European ABS producer targets €50-60/tonne Jan increase

03 January 2014 14:05 Source:ICIS News

LONDON (ICIS)--A producer in the European acrylonitrile-butadiene-styrene (ABS) market is targeting increases of €50-60/tonne ($68-82/tonne) because of higher feedstock costs, a market source said on Friday.

“We will go for €50-60 increase in January,” the producer said. However, it added that many players are absent from the market this week so it has to wait for next week to gauge buyer reaction to its numbers.

The January feedstock styrene contract price increased €35/tonne, and the January butadiene (BD) contract price was settled €10/tonne up from December. Propylene rose €20/tonne in January and ABS players said this will likely lead to acrylonitrile (ACN) prices rising by €20/tonne or more later this month.

The producer wants to pass on more than the feedstock composite costs because it kept prices largely stable in December, despite a €10/tonne rise in December styrene, and a €24-28/tonne increase in December ACN.

However, if Asian producers selling to European consumers keep prices stable from December levels, European producers may be pressured to reduce initial targets later in January. Asian suppliers have been offering consistently lower prices because of their need to shift excess volumes to the European market due to weak demand and over-supply in the Asian region.

“People will fight against the increase because [January] starts rather slowly, but they [producers] will try for an increase for sure,” an ABS buyer said.

The buyer added that a different producer had tried to pass on increases in December and some of its customers may be starting negotiations from a higher number, so are more likely to resist increases above feedstock costs.

The majority of ABS producers are expected to inform customers of pricing intentions next week when the market has returned from vacation.

By Matt Tudball