FocusAsia ABS prices seen falling on weak demand

31 March 2011 04:44  [Source: ICIS news]

ABS is used to make casings for electronic equipmentSINGAPORE (ICIS)--Acrylonitrile-butadiene-styrene (ABS) resin prices are trending lower on weak demand and are likely to remain soft in the near term, producers and traders said on Thursday.

Spot prices slipped to below $2,300/tonne (€1,633/tonne) CFR (cost & freight) northeast (NE) Asia this week, ICIS data showed.

Demand for the resin has waned in the aftermath of the earthquake and subsequent nuclear crisis in Japan and some traders were liquidating their stocks, said market players.

Buyers said they were hesitant to commit as they were unsure about the magnitude of the impact from the disruption of supply chains in Japan.

“The supply of some electronic components from Japan has been disrupted, hence the manufacturing of office equipment and consumer electronics sector in China could slow down,” said an ABS producer in Taiwan.

“As ABS is used to make casings for electronic equipment, demand for the resin could ease,” said a trader in Hong Kong.

ABS is used to manufacture the moulds for office equipment such as fax machines, telephones and computer monitors.

Furthermore, some end-users said resin prices have been high in recent weeks. Small-to-mid sized moulders said it was especially difficult for them to pass on the high resin costs to end-users.

“The relentless increase in ABS prices since December is another factor for the slowdown in demand,” said another trader in Hong Kong.  

ABS prices peaked at the high $2,300s/tonne CFR NE Asia in early March, but subsequently trended lower, ending the uptrend that started in July 2010.

However, ABS makers said their margins were shrinking as feedstock acrylonitrile (ACN) and butadiene (BD) prices have remained firm at around $2,750-2,800/tonne CFR NE Asia.

“While SM [styrene monomer] prices have slipped to below $1,400/tonne CFR China, ACN and BD prices are still increasing,” said a producer in Japan.

Meanwhile, the existing ABS stocks in China will require some weeks to be digested and the current ample supply will likely weigh on prices in the near term, said market players.

Nonetheless, a trader in China told ICIS that ABS prices are likely to rebound by the middle of the year once demand improves in the second quarter.

“Inventories would draw down, hence we could see prices supported towards the middle of the year,” said the trader.

($1 = €0.71)

For more information on acrylonitrile-butadiene-styrene, visit ICIS chemical intelligence

By: Clive Ong
+65 6780 4359

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