22 February 2008 23:59 [Source: ICIS news]
Correction: In the ICIS news story headlined "Europe ABS prices settle mostly at Feb rollover" dated 22 February, 2008, please read in the second paragraph ...range of €1,430-1,605/tonne FD... instead of ...range of €1,430-1,465/tonne FD... A corrected story follows.
LONDON (ICIS news)--February acrylonitrile-butadiene-styrene (ABS) contract prices were settled between a rollover and slight increases from January on good availability and strong competitive pressure, buyers and sellers said on Friday.
Domestic prices for natural injection moulding grades were assessed up €5/tonne ($7/tonne) at the low end resulting in a new range of €1,430-1,605/tonne FD (free delivered) NWE (northwest Europe).
Prices for all other grades of ABS were assessed unchanged, according to global chemical market intelligence service ICIS pricing.
Producers had sought price increases of €20-30/tonne but conceded that their efforts had been thwarted by a well-supplied market and the decision of one major seller to postpone its planned February hikes.
The seller in question, which manufactures specialised ABS grades, said it had originally intended to seek plus €20/tonne but had ultimately been dissuaded by lower than expected demand, good availability and a high level of imports.
Other European producers said this aggressive stance meant they were unable to keep prices in line with rising feedstock costs, leading to a narrowing of their operating margins.
One major seller, which had achieved only €5/tonne of its plus €30/tonne February target, said it could not understand why other sellers were not pushing for hikes at a time of good demand and higher raw material prices.
The seller said its margins had taken a severe hit in January and February, which it described as “a kind of a disaster”.
“I’m extremely disappointed with developments since the beginning of this year,” the source said, adding that “the situation is getting more and more critical”.
The seller dismissed the idea that Asian imports were the key factor, suggesting price parity had been more or less achieved and European producers could demand a premium for their product.
The source said its price target for March would be plus €50/tonne, which it felt was entirely feasible under the circumstances and absolutely essential to maintain viable margins.
Another producer said it had achieved slight February increases for some accounts but had been forced to compromise on its targets to avoid losing sales volumes.
Buyers and resellers were in agreement that sellers’ efforts to raise prices had been unsuccessful due to ample supply in the market.
The situation regarding imported volumes was very different, with one reseller saying that higher styrene costs had driven up February prices for Asian material by as much as €30-70/tonne.
One buyer of European ABS who had secured a rollover for both February and March reported that even with the favourable exchange rate, it was proving difficult to obtain Asian product at significantly lower prices.
A UK-based importer said it had also been hit by the stronger value of the euro against the pound, forcing it to raise prices by £30/tonne ($59/tonne) over the first quarter.
Major European ABS producers include BASF, Dow, INEOS ABS and Polimeri.
($1 = €0.68)
($1 = £0.51)
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