ABS demand falls short of September expectations

20 September 2013 18:01  [Source: ICIS news]

LONDON (ICIS)--Higher feedstock costs and low end-use consumer consumption have meant that European acrylonitrile-butadiene-styrene (ABS) demand has fallen short of expectations, market participants said on Friday.

On both the buy and sell side of the market, September’s volumes have not met with market participants’ expectations, with many seeing the month’s demand below forecast.

“There has been no growth as expected, especially in the automotive market,” one producer said.

“[In] September [we] really expected demand should be back at least to June/July levels which was not the case”, a second producer said, adding that September demand was very similar to August levels, which in turn were about 10-15% below June and July.

Buyers have also suffered during the month.

“Demand – we are going on day by day because forecasting is really difficult to do,” a buyer and compounder said, adding: “We were hoping something would change after the holidays [in August] but haven't seen this.”

Despite expecting a price rise after August, the combined increases in the September contract prices of the three ABS feedstocks – styrene rose by €85/tonne ($115/tonne), acrylonitrile settled at an increase of €55/tonne, and butadiene rose by €25/tonne – caught many ABS market participants by surprise.

Subsequently, some buyers may have moved to the sidelines this month, using existing stock purchased ahead of the September increases in order to avoid buying at higher rates.

“Because of the way things [oil prices] spiked at the beginning of the month, people certainly held off [buying],” a buyer of compounding material said.

There was a hint of optimism in the market, however. One producer said its September demand was in line with its forecast, seeing good demand from the automotive and home appliances sectors.

Players are now waiting for indications of October feedstock price directions. Any reduction in October prices could lead to improved demand next month, players agreed.

($1 = €0.74)

By: Matt Tudball
+44 208 652 3214

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