27 August 2013 07:54 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS)--While suppliers of acrylonitrile-butadiene-styrene (ABS) resins in Asia reduced their offers by around $20/tonne (€15/tonne) in the week ended 23 August, the lower prices have not boosted buying interest, producers and traders said on Tuesday.
Offers of ABS were heard in the low-to-mid $1,900s/tonne CFR (cost & freight) Asia, but buying interest has remained lacklustre despite the onset of the third-quarter manufacturing season for exports. ABS resins are used to make toys, appliances, consumer electronics as well as a material in the construction and automotive sectors.
“September is almost upon us, but demand did not show any improvement,” a producer in southeast Asia said.
Some traders, however, said they are cautiously optimistic that a rebound in demand could surface in September as end-users would usually purchase resins ahead of China’s week-long holiday in early October.
“There should be some pre-buying activities in September as end-users will stock up before the long holidays,” said a trader in Hong Kong.
Meanwhile, overall demand for ABS in Asia has remained poor, because the exports of finished goods to US and the eurozone stayed weak.
“Demand for ABS remains weak as orders for finished goods among the factories were lower than expected,” said another trader in Hong Kong.
Other suppliers have been less optimistic, having largely brushed off this year and dismissed any chances of a significant pick-up in demand because of current macroeconomic conditions. Apart from the sluggish US and eurozone markets, a number of Asian economies have performed below expectations. An economic slowdown in China as well as sharp currency depreciation in India and Indonesia are expected to weighed on market sentiment and reduce consumption.
Consequently, demand for ABS could stay weak for the remainder of the year, the suppliers said.
With key feedstock styrene monomer (SM) prices tumbling to below $1,750/tonne CFR China at one point in the week ended 23 August, buyers of ABS have come to expect lower resin prices.
“While SM prices have regained some lost ground, ABS buyers continued to ask for lower resin prices,” said a Taiwanese producer.
However, most suppliers said they are not keen to cut their prices significantly, given that their margins remained squeezed from firmer feedstock costs.
Other feedstock butadiene (BD) prices rebounded recently to around $1,150/tonne CFR NE (northeast) Asia, while acrylonitrile (ACN) prices were steady in the high $1,700s/tonne CFR NE Asia.
($1 = €0.75)
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