FocusAsia ABS plummets, demand seen weak for May

08 May 2012 08:09  [Source: ICIS news]

By Clive Ong

SINGAPORE (ICIS)--Asian acrylonitrile-butadiene-styrene (ABS) prices fell to this year’s low amid receding demand which is unlikely to recover till June and poor buyers’ sentiment, traders and producers said on Tuesday.

ABS spot prices fell below $2,000/tonne (€1,540/tonne) CFR (cost & freight) China for the week ended 4 May with sporadic deals heard as low as $1,930/tonne CFR China.

ABS prices had peaked at $2,190/tonne CFR China in March this year.

Market sentiment turned increasingly bearish last week amid the precipitous fall in feedstock butadiene (BD) prices to around $2,500/tonne CFR NE (northeast) Asia.

BD prices peaked at around $3,950/tonne CFR NE Asia in the first half of February this year.

“The BD prices fall has prompted traders to offload ABS resins,” said a trader in Hong Kong.

Dealers in China and Hong Kong have offloaded resins in anticipation of a sharp fall in prices.

The lacklustre demand for ABS in the key Chinese market has also spurred traders to reduce inventories.

“Demand might pick up only towards the middle of the year ahead of the manufacturing season in China, but consumption is still weak,” said a producer in Taiwan.

Demand in the key Chinese market has not picked up after the May Day holidays as previously expected by some ABS suppliers.

A number of sellers attributed the lack of buying interest to the weak economic conditions in the eurozone and the US as well as the slow down in the Chinese economy.

“There is much headwind for the ABS sector this year as the Chinese exports sector is weaker due to poor demand in Europe and US for Asian made goods,” said a NE Asia ABS producer.

ABS resins are used in office equipment, consumer electronics, toys, as well as the automotive and construction sectors.

($1 = €0.77)

By: Clive Ong
+65 6780 4359

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