Aromatics ’06: China ABS demand set to grow

29 June 2006 08:50  [Source: ICIS news]

SINGAPORE (ICIS news)--Chinese acrylonitrile butadiene styrene (ABS) demand continued to grow in 2006 despite increasing domestic capacities, an industry official said on Thursday.

Domestic demand grew to a projected 3m tonnes in 2006, up from 2.5m tonnes in 2002, while local production capacity increased to 1.695m tonnes from 1.095m tones, said Marcus Ryu, marketing manager of ABS and polystyrene (PS) for Cheil Samsung Korea.

This resulted in China needing to import around 1.305m tonnes in 2006, though this was less than the 1.405m tonnes in 2002, he added at the 2nd Asian Aromatics and Derivatives Conference.

Even though China’s gross domestic product growth was around 9.3-10.1% from 2003-2005 and is projected to be around 8.5% in 2006, ABS demand grew by 4-8% over the past three years.

Higher domestic production capacities are likely to moderate the need for imports, said Ryu. Competition was keen among producers in Japan, South Korea and Taiwan to secure more sales in China.

Higher energy and feedstock costs would continue to put pressure on ABS margins, while downstream industries like consumer electronics, automotive, toys would face difficulty in absorbing the high resin costs, he added.

For PS, Ryu said that imports had been declining for the last few years. Imports into China were at 1.28m tonnes in 2005, 8% lower than the 1.39m tonnes in 2003.

This was mainly due to the waning fortunes of some PS end-product industries such as cassette and video tapes, and cathode ray tube televisions.

Domestic PS production is expected to grow to 1.32m tonnes in 2006, compared to 1.186m tonnes in 2003. Imports are expected to fall to 1.268m tonnes in 2006, down from 1.28m tonnes in 2005 and 1.39m tonnes in 2002.

By: Clive Ong
+65 6780 4359

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