UpdateSABIC cuts plastics production up to 20%

05 November 2008 20:01  [Source: ICIS news]

(Adds detail in paragraphs 4-11)

HOUSTON (ICIS news)--SABIC Innovative Plastics will reduce global production of its engineering thermoplastics by up to 20%, effective immediately, the company said on Wednesday.

SABIC is making the cuts as a result of significantly softening demand due to the slowdown in the global economy, the company said.

SABIC would elaborate on the details of the cuts with its suppliers and customers, the company said.

The company operates six acrylonitrile-butadiene-styrene (ABS) plants in Europe, the UK and the US with combined capacity of 615,000 tonnes/year. Its six polycarbonate (PC) plants in Japan, Europe and the US produce a combined capacity of more than 1m tonnes/year. 

SABIC would not comment on what rates it was running its resins plants.

US sales have decreased dramatically due to downstream slowdowns in the beleaguered automotive and construction markets. PC demand has also softened as CD and DVD sales have succumbed to downloadable media.

“Sales have slowed dramatically. I’ve had a lot of offers for product, but we don’t need it right now,” one compounder said, adding the economic conditions could force it to stop production for a week in November.  

SABIC’s move would add to what has already been a dramatic decrease in ABS production in 2008. Dow Chemical in February confined itself to the automotive ABS market, and INEOS levelled its own sales allocations in October as supplies of feedstocks butadiene (BD) and styrene tightened.

The tightness has also forced buyers who are still experiencing healthy ABS demand to wait longer for ordered material. One buyer said SABIC told him his recent order would not be filled until next year.

“They’re telling me I can’t get material until the beginning of January. They’re killing me,” the buyer said.

Domestic high-grade extrusion ABS was assessed on 31 October at 120-135 cents/lb, ($2,646-2,976/tonne, €2,037-2,292/tonne) according to global chemical market intelligence service ICIS pricing. PC was assessed at $1.50-1.65/lb on 29 October.

Market participants said those prices could drop, however. The supply cut has opened the door for importers to flood the US west coast with PC and ABS at lower prices than their domestic counterparts, they said.

One west coast resins distributor said Asian producers have been “aggressively” marketing ABS since October.

“Demand is collapsing in Asia faster than here. I wouldn’t be surprised to see us hit the $1 price point or even go under in the next couple of weeks,” the distributor said.

($1= €0.77)

For more information on ABS and PC visit ICIS chemicals intelligence
To discuss issues facing the chemical industry, go to ICIS connect
For more information on SABIC visit ICIS company intelligence

By: Ben Lefebvre
+1 713 525 2653

< previous article(VIDEO - ICIS news Europe Lunchtime Bulletin 2 November 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly