Asia’s ABS prices may fall on weak feedstock costs, demand

24 April 2012 06:50  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s acrylonitrile-butadiene-styrene (ABS) prices remain under downward pressure this week as feedstock butadiene (BD) and acrylonitrile (ACN) costs continue to decline and ABS demand stays weak, said traders and producers on Tuesday.

Spot ABS prices were around $2,080-2,130/tonne (€1,581-1,619/tonne) CFR China in mid-April but lower-priced deals have been heard in the market in the low $2,000s/tonne CFR China since last week.

Some sellers continue to offer at above $2,100/tonne CFR China but it is increasingly difficult to maintain such prices when other sellers are selling at lower prices.

Declining BD and ACN prices have dampened the sentiment of ABS buyers.

ACN prices fell to $2,225/tonne CFR NE Asia for the week ended 21 April from its recent peak of $2,350/tonne CFR NE Asia in early April.

BD prices fell to $3,225/tonne CFR NE Asia after peaking at $3,575/tonne CFR NE Asia in the second half of March.

“Some sellers have liquidated stocks in view of weakening feedstock prices and poor demand,” said a trader in Hong Kong.

However, a number of sellers remain cautiously optimistic that demand in the region will show signs of improvement after 1 May holiday in the region, although a significant increase may emerge only in June.

“Strong buying momentum will likely appear in June ahead of the Chinese manufacturing for the exports season in the third quarter,” said a Taiwanese producer. Demand for ABS in the Asian market has been weak as the US and eurozone economies remained troubled.

The slower economic growth in China has also weakened the demand for Asian-made goods and the consumption of resins, including ABS.

China's economic growth rate was moderated to below 8% this week

ABS is used to make office equipment, consumer electronics, toys, automobiles as well as in the construction industry.

($1 = €0.76)

By: Clive Ong
+65 6780 4359

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