FocusAsia ABS slips as end-users keep inventory lean; BD fall drags

04 July 2013 04:33  [Source: ICIS news]

By Clive Ong

ABS is a resin used in the manufacture of appliances, office equipment, consumer electronics, toys, and has applications in the automotive and construction sectors.SINGAPORE (ICIS)--Spot acrylonitrile-butadiene-styrene (ABS) prices in Asia are softening as end-users are not beefing up stocks, anticipating continued weakness in resins demand for the rest of the year, market sources said on Thursday.

Falling prices of feedstock butadiene (BD) are compounding the strain on ABS values, they added.

ABS suppliers have slashed their offers this week by $20/tonne (€15/tonne) but buying interest failed to improve.

On 28 June, ABS  was assessed at a range of $1,900-1,940/tonne CFR (cost & freight) NE (northeast) Asia, down by an average of $20/tonne from the previous week, according to ICIS.

“Buying momentum is still weak despite offers in the low- to mid-$1,900s/tonne," said a producer in Taiwan.

Demand is expected to stay weak in July despite the start of the third-quarter manufacturing season in the key China market, with few orders for end-products being generated, particularly by small and medium factories, industry sources said.

This is largely an offshoot of prevailing weakness in economic conditions in Asia’s major export markets – the US and the eurozone.

China, which is the world’s second biggest economy, is also cooling down that some ABS makers said they expect weak demand to persist into the fourth quarter.

Buyers have adopted a cautious stance and are not procuring more than what they need, while traders are similarly hesitant to stockpile on ABS.

“Buyers in China have kept away and are unwilling to purchase,” said a Singapore-based trader.

Adding to the pressure on the ABS market is the continuous decline in values of feedstock BD, market sources said.

Over the past six weeks, BD have shed 24% of its value to $1,125/tonne in end-June, ICIS data showed.

“BD is the smallest component in ABS but its price decline still affected sentiment," said a producer in southeast Asia.

Prices of other feedstocks – styrene monomer (SM) and acrylonitrile (ACN) – were mostly firm at around $1,750/tonne CFR Asia.

ABS is a resin used in the manufacture of appliances, office equipment, consumer electronics, toys, and has applications in the automotive and construction sectors.

($1 = €0.77)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Clive Ong
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