11 March 2013 15:32 [Source: ICIS news]
LONDON (ICIS)--Buyers in the European acrylonitrile-butadiene-styrene (ABS) market are resisting price hikes of up to €60/tonne for March contract business because of flat demand and ample supply, sources said on Monday.
However, suppliers' bullish stance on prices may mean buyers will not see much of a reduction on March contract price targets.
Some producers had targeted increases of up to €60/tonne ($78/tonne) for March, citing higher feedstock costs and good demand in January and February as the main reasons for the increase.
Other producers are waiting for the outcome of the March feedstock acrylonitrile (ACN) contract price before committing to a firm figure for ABS hikes.
“We are still waiting for ACN [to settle] … we will probably see how raw materials are going to change [this] week,” a producer said on Monday.
Buyers’ initial reactions to the €60/tonne target were that it was too high, and that current demand levels did not warrant such a large hike.
But producers are being bullish on prices and not giving away much ground in their negotiations.
“Producers are being very persistent and not accepting a rollover,” a distributor said, adding that it had had to accept increases of up to €50/tonne for general purpose grades of ABS.
Views on demand are mixed. Producers have seen good demand levels in February, which they expect to continue into March. While not able to pinpoint the exact cause of the increase, producers said higher prices for Asian-produced ABS, as well as increased spot enquiries for certain grades, had kept demand satisfactory.
One supplier saw demand from eastern European markets, as well as Russia and Turkey, was keeping demand levels consistent, counterbalancing the drop-off in southern Europe caused by weak economic conditions.
However, buyers still see demand as being fairly flat, with some experiencing a slight drop compared with February. General economic malaise in European markets, particularly in the automotive industry in southern Europe, has impacted ABS demand.
ABS prices rolled over in February at €2,195-2,265/tonne free delivered (FD) northwest Europe (NWE) for compounding grade, €2,285-2,370/tonne FD NWE for injection moulding (natural) and €2,210-2,370/tonne FD NWE for extrusion grade (natural), according to ICIS.
ABS is widely used in the automotive and household goods sectors, in the production of car interiors and domestic appliances.
($1 = €0.77)
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