ABS year-on-year imports largely unchanged - Eurostat

03 March 2014 16:27 Source:ICIS News

Focus article by Matt Tudball

LONDON (ICIS)--Full-year imports of acrylonitrile-butadiene-styrene (ABS) into the EU in 2013 were only 1% lower than the previous full-year total in 2012, according to the latest data released by statistics agency Eurostat.

In the same data release, December year-on-year imports were down only 2%.

EU ABS imports and exports December 2012 vs. December 2013 (Eurostat, tonnes)

 

December 2012

December 2013

% change

Imports

10,790

10,610

-2

Exports

10,019

8,522

-15

EU ABS imports and exports 2012 vs. 2013 (Eurostat, tonnes)      

 

Full year 2012

Full year 2013

% change

Imports

152,827

151,892

-1

Exports

127,070

117,478

-8


Eurostat import/export data is subject to revision as more detailed information becomes available. EU figures comprise the aggregate of member states data published by Eurostat. Full-year 2013 year-on-year figures comprise the aggregate of the monthly figures published by Eurostat.

The data may be of some comfort to European ABS producers who have continually faced pressure from cheaper ABS imports from Asia, and in particular, South Korea.

South Korea signed a Free Trade Agreement (FTA) with the EU in July 2011, which eliminated import duty on some imports, such as styrene acrylonitrile (SAN), and gradually reduced import duty on others. Import duty on South Korean ABS currently is 1.6%, but on 1 July 2014, all import duty on ABS will be abolished.

Of the 152,827 tonnes of ABS imported into the EU in 2012, 92,241 tonnes came from South Korea, according to Eurostat data. Figures for South Korean imports in 2013 are not currently available.

South Korea and Taiwan make up the bulk of Asia’s ABS production, the majority of which historically was exported to China for use in the manufacturing of electronic and consumer goods. Chinese ABS demand dropped post-2008 because demand from key export markets in the US and the EU fell significantly after the economic crisis.

At the same time, Chinese domestic ABS production capacity has increased to a point where Chinese domestic production can now meet domestic demand levels, leaving little room for imports from Taiwanese and Korean suppliers.

Taiwanese and Korean suppliers have had to find alternative markets to which they can export excess materials, with Europe being one of them. However, due to the mature nature of the European market, Asian producers have to be careful not to cause too much disruption by offering low prices which could destroy the current market in Europe.

However, Asian ABS often sells for €100/tonne or more below that of European produced ABS, with the only limiting factor being the 6-8 week delivery window, during which European prices could drop below the price paid for Asian material.

The presence of Asian material in the European market does put some pressure on some European producers to keep price increases to a minimum, often in line with European feedstock styrene, butadiene (BD) and acrylonitrile (ACN) movements.

In February, one European producer that does not compete directly with Asian suppliers targeted a €50/tonne increase for February freely negotiated business. A second European producer targeted an increase of €40/tonne, but because of direct competition from Asian producers, settled the majority of its February business at a €20/tonne increase, just slightly above the combined costs of the feedstock increases.

Rather than start a price war with European producers, Asian suppliers are looking to new markets such as Russia and Turkey.

According to European sources, Asian suppliers have been aggressively targeting the Russian market, and that Asian material accounts for approximately 80% of ABS in Russia. Asian producers are willing to sell at cost plus freight into Russia in order to establish themselves in the market and to shift excess volumes.

In Turkey, Asian suppliers hold approximately 70% of the ABS export market, with South Korea benefiting from a FTA signed with Turkey in May 2012. Freight rates and times to Turkey are less than to northwest Europe, and Turkey is still a growing market, despite recent economic and political issues in the country seeing the lira slide dramatically against the US dollar in 2014.

So while the European market may be having a small respite from increased Asian imports, Asian suppliers continue to aggressively target other emerging markets in order to try and shift excess volumes resulting from massive overcapacity in the Asian region.

By Matt Tudball