FocusAsia ABS, SAN retreat on weak China demand; may soften further

30 November 2010 09:13  [Source: ICIS news]

By Clive Ong

SINGAPORE (ICIS)--Spot prices of acrylonitrile-butadiene-styrene (ABS) and styrene-acrylonitrile (SAN) retreated this week and may weaken further on lacklustre demand from the key China market, industry sources said on Tuesday.

Manufacturing activities in China had slackened in late October, causing demand for resins to taper off, they said.

ABS spot prices slipped to $2,200 tonne/year (€1,672/tonne) CFR (cost and freight) NE (northeast) Asia, down $20-30/tonne from last week, while SAN fell $50/tonne to $2,020/tonne, market sources said.

Until this week, ABS had been on an uptrend since July, according to ICIS data.

ABS is used in the office equipment, personal computers, consumer electronics and automotive sectors, while SAN is a transparent resin used in consumable items like disposable cigarette lighters, toothbrush holders and fan blades.

“Offers have declined but buyers still refused to commit,” said a Hong Kong-based trader.

China’s demand was expected to remain soft until after the Lunar New Year holidays in early February next year, with some expecting no significant improvement in demand until the second quarter of next year, when factories in China ramp up production again.

“Buyers decided to wait and see, expecting prices to fall further during the current lull season,” said another trader in Hong Kong.

Some were buying in small quantities to tide them over urgen requirements, bent on shaving the current strong margins that ABS and SAN producers currently enjoy.

“Margins are indeed very good at this point in time, in fact much higher than the average over the past few years,” said an ABS producer.

With key feedstock styrene monomer (SM) values hovering at around $1,250/tonne CFR China, the current spread between ABS and SM is around $950/tonne, more than double the typical difference of $300-400/tonne, market sources said.

Some buying interests could emerge in December as end-users with limited stocks on hand may take advantage of the lower prices to build up inventory.

($1 = €0.76)

To discuss issues facing the chemical industry go to ICIS connect

By: Clive Ong
+65 6780 4359

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