21 March 2013 20:34 [Source: ICIS news]
US producers said they expect to get back into the market in late April or early May, and that domestic prices will drop by about 15 cents/lb ($331/tonne, €255/tonne) on lower-priced feedstocks.
“When you look at the spread between our prices and the Asian imports, it’s too wide,” said one market source. “We’ve actually walked away from several pieces of business. We’re not going to lose money simply to do deals.”
That has been the story in the US ABS market for the past week or so. Asian producers built up inventory ahead of the Lunar New Year, but the market did not come back as expected, and now they are moving product to the US.
Asian ABS is being sold in the US for as low as 90 cents/lb, while the US producers are priced around $1.30/lb.
US ABS producers also said that March and April demand is not as strong as they had expected.
“They are not delivering the volume that they were supposed to,” said one source.
“March is better than this time last year,” said another source, “but it’s basically flat to February.”
Several US producers said they think their Asian counterparts will burn through their excess inventory sometime in April.
Many see most of their domestic US feedstocks coming down except for acrylonitrile (ACN). Only then, producers said, will they think about getting back into the market.
“The trick is to get to May,” said one producer. “We have to try and maintain our current pricing, then we’ll get a margin per tonne uplift, which will bring us back to where we were in the fourth quarter last year [in terms of favourable margins].”
"At that point, we'll have to give something back [on price]," one source said.
US producers of ABS include INEOS ABS, Network Polymers, SABIC Innovative Plastics, Styrolution and Styron.
($1 = €0.77)
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