30 April 2013 07:41 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS)--After some two months of downtrend, Asia acrylonitrile-butadiene-styrene (ABS) prices could be bottoming out supported by high feedstock values, producers and traders said on Tuesday.
Spot prices of ABS fell below $1,850/tonne (€1,406/tonne) CFR (cost & freight) NE (northeast) Asia in the second half of April from around $2,055/tonne CFR NE Asia in the second half of February, according to data at ICIS.
“With energy futures and styrene prices on a firm trend, ABS prices are finding some support,” said a producer in southeast Asia.
Traders in Hong Kong also reported some stabilisation in prices as sellers did not want to meet lower bids.
“Some bids were at $1,800/tonne and below but remained unfulfilled as sellers were unwilling to lower prices,” said a trader in Hong Kong.
ABS prices have fallen even below high impact polystyrene (HIPS) values. It used to command a premium of $200/tonne or more in the past.
“Having price of ABS below HIPS is untenable for the longer term as users of HIPS will switch,” said another resins dealer in Hong Kong.
Meanwhile, suppliers expect prices to gain slowly as excess supply remained in the south China market. Weak exports of finished goods to the US and eurozone have dampened demand for ABS.
Despite the weak demand, ABS prices appeared to have found support from firm feedstock costs. Apart from SM, butadiene (BD) prices stabilised at around $1,400/tonne CFR NE Asia while acrylonitrile (ACN) hovered around $1,750/tonne CFR NE Asia.
“HIPS prices are supported by SM and maintaining a normal spread with general purpose PS (GPPS), hence it seems ABS prices are too low currently,” said a PS maker in southeast Asia.
Resins makers expect little switching from HIPS to ABS as end-users are usually constrained by contracts to use a certain resin for a year.
However, if ABS prices continue to trade at or below parity to HIPS, then more users will make the switch next year.
ABS resins is used in the manufacturing of appliances, consumer electronics, toys as well as in the construction and automotive sectors. HIPS is commonly used in consumer electronics and toys.
($1 = €0.76)
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