HOUSTON (ICIS)--The US acrylonitrile butadiene styrene (ABS) and polycarbonate (PC) markets are expected to remain relatively steady as participants do not anticipate significant changes in supply and demand fundamentals ahead of the International Petrochemical Conference (IPC).
Market players anticipate the second quarter to follow a similar trend to the first quarter, in which demand for ABS and PC has been described as fair-to-solid.
Some producers said that they have seen demand meet forecast to date, expressing optimism for 2014 when compared to 2013.
Others said that their performance in the first quarter has come in below plan and that they are working in the second quarter to recapture volumes that they lost.
Meanwhile, one compounder said that its first quarter is going to be slightly below budget, although it felt much of this was due to the long, cold winter.
Market participants are hoping issues related to the cold weather have cleared up so that production and logistics are longer at risk for disruption.
Looking ahead, demand for ABS and PC are typically stronger during the third and fourth quarters.
Downstream demand for consumer products are fairly steady all year, with an uptick during the winter holiday season, according to market sources. Demand in the construction sector is weighted to the first half, while automotive demand is stronger in the second and fourth quarters.
From a pricing standpoint, US ABS and PC prices both have risen by several cents/lb since the start of the year.
Rising feedstock costs, particularly for upstream benzene, have been squeezing producer margins, prompting suppliers to seek price increase initiatives for January and February.
ABS producers had announced price rises of 4 cents/lb, which buyers agreed they were able to implement. Two producers had sought second increases initiatives of another 4 cents/lb, but they were only able to push the full amount through some markets, mostly because there was a lack of industry support for the price hike.
Meanwhile, PC prices had risen by about 5 cents/lb after market participants confirmed that producers were able to get a portion of their announced increases of 7 cents/lb or 8 cents/lb.
Sources in both markets said that they expect prices to remain steady unless there are significant changes in feedstock costs.
ABS and PC are engineering plastics that are used in a wide range of applications, such as body panels and interior parts in the automotive, components in computers and electronics, casings for optical media, toys and other consumer products, as well as some building material used by the housing and construction industries.
Major North American producers of ABS include INEOS ABS, SABIC, Styrolution and Styron.
Major PC producers include Bayer MaterialScience, SABIC and Styron.
Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place 30 March through 1 April in San Antonio, Texas.
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