15 February 2012 05:39 [Source: ICIS news]
By Clive Ong
ABS offers are at above $2,200/tonne (€1,672) CFR (cost & freight) NE (northeast)
In the first half of January, ABS prices were at around $2,000/tonne and PS at about $1,490/tonne CFR China for PS, according to ICIS.
“Further hikes in resin prices are possible as feedstock prices have performed strongly,” said a Hong Kong-based trader.
SM prices are hovering at low-to-mid $1,400/tonne CFR China levels for the past two weeks, while values of butadiene (BD) spiked by more than 30% from the first half of January, with quotes currently at above $4,000/tonne, ICIS data showed.
“The feedstock prices are very high, if resin prices cannot increase, producers would have to shut down [plants]," said a resin producer in
“We have no choice but to increase resin prices again as margins are thin,” said a Taiwanese producer.
But buyers are continuing to pose strong resistance to higher resin prices, because of increasing difficulty in passing on their costs to end-products.
ABS is used in a wide range of finished products, including household appliances, office equipment and toys. PS resins, meanwhile, are used in the manufacturing of toys, packaging products, utensils and consumer electronics.
A number of end-users secured production contracts for finished goods based on resins procured at lower prices in November and December last year.
Many of them are trying to re-negotiate with clients to increase the prices of end-products, or the contracts might not be fulfilled, market sources said.
While demand has picked up somewhat in late January, after the Lunar New Year holidays, it was slower than expected.
“Most of the buying activities are from end-users replenishing some stocks,” said another trader in
Market players continue to expect demand for Asian made products to be adversely affected by the ongoing debt crisis in Europe, and the weak economic conditions in the
Major ABS and PS suppliers include Chimei Corp, Formosa Chemical & Fibres Corp, Taita Chemical, LG Chem, Kumho Petrochemical and Cheil Samsung.
($1 = €0.76)
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