Price and market trends: Asian ABS producers gaining EU market share

02 June 2014 00:00 Source:ICIS Chemical Business

Acrylonitrile-butadiene-styrene (ABS) producers from South Korean are gaining European market with attractive prices and good quality material, sources said on 22 May.

Data released from European statistics agency Eurostat shows March imports into the EU rose 35% year on year compared to the period in 2013.

South Korea benefits from a 1.5% import duty rate as part of the Free Trade Agreement (FTA) between the country and the EU. The duty will reduce to zero as of 1 July 2014 as part of the FTA.

Over recent weeks, players in the European ABS market have said South Korean producers are being particularly aggressive in gaining market share from European suppliers, especially in the injection moulding market, with several market sources mentioning South Korean producer LG.


“In coloured ABS they have no competition, no one can compete against LG. In the electronics and white goods [market] they are supplying at €1,800/tonne,” a buyer in the south of Europe said. It was not clear if the price quoted was a free delivered (FD) or cost and freight (CFR) price, however.

“Asian [suppliers] are still very aggressive in southern Europe, Italy [in particular]. There is almost a price fight going on right now,” a major European producer said earlier in the month.

This may signify a step-change in their European strategy for LG in 2014, as they expand market share.

Despite the long delivery time of approximately six weeks, buyers in Europe are prepared to wait in order to get lower prices. It is likely that some Asian suppliers have an almost continuous flow of material on the water so they can serve European buyers with minimal delay.

The reason for all this product coming to Europe from South Korea is because Chinese domestic ABS production capacity is has now reached a level where it can easily serve Chinese domestic needs.

Previously China was the key export market for South Korean producers such as LG, which has a nameplate capacity of 560,000 tonnes/year, and Samsung, with a nameplate capacity of 460,000 tonnes/year according to ICIS Plants and Projects data. However, now that China has become self-sufficient in terms of ABS production, together with Chinese exports of finished goods to the US and EU markets declining, South Korean, as well as Taiwanese producers – Taiwan’s Chi May Corporation has a nameplate capacity of 1m tonnes/year – have to find new outlets for their excess material.

While there are many other markets for Asian producers to focus on, including emerging markets like Turkey and Russia, Europe remains attractive because it is well established and buyers there are keen to benefit from cheaper supply.

By Matt Tudball