China ABS rises $144/tonne on high feedstock

03 June 2008 12:08  [Source: ICIS news]

SHANGHAI (ICIS news)--Chinese acrylonitrile butadiene styrene (ABS) prices have risen by yuan (CNY)1,000/tonne ($144/tonne) from early May due to rising feedstock costs, producers and traders said on Tuesday.

ABS prices were assessed at CNY16,550-16,950/tonne delivered (DEL) east China and were likely to rise further if feedstock costs remained high, traders said.

"High feedstock prices squeezed our margins, so we have to pass some rising costs to customers," a producer said.

Acrylonitrile(ACN), butadiene(BD) and styrene monomer (SM) are feedstock for ABS.

Prices of raw material butadiene (BD) increased by CNY3,000/tonne to CNY18,000/tonne ex-works(EXW), while another feedstock, styrene monomer (SM) rose CNY2,200/tonne to CNY13,720-13,770/tonne ex-tank east China from  its early May levels.

Some ABS producers, who have been unable to pass on the rising costs to downstream converters, were planning to reduce their operating rates to reduce losses, sources said.

"We have no choice but to increase ABS prices in response to high feedstock values. If the end-users could not accept the high prices, we will consider reducing operating rates to relieve the cost pressure," said a producer in Jiangsu province, east China.

The ongoing credit crunch and the appreciation of the yuan, were forcing downstream users to resist high ABS prices.

"Our cash-flow is not smooth this year as the government controlled the loans strictly, so we have no sufficient money to buy ABS cargoes at such high levels," a downstream buyer said.

"This year, our exports to the US market declined due to Chinese currency appreciation and a looming US recession, impacting the buying interest for ABS," another user said.

($1=CNY6.93)

Paris Lv contributed to this article

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By: Judith Wang
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