07 February 2014 10:15 [Source: ICB]
Traders expect demand to remain muted as orders for finished goods from the US and eurozone have not picked up
In the week ending 31 January offers for ABS were heard in the mid-to-high $1,900s/tonne CFR (cost & freight) Asia, up by $20-30/tonne from mid-January, according to ICIS data.
Suppliers were keen to improve margins as feedstock costs remained elevated. While key feedstock styrene monomer (SM) prices eased below $1,700/tonne recently, acrylonitrile (ACN) values stayed firm at above $1,950/tonne CFR NE (northeast) Asia. Butadiene (BD) prices were also steady at around $1,500/tonne CFR NE Asia.
Producers are trying to lift their margins and most have lower inventories this year after cutting back output since late last year.
“Most ABS makers are hoping to achieve $2,000/tonne to secure a better margin,” said a producer in southeast Asia.
The trade acknowledges that producers are aiming for higher values but casts doubts if a significant improvement in prices can be achieved amid the current lull season.
“Suppliers are perhaps trying to indicate the direction of prices post holidays by raising offers before [the] market closes,” said a trader in Hong Kong.
Demand in Asia continued to taper off with buying interest limited. A number of traders expect demand to remain in the doldrums into the second quarter as orders for finished goods from the US and eurozone did not pick up.
“Demand for ABS will stay weak into April at least as buyers are hesitant to commit as their order book is lean,” said a trader in southeast Asia.
The Chinese manufacturing season for exports typically straddles the months of July to October, hence ABS traders expect a slow pick-up in demand after the holiday.
“Orders for finished goods have not come in yet, so ABS consumption in March and April will likely be still weak,” said an end-user in China.
ABS is a resin used to make toys, appliances, consumers electronics and is used in the automotive and construction sectors as well.
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