FocusStrong crude, SM to buoy up Asia ABS prices in near term

27 August 2012 08:40  [Source: ICIS news]

By Clive Ong

SINGAPORE (ICIS)--Asian acrylonitrile-butadiene-styrene (ABS) prices increased last week and will likely continue to derive support from buoyant values of feedstock prices although demand remains weak, market sources said on Monday.

Spot prices edged up towards $2,000/tonne (€1,600/tonne) CFR (cost & freight) NE Asia in the week ended 24 August, while lower-priced deals were being concluded near $1,950/tonne CFR NE Asia levels.

Assessed prices increased by an average of $10/tonne week on week to $1,930-1,990/tonne CFR NE Asia, according to ICIS.

“Prices could see further upside in the near term as crude oil and SM prices seem likely to stay firm,” said a southeast Asian producer.

US crude prices are currently hovering at above $97/bbl from around $89/bbl a month ago, while SM is currently trading at above $1,450/tonne CFR China.

Acrylonitrile (ACN), another ABS feedstock, similarly strengthened to $1,900/tonne CFR NE Asia last week, market sources said.

These provide ABS suppliers the impetus to maintain or quote higher offers, although butadiene (BD) – which makes up less than 20% of ABS – fell $50/tonne week on week to $1,850/tonne CFR NE Asia in the week ended 24 August.

A number of leading ABS producers have maintained offers at $2,000-2,050/tonne CFR NE Asia, but spot trades were much lower at $1,920-1,980/tonne CFR NE Asia in early to mid-August.

“The lower-priced parcels from traders are beginning to sell out, so prices [have] started to move higher towards producers’ offers,” said a trader in Hong Kong.

Actual ABS demand, on the other hand, is not expected to significantly improve in spite of the seasonal pick-up in China’s manufacturing activities for exports amid a much weakened demand from the West.

Manufacturing activities for exports usually spike in July to September.

Poor economic conditions in the US and the eurozone have been weighing on demand for resins in China in 2012 compared with the previous years.

ABS is a hard plastic used in the manufacturing of office equipment, appliances, consumer electronics, as well as in the automotive and construction sectors.

($1 = €0.80)

By: Clive Ong
+65 6780 4359

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