07 November 2013 04:54 [Source: ICIS news]
By Clive Ong
SINGAPORE (ICIS)--Spot acrylonitrile-butadiene-styrene (ABS) prices in Asia appeared to have stabilised after last week’s sell-off, but weak demand may continue to weigh on the market for the rest of the year, industry sources said on Thursday.
On 1 November, ABS prices were assessed at $1,840-1,890/tonne(€1,362-1,399/tonne) CFR (cost and freight) China, down by an average of $25/tonne from the previous week, according to ICIS data.
A supplier was seen offloading material at a massive discount last week in an attempt to clear its October stocks, selling ABS at around $1,820-1,830/tonne CFR (cost and freight) China, prompting other sellers to follow suit, market sources said.
“Prices have come off sharply since last week, with sellers quoting below $1,900/tonne,” a Taiwanese supplier said.
This week, however, lower priced parcels have been concluded, with spot prices hovering in the mid- to high- $1,800/tonne levels CFR China as parcels in the low-$1,800/tonne CFR China levels became limited, market sources said.
“Prices are holding steady this week after last week’s downdraft but demand is still weak,” said Hong Kong-based trader.
Weak demand is expected to stay for the remainder of the year, as production of finished goods for exports has mostly been completed, market players said.
ABS is a resin with applications in toys, electronics, appliances, as well as in the automotive and construction sectors.
“Perhaps some buying interest will re-surface in late December as end-users usually stock up resins ahead of the Lunar New Year,” said a trader in China.
The Lunar New Year falls on 31 January 2014.
Some market participants are expecting the weak ABS demand could continue into the first quarter of 2014 amid dismal improvement in global economic growth.
ABS producers are fretting over thinning margins because of firm prices of feedstocks styrene monomer (SM), acrylonitrile (ACN) and butadiene (BD), industry sources said.
Last week, SM prices were hovering at around $1,650/tonne CFR China, while ACN and BD prices stood at around $1,850/tonne CFR NE Asia and $1,700/tonne CFR NE Asia, respectively, according to ICIS data.
“We need prices of ABS at around $1,950/tonne” to generate margin, said a Korean maker.
($1 = €0.74)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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