FocusAsian ABS seen falling as offers slashed on soft demand

10 April 2012 09:52  [Source: ICIS news]

By Clive Ong

SINGAPORE (ICIS)--Asian acrylonitrile-butadiene-styrene (ABS) prices declined sharply last week as a number of producers cut offers to stimulate demand though consumption is seen weak in the absence of factory orders, traders said on Tuesday.

Offers of some major suppliers fell by more than $100/tonne (€76/tonne) to the low $2,100/tonne CFR (cost and freight) China while other offers were at $2,050-2,090/tonne CFR China for the week ended 6 April.

“The sharp reduction is offers is just an effort by the producers to bring offers more in line with spot prices,” a trader in Hong Kong said.

Spot prices in China were around the low $2,100s/tonne CFR China since late March, according to ICIS data.

Despite the lower offers, demand remains weak with buyers delaying commitments.

Most end-users of ABS have limited orders on hand while others anticipate further weakness in prices in the near term and have decided to wait and see.

The feedstock prices of ABS were mostly stable this week but could not prevent resin prices from declining.

Styrene monomer (SM) prices were unchanged in the high $1,400s/tonne CFR China, while butadiene (BD) and acrylonitrile (ACN) values were mostly stable at $3,500/tonne CFR NE Asia and $2,400/tonne CFR NE Asia respectively.

Factories in China usually ramp up production of finished goods from April but so far the global economic malaise has dampened demand for Asian made goods.

“The weak economic conditions in the US and Europe have curbed demand for Asian made goods and hence ABS consumption has remained weak,” said a Japanese producer.

With the May Day holidays in China coming up in a few weeks, demand for ABS might remain slow till the middle of the year.

“The market will wind down again in a couple of weeks as May Day approaches, so a significant improvement in demand might only emerge in June,” said a Taiwanese producer.

ABS is an impact resistant resin used in the manufacturing of toys, consumer electronics, office equipment, automobiles as well as the construction industry.

($1 = €0.76)

By: Clive Ong
+65 6780 4359

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