Asia’s ABS prices likely to remain weak on slow demand

5 June 2014 | Clive Ong

SINGAPORE (ICIS)--Asia’s acrylonitrile-butadiene-styrene (ABS) prices are likely to remain weak amid persistently slow demand in the region and slippages in feedstock styrene monomer (SM) values, traders and producers said on Thursday.

Spot SM prices to below $1,570/tonne CFR (cost & freight) China on 4 June amid mounting inventories along the eastern China shore tanks. SM spot inventories were estimated on the same day at around 168,500 tonnes, up by 15,900 tonnes week on week, according to ICIS data.

"The high SM stocks continue to point to weak offtake from the styrenic resins sector", said a resins producer in southeast Asia.

While most ABS suppliers kept offers unchanged this week in the low-to-high $1,900s/tonne CFR northeast (NE) Asia, a number of traders lowered offers in a bid to engage buyers.

"We received offers this week that were $10-15/tonne lower than previous quotations," said an ABS user in southern China.

Spot ABS lots were heard available in the high $1,800s/tonne CFR China and Hong Kong this week.

Recent weak economic data out of China continued to suggest that the world's second largest economy has not yet attained escape velocity.

The country’s official purchasing managers’ index (PMI) reading for May stood at a five-month high of 50.9, but remain just slightly above the 50 threshold that indicates an expansion in the economy, while the investment bank HSBC’s final May PMI reading for China still denotes a contraction at 49.4.

"With China's growth still stagnant and uneven economic growth in the US and the eurozone, demand for Asia made finished products will stay weak," said an ABS trader in China.

Others pointed to the tight credit conditions in the mainland as factors hampering the resins trade and curbing ABS demand, on top of lower consumption of ABS due to weak external demand of finished goods.

"There are issues with financing in China and traders and end-users continue to be affected," said an ABS producer in Taiwan.

Traders and users continue to buy on a need-to basis and most preferred to maintain lean inventories in view of uncertain demand in the near term.

"Most users are buying sufficient resins to fulfill their production needs and no more; and few are stocking up especially when prices are on the down trend," said a trader in Hong Kong.

Major producers in northeast Asia include Chimei Corp, Formosa Chemical & Fibre Corp, Cheil Samsung and LG Chem.

ABS is a resin used to make toys, consumer electronics, appliances as well as in the automotive and construction sector.


About ICIS

ICIS is the world's largest petrochemical market information provider and has fast-growing energy and fertilizer divisions. Our aim is to give companies in global commodities markets a competitive advantage by delivering trusted pricing data, high-value news, analysis and independent consulting, enabling our customers to make better-informed trading and planning decisions. We have more than 30 years' experience in providing pricing information, news, analysis and consulting to buyers, sellers and analysts.

With a global staff of more than 800, ICIS has employees based in Houston, Washington, New York, London, Montpellier, Dusseldorf, Karlsruhe,Milan, Mumbai, Singapore, Guangzhou, Beijing, Shanghai, Yantai, Tokyo, Perth. ICIS is a division of Reed Business Information, part of Reed Elsevier Plc.

About Reed Business Information

At Reed Business Information we provide information and online data services to business professionals worldwide.  Customers have access to our high-value industry data, analytics, information and tools. Our strong global brands hold market-leading positions across a wide range of industry sectors including banking, petrochemicals and aviation where we help customers make key strategic decisions every day.  RBI is part of Reed Elsevier, a leading global provider of data, information and solutions for professional customers.

Phosphates market in anticipation ahead of IFA conference next week

...market is stable to firm this week, with limited activity ahead of the International Fertilizer Industry Association (IFA) conference in Istanbul from 25... Fri, 22 May 2015

Mideast petchem players cautious after Persian Gulf incident

...support against possible threats that Iran poses to the Middle East. Saudi Arabia and Iran are perceived to be engaged in a proxy war in Yemen, which... Thu, 21 May 2015

Borealis margins up on crude, Europe demand improving - CEO

...than those of polymers, returning improved margins, the CEO of the Austria-headquartered polymers and fertilizers producer said on Monday. Mark Garrett... Mon, 18 May 2015

US chemical, other industries press Congress on rail freight reform

...Forest & Paper Association, the American Public Power Association, the Fertilizer Institute, the National Association of Chemical Distributors (NACD), steel... Wed, 13 May 2015

Germany’ K+S Q1 net income up 32% to €164m on price recovery

...year on year, on the back of a price recovery in the potash and magnesium markets, with sales up 16% to €1.38bn, the German fertilizer firm said on Tuesday.... Tue, 12 May 2015

ICIS News:
Immediate insights into chemical markets

React quickly to real-time breaking news and maintain your competitive advantage in this dynamic industry.

ICIS news provides you 24 hour global coverage. Our expert editors bring you the latest market moves, capacity, shutdowns, analysis, data and more for over 180 commodities. The service is reliable, independent, authoritative and customized to your needs.