Price & Market Trends: US drought hits ABS, nylon producers

07 September 2012 15:40  [Source: ICB]

The drought in the US midwest is taking its toll on more than just the farmers and ranchers who are seeing their crops shrivel up and their cattle looking thin.

Because of the lack of rain, those companies that typically supply material for the manufacture of lawn and garden equipment, as well as industrial agriculture, are seeing order volumes diminish.

Some producers of acrylonitrile-butadiene-styrene (ABS) and nylon, especially, are seeing order volumes shrink as a result of the drought.

Most of these businesses being affected are not the large major producers, although the distributors they supply may be feeling the effects, large producers said. It is the smaller producers that are noticing the drop in demand.

With the lack of rain, the need to mow lawns and work the farmlands has diminished, and along with that there has not been a need to replace those items which might have otherwise been replaced, the smaller producers added.

One ABS producer also noted that the mild winter that most of the US experienced in 2011-2012 will be felt in a decrease in demand for items made with ABS this winter because many of the snow blowers manufactured for last winter were not all sold and therefore still sit in stores.

With snow blowers already in inventory, those stores will not order as many this year and that means that the manufacturers of those pieces of equipment will not need as much ABS material for this year's winter equipment manufacture.

By: Wesley Busch
+1 713 525 2653

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