21 March 2014 23:59 [Source: ICIS news]
LONDON (ICIS)--European acrylonitrile-butadiene-styrene (ABS) prices for March freely negotiated domestic business fell €10-20/tonne because of the €57/tonne drop in the March feedstock styrene contract, sources said on Friday.
Both buyers and sellers said discussions were tough this month because producers were keen to try and recoup lost margin by initially targeting rollovers, with arguments for stable prices helped by an €80/tonne increase in the March butadiene (BD) contract.
“We went out in the market with a stronger approach to March because of good demand [in January and February],” a producer said.
However, due to strong resistance from buyers, it had to settle its business at a reduction of €15/tonne on average.
Buyers resisted producers' attempts at rollovers, and were successful in getting reductions from suppliers in the region of €10-20/tonne on average.
“We have some reduction, but it was a hard fight to get [it],” a buyer said.
There were exceptions reported in the market, however. Rollovers from some suppliers, confirmed by a buyer, were heard, as well as reductions of up to €35/tonne reported from one buyer, although this was likely due to the buyer starting negotiations at higher prices than others in the market.
Demand levels for some in the market improved mid-month, with several producers seeing good volumes shifting this week. A distributor attributed better demand levels to possible inventory building ahead of April as some buyers in the market expect higher raw material costs next month.
“For the time being, [the market is] pretty good, fine on demand,” a second producer said.
“Now maybe the question will be April and May with the bank holidays in Europe. But hope we'll keep this [March’s demand] trend,” the producer added.
The Easter holidays on 18-21 April, together with public holidays in the first half of May, could see demand slow a little in coming months.
Supply was also said to be limited by some players, with several buyers seeing limited availability from suppliers, or were told delivery times would be extended by 1-2 days because of limited availability.
“We tried to get some more material about 10-12 March [from European suppliers], and also Asian suppliers were sold out,” a distributor said.
“I think in Asia it’s a reduction of production, in Germany might be as well a little bit, but people expect increase [in feedstock styrene] in April, so rather pre-buy now,” the distributor added as an explanation to why producers may be short of product.
Asian producers cut back ABS production capacity in 2013 because of weak demand in the domestic market.
Prices for compounding grade were assessed at €2,165-2,185/tonne free delivered (FD) northwest Europe (NWE), injection moulding natural grade at €2,265-2,280/tonne FD NWE, and extrusion grade at €2,190-2,280/tonne FD NWE according to ICIS.
Follow Matt on Twitter: @ICISMattTudball
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