26 September 2013 04:07 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS)--Offers for acrylonitrile-butadiene-styrene (ABS) in Asia increased by $20/tonne (€15/tonne) this week despite weak demand, as some producers attempt to improve margins amid continued price strength of main feedstocks for production, market sources said on Thursday.
Parcels for October shipments are being quoted at $1,950-2,000/tonne CFR (cost and freight) NE (northeast) Asia, they said.
Other suppliers, however, decided not to revise their offers as the key Chinese market will again close for a week-long National Day celebration on 1-7 October. China was on holiday on 19-21 September for its Mid-Autumn Festival.
Prices of ABS feedstock styrene monomer (SM) are hovering at $1,800/tonne CFR China this week, while those of butadiene (BD) are at above $1,450/tonne CFR NE Asia. Acrylonitrile (ACN), another feedstock of ABS, is also firm at around $1,850/tonne CFR NE Asia.
“Even with [ABS] prices at $2,000/tonne, ABS margins are still very squeezed,” said a Korean producer.
ABS cargoes are largely being sold at around $1,950/tonne CFR China and Hong Kong, with some parcels changing hands at $1,930/tonne CFR China, and at around $1,970/tonne CFR China for smaller lots, market sources said.
“Demand is unlikely to pick up as Chinese players will be away next week. And by the end of the National holidays, the market would have entered the lull season,” said a Hong Kog-based trader.
ABS resins are used to make consumer electronics, appliances, toys, and have applications in the automotive and construction sectors.
Demand for resins, including ABS, usually taper offer towards the end of the year, after the peak manufacturing season for exports during the months of July to October.
Economic malaise afflicting the US and the eurozone, as well as the slowdown in the Chinese economy, in the first half of this year has dampened demand for Asian-made products, resulting in weaker-than-expected consumption of resins.
ABS traders continued to keep low stocks in view of uncertain demand in the region. Most of them preferred to conduct back-to-back business, while end-users are also adopting a cautious strategy of buying on a need-to basis, keeping their inventories at manageable levels.
“Most end-users are buying just enough to meet immediate requirements. The inflow of orders for finished goods were weaker than anticipated, hence resin users do not want to stockpile ABS,” said a China-based trader.
Most suppliers also expect demand to taper off from the second half of October while some conceded that the manufacturing season has already ended for the year.
($1 = €0.74)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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