FocusAsia ABS prices rise as China strengthens buying momentum

03 December 2013 07:09  [Source: ICIS news]

By Clive Ong

SINGAPORE (ICIS)--Asia acrylonitrile-butadiene-styrene (ABS) prices gained ground this week as some buying interest emerged out of China though long-term prospects remain unclear, traders and producers said on Tuesday.

Spot ABS prices were said to be in the highs of $1,800s/tonne (€1,332/tonne) to the lows of $1,900s/tonne CFR China, around $20/tonne higher than last week, market sources said.

“The buying interest is likely from some end-users replenishing inventories,” said a trader in Hong Kong.

The Asia market is currently in a lull season with most of the production of finished goods  completed for the year.

However, many users have purchased limited stocks over the past weeks and were now seeking parcels since prices have stabilised.

“End-users mostly have low stocks and there should be some buying interest since prices appear to be moving up,” said a producer in southeast Asia.

Buoyant feedstock styrene monomer (SM) and butadiene (BD) values have also prompted ABS makers to target higher resin values in order to maintain workable margins.

SM prices rose to $1,700/tonne CFR China on 3 December, up from $1,650/tonne CFR China a month ago.

BD prices rose above $1,500/tonne CFR NE Asia for the week ended 29 November, up  from $1,425/tonne CFR NE Asia in mid-November.

“Suppliers have to try for higher prices as feedstock costs have increased,” said a producer in Taiwan.

Also, a number of ABS producers have also cut back operating rates at their plants in November as demand was weak. Consequently, availability of the resin has tightened and suppliers are keen to achieve higher prices.

With the global economic outlook staying largely weak, a number of traders suspected the improved buying momentum for ABS to be short lived. Key sectors of ABS include appliances and consumer electronics as well as automotives.

“It is unclear if the buying interest seen this week is sustainable since the overall market is in a lull period,” said a trader in China.

The Chinese exports sector typically remain in a lull until after the second quarter each year when production of finished goods start to pick up.

ABS producers in Asia include Chimei Corp, Formosa Chemicals & Fibres Corp, LG Chem, Kumho Petrochemical and Cheil Samsung.

($1 = €0.74)

By: Clive Ong
+65 6780 4359

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