European ABS prices likely to drop on reduced feedstock costs

04 October 2013 18:05  [Source: ICIS news]

LONDON (ICIS)--European acrylonitrile-butadiene-styrene (ABS) producers are offering initial reductions of €20-30/tonne for October business following the €92/tonne drop in the feedstock styrene monomer (SM) October contract.

One producer said it has offered €20/tonne reductions to its customers, retaining some of the cost pass-through of the SM decrease to strengthen margins.

“We are going in to the market with minus €20/tonne. What I have seen so far is that others [producers] are following, some are going with a bit more, up to 40 euros [per tonne reduction].”

A second producer has finalised some early settlements at reductions of €35-45/tonne.

A third producer is discussing its October business on a case-by-case basis with its customers. It is looking to implement some increases in October based on higher September feedstock costs, and said it has already achieved some increases of €60-70/tonne. However, business done towards the end of the month had concluded at smaller increases of €20-30/tonne. Its November prices will be reflective of the October raw material movements, the producer said.

Buyers are pushing for larger reductions than producers' initial offers, wanting to take advantage of the larger-than-expected fall in SM, and the likely decrease in the acrylonitrile (ACN) October contract.

“Producers are offering less than expected… [but we are] pressing to have €40/tonne reduction,” a buyer said.

A second buyer said it had already achieved a €50/tonne reduction from one of its suppliers, with a third being offered a similar reduction, but this was due to higher-than-average increases in its September price, the buyer concerned said.

October price discussions continue.

By: Matt Tudball
+44 208 652 3214

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