Price and market trends: Asia ABS players aggressive in Europe pricing

26 July 2013 08:45  [Source: ICB]

Asian producers of acrylonitrile-butadiene-styrene (ABS) are still being "aggressive" with price offers to European buyers, market participants said on 15 July.

"[South] Korean importers with no duty are aggressive," a European distributor said, adding the South Korean suppliers have dropped prices by about €50/tonne ($65/tonne), helped by a further drop in import duty on 1 July 2013.

The duty on ABS imports for South Korea into the EU is now 1.6%, down from 3.2% previously, a South Korean producer told ICIS.

South Korea entered into a Free Trade Agreement with the EU27 countries on 1 July 2011, which will eventurally see the duty on imports into the EU drop to zero.

The week ended 12 July, Asian-produced general purpose grade ABS was being offered at €1,650-1,750/tonne FD (free delivered) west Europe. Some players in the European market suggested that the low end of that range would perhaps be an exception, and that prices were more around €1,700/tonne and above.


Of particular interest, a European producer said a German buyer had been offered a fixed six-month price of €1,760/tonne FD NWE (northwest Europe) until December 2013.

The producer said this could be a sign that, despite most Asian producers running at below 70% capacity, weak ABS demand in Asia is causing them to look to Europe to move surplus volumes.

This fixed-term price, however, may not be as attractive as it may seem, a European buyer said on 15 July. If European butadiene (BD) prices continue to drop as they did in July, and if feedstock styrene continues to surge in Asia, European produced ABS may become more attractive, with the added incentive of significantly shorter delivery times.

Speaking on 12 July, a European trader said that it is unlikely that Asian prices will drop further, though there may be room for further downward adjustment, albeit very small.

European July domestic ABS prices are looking likely to see a rollover to reductions of up to €30/tonne because of the €250/tonne drop in feedstock butadiene, expected lower demand ahead of the summer holiday period, and pressure from the Asian producers.

June European domestic prices for compounding grade (natural) ABS are at €2,195-2,205/tonne FD NWE, injection moulding (natural) grade at €2,285-2,310/tonne FD NWE and extrusion grade (natural) at €2,210-2,310/tonne FD NWE according to ICIS.

Talks in the European market for July prices are ongoing.

ABS is used in a variety for end use markets, such as automotive, construction, home appliances and electrical goods.

By: Matt Tudball
+44 208 652 3214

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