29 November 2012 18:47 [Source: ICB]
Weak performance of the ABS sector has been attributed to the economic malaise in the US and eurozone
Asia acrylonitrile-butadiene-styrene (ABS) values have continued to weaken, with price quotes for resins now at the same levels as for rival product high impact polystyrene (HIPS), market sources said.
Initial expectations that the narrowing price gap between the two products will lead to better demand for ABS failed to materialise, as general demand for resins has remained poor, they said.
On 16 November, ABS prices were assessed at $1,860-1,920/tonne CFR (cost and freight) NE (northeast) Asia, while HIPS was at $1,820-1,850 CFR China.
The weak performance of the region's ABS sector this year has largely been attributed to the economic malaise in the US and the eurozone that led to a significant decline in demand for Asian finished goods.
"ABS usually leads HIPS by $250-300/tonne but now that spread is gone, as ABS has performed worse than HIPS," said a Korean resin distributor.
Another reason for the relatively weaker prices of ABS over HIPS was poor feedstock prices.
Prices of acrylonitrile (ACN) and butadiene (BD), which make up around 40% of ABS, have performed poorly for several months.
ACN values have slipped to $1,700/tonne CFR NE Asia this month, from around $1,900/tonne CFR NE Asia in the first half of September. BD prices, on the other hand, declined to $1,665/tonne CFR NE Asia from $2,000/tonne CFR NE Asia over the same period, ICIS data showed.
SM PUSHES HIPS UP
For HIPS, however, prices of the key feedstock - styrene monomer (SM) - have been on the uptrend and are now hovering in the high-$1,500/tonne CFR China levels, up from the low $1,500/tonne CFR China levels in September.
"The buoyant SM prices have kept PS prices firm, while weak ACN and BD values have weighed down ABS prices," said a Taiwanese resin producer.
While some players anticipated that PS end-users could switch over to using ABS, since the price difference has narrowed significantly in recent weeks, this has largely not taken place as demand for resins remained lacklustre.
"The market is in a lull period now and demand for both PS and ABS is weak, so there is no buying impetus among end-users," said a southeast Asian resin producer.
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