10 May 2012 04:50 [Source: ICIS news]
SINGAPORE (ICIS)--Major acrylonitrile-butadiene-styrene (ABS) resin suppliers in Taiwan and South Korea have reduced offers to below $2,000/tonne (€1,540/tonne) CFR (cost & freight) NE (northeast) Asia this week amid persistently weak demand in the region.
Offers were down by $50-100/tonne from last week, according to ICIS data. Spot prices peaked at $2,190/tonne CFR NE Asia in March this year.
Falling feedstock prices also added downward pressure on ABS prices. Key feedstock styrene monomer (SM) prices declined to around $1,460/tonne CFR China this week from above $1,500/tonne CFR China in late April and early May, ICIS data showed.
However, butadiene (BD) prices registered the sharpest fall to below $2,500/tonne CFR NE Asia, down by more than $1,000/tonne in a month.
Faced with buyers’ refusal to commit, suppliers slashed prices in a bid to draw buyers back to the market. However, there appears to be limited buying interest so far.
“The market is sedate with limited trade done as some buyers now expect further price falls”, said a trader in Hong Kong.
Offers of prompt parcels are now mostly at $1,930-1,980/tonne CFR China and Hong Kong while some buying indications were below $1,900/tonne CFR China.
However, sellers are not keen to reduce prices to below $1,900/tonne CFR China as margins are already very squeezed at current prices.
“To reflect proper margins, ABS prices have to be above $2,100/tonne”, said a producer in Taiwan.
Prices are now the lowest for 2012. ABS prices were in the mid-to-high $1,900s/tonne CFR NE Asia in early January but have stayed above $2,000/tonne CFR NE Asia since then until April.
A number of traders expect further weakness in ABS prices as buyers are hesitant to enter the market. Weak economic conditions in the US and eurozone have curtailed demand for Asian made goods. Consequently, demand for resins, including ABS, has been weak this year.
ABS is a resin used in the manufacturing of office equipment, consumer electronics, toys as well as in the automotive and construction sectors.
($1 = €0.77)
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