08 February 2012 06:12 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS)--Acrylonitrile-butadiene-styrene (ABS) producers in Asia are targeting higher offers this week despite lacklustre demand as feedstock butadiene remains on an uptrend eroding their margins, industry sources said on Wednesday.
Spot prices for butadiene (BD) have surged beyond $4,000/tonne (€3,040/tonne) CFR (cost & freight) ?xml:namespace>
Several ABS producers talked of offers at around $2,150/tonne CFR NE Asia and above this week.
“We have to offer at $2,150/tonne as a minimum in order to have some margins,” said a Korean supplier.
ABS prices touched $2,100/tonne CFR NE Asia this week, up from around $1,980/tonne CFR NE Asia in early January.
However, the increment in ABS prices has not kept pace with the BD price upswing with margins of producers being eroded away quickly.
“The price increase of ABS is slow compared to the butadiene cost surge as demand for resins remains lacklustre after the Lunar New Year holidays,” said a Taiwanese producer.
Demand has not picked up strongly as Chinese end-users were caught by surprise by the relentless increase in resin prices.
Hence, a number of buyers have held off purchases and remain on the sidelines.
“Buyers are also hesitant to commit as many are renegotiating with clients on pricing of final products, as they have based their production contracts on much lower ABS prices,” said a trader in
End-users who secured finished products production contracts late last year were mostly basing their agreements on ABS prices at around $1,900/tonne.
Many players expected the ongoing debt crisis in the eurozone and weak economic conditions in the
“However, high energy prices and strong BD performance has increased the prices of ABS, which was not expected during the year-end lull,” a resin trader in
The average operating rate of ABS in
While inventories among end-users and traders are relatively low, buying momentum has not improved significantly.
“The operating rates among ABS facilities in
ABS is used in the making of office equipment, consumer electronics, automotives as well as the construction sector.
Major suppliers in
Meanwhile the relentless BD price surge in
($1 = €0.76)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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