FocusAsia ABS sellers hike prices to shore up margins; demand weak

28 November 2013 04:59  [Source: ICIS news]

By Clive Ong

ABS is used to make toys, appliances, consumer electronics, office equipment, and has applications in the automotive and construction sectors.SINGAPORE (ICIS)--Acrylonitrile-butadiene-styrene (ABS) suppliers in Asia appear determined to hike prices to keep a healthy margin in the face of rising feedstock costs, although demand is still in doldrums, market sources said on Thursday.

“Sellers are targeting $1,900/tonne (€1,406/tonne) and above, but buying ideas remained in the mid- to high-$1,800s/tonne,” a southeast Asia-based trader said.

On 22 November, ABS prices were assessed at an average of $1,880/tonne CFR (cost and freight) NE (northeast) Asia, up by $15/tonne from the previous week, according to ICIS.

Prices of feedstocks styrene monomer (SM) and butadiene (BD), on the other hand, have remained firm.

SM prices stood at $1,665/tonne CFR China on 27 November, while BD was assessed at $1,445/tonne CFR NE Asia in the week ended 22 November, according to ICIS data.

“SM and BD prices are rising, hence we have to try to raise prices of ABS to maintain our margins,” said a producer in southeast Asia.

A number of ABS producers have reduced operating rates at their facilities this month to prevent stocks from piling up, which could create a downward pressure on prices, market sources said.

Weak demand amid the year-end lull in manufacturing activities could dampen attempts by producers to hike prices.

“Buyers are not in a hurry to buy as most have completed their production of finished goods for the year,” said a Korean ABS producer.

ABS demand typically weakens in December, translating into softer market prices of the resins. Some dealers expect the market stay lacklustre into the first quarter of next year given a lack of a significant pick-up in the global economy, industry sources said.

Some end-users have sufficient inventories to tide them over any immediate requirements and are generally in no hurry to procure large parcels.

“Most buyers’ requirements are lower in November and December and sharply higher prices will curb demand even more,” said a buyer in China.

Demand for ABS could remain weak until the third quarter of next year, when the manufacturing season for exports begins.

ABS is used to make toys, appliances, consumer electronics, office equipment, and has applications in the automotive and construction sectors.

($1 = €0.74)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Clive Ong
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