26 April 2013 10:08 [Source: ICB]
Offers are being quoted the week ended 19 April at below $1,850/tonne CFR (cost & freight) China, down from around $1,900/tonne CFR China the prior week, according to ICIS data.
"Demand is very weak and lower prices are finding few buyers," said a Hong Kong trader.
With economic conditions remaining challenging in the US and the eurozone, demand for Asian-made goods such as appliances and consumer electronics - the major downstream sectors of ABS - has declined.
"ABS is under pressure as the key appliance sector is weak in the export markets," a source at a Taiwanese producer said.
ABS also has applications in toys, as well as in the automotive and construction industries.
Sellers of ABS expect demand to remain weak through to May, which will start with a Labour Day holiday.
Buyers continued to hug the sidelines despite having low resin inventories, expecting prices to weaken further in the near term, market sources said.
"Buyers are not actively picking up resins as orders for finished goods are limited as well," said another Hong Kong-based trader.
Any substantial recovery will likely emerge only in the third quarter, the trader said.
ABS prices reached parity with high impact polystyrene (HIPS) values in the second half of March and are continuing to head downhill.
ABS, which is a harder plastic with higher impact resistance than HIPS, usually commands a premium of around $200/tonne over its rival product. HIPS resins are currently priced in the low-$1,900/tonne CFR Asia levels.
The poor price performance in ABS has now resulted in prices at a near parity with general purpose PS (GPPS).
"It is unbelievable that ABS and GPPS prices are now almost identical; this has probably never happened before," said a PS producer in southeast Asia.
Some market players are even suggesting that ABS prices could fall below GPPS values.
STRONG GPPS DEMAND
Unlike ABS, GPPS continues to enjoy strong demand from key downstream sectors such as food packaging and utensils. Particularly during the pre-Ramadan period, food packaging demand from the Middle East and southeast Asia is expected so keep GPPS consumption firm in the second quarter.
Ramadan, which starts on 9 July, is a month-long Muslim fasting month that ends with a feast.
Northeast Asian ABS producers have been cutting output because of poor margins.
"Our ABS unit is running at 60% in April due to persistently weak demand and profits," said a source at a South Korean producer.
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