Demand concerns emerge in European ABS market

11 October 2013 17:11  [Source: ICIS news]

LONDON (ICIS)--Producers in the European acrylonitrile-butadiene-styrene (ABS) market are dropping October price targets because of lower-than-expected demand, market sources said on Friday.

One producer said it has had to reduce its initial €20/tonne ($27/tonne) target from last week because other European suppliers have put lower offers into the market.

“We have not always achieved the minus €20/tonne we were targeting. In most cases it was €30-50/tonne [down] because of competition [from other European suppliers],” the producer said.

Two other producers have offered prices at the same levels as August, a buyer said.

“Two [suppliers] who had higher prices [in September] came down €80/tonne…and [are] now back to August levels,” the buyer said.

It added: “A couple [of suppliers] were complaining about demand in October. They are afraid of higher stock levels [going into the fourth quarter], and LG and Samsung,”  referring to cheaper South Korean material.

Asian imports, which are a regular presence in the European market, may start to increase as Asian producers try to sell extra volumes to Europe because of weak demand in Asia. Demand in the key Chinese ABS market is subdued as it enters the traditional year-end lull season, following lower-than-expected demand in the quarter three manufacturing season.

“One [European producer] has hinted it’s a bit quiet and also struggling with Asia. Asian prices are going to start to come off. [Asian producers] have already lowered their offers,” a second buyer said.

A weakening dollar also makes Asian material more attractive to European buyers who are prepared to wait the six weeks for product to arrive from South Korea.

European demand levels have been fairly flat throughout most of 2013, with price movements being driven almost exclusively by feedstock costs.

Players in the European market are also watching feedstocks closely for signs of fourth-quarter activity, particularly butadiene (BD), as spot export prices have continued on the uptrend to a 19-week high, driven by limited European supply and firm Asian demand.

By: Matt Tudball
+44 208 652 3214

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