Europe August ABS increases €40/t on average

22 August 2008 23:59  [Source: ICIS news]

LONDON (ICIS news)--Assessed monthly contract prices for Europe August acrylonitrile butadiene styrene (ABS) increased by an average of €40/tonne ($60/tonne) from July on higher production costs and sellers’ need to recover lost margins, sources said on Friday.

Producers, buyers and distributors reported increases of between €35-80/tonne, while two buyers of imported material from Asia reported rollovers.

Material in the Asian market had been decreasing in price week on week but was stabilising. It was believed that buyers were still purchasing material shrewdly from the region in the hope of further price decreases.

Prices for extrusion grade ABS were lifted to €1,600-1,690/tonne FD (free delivered) NWE (northwest Europe).

Injection moulding grades also increased, with natural at €1,575-1,670/tonne FD NWE, black at €1,605-1,720/tonne FD NWE and colour at €1,770-1,950/tonne FD NWE.

Compounding grade material was raised to €1,580-1,620/tonne FD NWE for natural.

Producers’ original targets had been of €80/tonne on the back of short butadiene supply and a higher Q3 butadiene settlement of €1,260/tonne FD NWE.

Initial third-quarter acrylonitrile (ACN) settlements had also played a role, settling at €125/tonne higher than in the second quarter.

Buyers had been keen to avoid further increases, especially in light of slow demand due to the summer holiday period.

One manufacturer believed that Polimeri’s ongoing force majeure at its 50,000-55,000 tonnes/year plant in Mantova, Italy, had played a role in the partial success of its increases.

The declaration was still in place although a source close to the company expected it to be lifted by the end of the month. A specific date, however, was still unknown.

Dow announced that it would seek further increases of €50/tonne effective of 1 September or as contracts allowed.

The source said that demand remained strong which it believed would give support to increases but butadiene was short.

He added that, despite slight price decreases, styrene was still trading at relatively high levels which continued to put pressure on prices.

Another producer said it was still undecided as to whether it would target increases in September as feedstock prices were hard to predict, and if they decreased it would be very difficult to implement price hikes.

A buyer said that it thought September price increases had a good chance of success, especially when taking into account the shortage of butadiene and the fact that global ABS capacity had decreased due to some producers cutting rates in light of poor demand.

($1 = €0.67)

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By: Sarah Trinder
+44 20 8652 3214

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