31 October 2012 06:34 [Source: ICIS news]
By Clive Ong
Lacklustre demand for ABS, which usually commands a premium of $200-300/tonne (€154-231/tonne) to HIPS given a stronger resistance quality, saw the price gap narrowing since August, they said.
“The usual spread between ABS and PS is less than $100/tonne currently, and maybe prices of the resins could reach parity soon,” said a China-based ABS trader.
On 26 October, ABS prices were assessed unchanged at $1,920-1,960/tonne CFR (cost and freight) NE (northeast)
“Perhaps more HIPS users will start to switch to ABS since it has higher impact strength,” said a Hong Kong-based trader.
The ABS-HIPS price spread has been narrowing since mid-August, when it fell below $200/tonne from the peak of $390/tonne on 17 February, according to ICIS.
A number of traders expect ABS makers to try raising prices, but it would be difficult given the current lull season and declining values of main feedstocks acrylonitrile (ACN) and butadiene (BD).
“ABS demand is very weak this year as the Chinese exports sector was sluggish,” another Hong Kong-based trader said.
Weak economic conditions in the
ABS - which is made up of 25% ACN, 15% BD and 60% styrene monomer (SM) - is used in making toys, appliances, consumer electronics and office equipment.
Falling prices of feedstocks ACN and BD compound the pressure for ABS.
BD tumbled to $1,775/tonne in late October from around $2,450/tonne CFR NE Asia in mid-July. ACN, on the other hand, shed $200/tonne from mid-September to $1,750/tonne in late October because of poor demand, ICIS data showed.
“The weak performance in ACN and BD prices since late September has caused ABS prices to stagnate,” said an ABS producer.
HIPS, on the other hand, is being buoyed up by firm values of feedstock SM as the product has a higher 90% content of the monomer compared with ABS.
SM prices have gained more than $300/tonne from early June to $1,625/tonne CFR China on 19 October because of strained availability of spot cargoes in
($1 = €0.77)
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