) is the largest-volume engineering resin. Its biggest use is in the automotive industry, followed by electronics. Other applications include domestic appliances, pipes, fittings and 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

Demand in Europe has improved in early 2006 after a disappointing 2005. Sales volumes were said to be strong in January and most producers reported being sold out for February, with the trend looking set to continue into March. However, export markets, particularly to Asia, are slow due to a lack of demand.

European demand is expected to be down in 2005. Estimates vary from a fall of 1-2% to 4% year-on-year. Demand in China too was sluggish last year and imports were flat as orders for household goods and toys were lower than expected.

Bayer spun off its chemicals business into Lanxess in January 2005. Lanxess has withdrawn three commodity grades and is focusing on speciality grades. Production will be concentrated in Spain while only speciality grades will be manufactured at Dormagen, Germany. BASF started up a 215 000 tonne/year plant in Antwerp, Belgium in 2004.

 
Pricing

European spot prices for black ABS have drifted down since late 2005 to €1460-1550/tonne. Gross domestic prices for black ABS have largely remained stable at €1370-1550/tonne FD, although rises of €30-40/tonne are reported on February monthly business. Natural grade is quoted €70/tonne lower at €1300-1450/tonne while coloured material is €1490-1700/tonne. Players say margins continue to be eroded as butadiene and styrene feedstock costs remain high. Suppliers are targeting increases again in March, both on monthly and quarterly contracts.

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-acrylontrile) 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 gives more flexibility in its product range than the mass route and is used to produce high impact grades

Outlook

Global consumption is tipped at 4-5%/year. Demand growth in western Europe is put at 1-2%/year, with eastern Europe stronger at over 5%/year. The strongest growth is in Asia, driven primarily by China, and is predicted at 5-8%/year.

But overcapacity remains and more new plants are planned, which look set to keep world operating rates and prices under pressure. Investment is focused on China with two projects also being considered in Iran.

Europe is estimated to have surplus production of 20%. Players expect that more capacity cuts will be made in the future as companies strive to respond to the continuing pressure from cheaper Asian product and the ongoing move to commoditisation.

Major Global ABS CAPACITY*
Company Location Capacity
BASF Altamira, Mexico 130
Antwerp, Belgium 215
Ludwigshafen, Germany 200
Ulsan, South Korea 235
Cheil Industries Yosu, South Korea 400
Chi Mei Jen-Te, Taiwan 1000
Dow Chemical Allyn’s Point, ?Connecticut, US 30
Hanging Rock, Ohio, US 65
Midland, Michigan, US 90
Terneuzen, Netherlands 200
Formosa Chia-yi, Taiwan 240
Chemicals & Fibre Mailiao, Taiwan 120
Ningbo, China 150
GE Plastics Amsterdam, Netherlands 70
Bay St Louis, ?Mississippi, US 125
Grangemouth, UK 60
Ottawa, Illinois, US 215
Villers-St-Sepulcre, France 70
Washington, ?West Virginia, US 75
Jiangsu China Changzhou Plastics Changzhou, China 100
Jilin Chemical Jilin City, China 180
Korea Kumho?Petrochemical Ulsan, South Korea 200
Lanxess Addyston, Ohio, US 205
Camacari, Brazil 40
Dormagen, Germany 230
Map Ta Phut, Thailand 110
Nandesari, India 35
Panchmahal, India 45
Tarragona, Spain 130
LG Chem Yosu, South Korea 500
Ningbo LG-Yongxing Ningbo, China 330
Polimeri Europa Mantova, Italy 45
Ravenna, Italy 50
Techno Polymer Yokkaichi, Japan 330
Thai ABS Rayong, Thailand 110
Toray Industries Ichihara, Japan 70
Prai, Malaysia 240
UMG ABS Otake, Japan 65
Ube, Japan 110
Zhenjiang Chi Mei Zhenjiang, China 250
Zhenjiang GPPC Zhenjiang, China 180

Source: ICIS

* ’000 tonne/year




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