18 April 2012 06:40 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS)--Demand for acrylonitrile butadiene styrene (ABS) and styrene acrylonitrile (SAN) in Asia is expected to remain in doldrums given a general global economic weakness that affects ?xml:namespace>
China is a key market for ABS and SAN in the region.
Spot prices of the resins have been falling amid a languishing of demand this month – a situation that may extend through June, according to sellers.
ABS prices declined below $2,100/tonne (€1,596) CFR (cost & freight)
SAN values, on the other hand, tumbled to the low $1,800/tonne CFR NE Asia levels this month, after peaking at around $1,935/tonne CFR NE Asia in the second half of February, ICIS data showed.
Although prices have come off from this year’s highs, end-users deem them still too high and are hesitant to commit to current prices.
A weaker-than-expected Chinese demand in April has dampened sentiment in the ABS and SAN markets, prompting traders in recent weeks to liquidate stocks.
Poor economic conditions in the
“Demand for ABS and SAN in
While some suppliers appeared optimistic that demand for the resins would pick up towards the middle of the year as the Chinese exports sector kick into higher gear in the third quarter, others were less sanguine as global economic growth remains challenging.
“The improvement in demand in May and June is likely to be below expectations as the Chinese economy is slowing down”, said a resins distributor in south
Operating rates of ABS plants in
“Producers are reducing output as demand is weakening and margins are really poor”, said a Taiwanese resins producer.
With feedstock styrene monomer (SM) prices in the high $1,400/tonne CFR China levels and acrylonitrile (ACN) and butadiene (BD) values at around $2,350/tonne CFR NE Asia and $3,400/tonne CFR NE Asia, respectively, the feedstock costs of ABS are around $1,937/tonne.
The spread between ABS prices at $2,100/tonne and the feedstock cost of $1,937/tonne is slightly above $160/tonne - way below the spread which most producers require at $300/tonne to generate margins.
“At current prices, all producers are losing money making ABS resins,” said a NE Asian producer.
ABS has applications in office equipment, consumer electronics, toys, automotives, while SAN is used in plastic items like fan blades, cigarette lighters, toothbrush holders, tranparent trays in fridges.
($1 = €0.76)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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