Europe auto cuts could threaten ABS demand

17 October 2008 14:43  [Source: ICIS news]

LONDON (ICIS news)--Further production cuts at European automotive factories are threatening to lower demand again for ABS (acrylonitrile-butadiene-styrene), buyers said on Friday.

“Automotive demand for ABS has dropped considerably. Toyota announced this week it was going to lay off a shift in a factory in the UK, which could impact demand further,” a buying source said.

Toyota’s cut in production follows temporary BMW and Opel factory closures in Germany. Fiat is also planning to shut down one of its factories in Italy for 15 days in November.

European compounding grade was assessed at €1,580-1,620/tonne ($2,135-2,190/tonne) FD (free delivered) NWE (northwest Europe) in October, according to global chemical market intelligence service ICIS pricing.

“With demand at such a low level, European [ABS] producers might consider cutting production,” another buying source said this week.

In Asia, ABS producers are currently only running at 50% of their capacity as demand in the region is extremely low.

ABS prices in Asia are approximately $200/tonne (€148/tonne) more expensive than in Europe.

A buyer said on Thursday that it had seen Asian suppliers trying to sell ABS to Europe at extremely low prices.

“Asian producers are attempting to sell ABS to Europe at a far lower level than the Asian market price,” the consumer said. "Unfortunately, demand in Europe is so low that there is little point in buying."

According to market participants, there is a growing amount of uncertainty and panic about plummeting demand in the face of the financial crisis.

“There is little to no optimism in the chemical markets at the moment. Personally, I think this situation may last until midway though next year,” a buyer representative said.

($1 = €0.74)

For more on ABS visit ICIS chemical intelligence
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By: Stuart Moir
+44 20 8652 3214

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