Acrylonitrile-butadiene-styrene (ABS) suppliers in Asia continued to raise offers in a bid to improve margins, but price upside will be tempered by lacklustre demand, market sources said on 7 August.
A number of producers offered ABS at $2,020-2,060/tonne CFR (cost & freight) China that week, with others seen quoting $1,970-1,980/ tonne CFR China for the material.
After enduring weak profits since the start of the year, ABS makers appeared determined to achieve some margins in the second half of the year. “Offers have increased by some $20-30/tonne this week,” said an end-user in southern China. Securing parcels has become difficult for buyers at below $1,950/ tonne CFR China, buyers said.
While sellers managed to push through some price increments in www.icis.com
August, they acknowledged that demand remained lacklustre in Asia. Despite the current manufacturing for exports season in China, buying momentum for resins, including ABS, has stayed weak.
“The uneven global economic expansion has resulted in weak demand for Asia made goods,” a Hong Kong-based resins trader said.
Order volumes for finished goods remained lower than previous years with end-users mostly buying on a need-to basis. At the same time, credit and financing problems in China have constrained trade and activities of medium to small-sized companies. “Financing problems have slowed the resin trade in China as buyers have less liquidity,” said a trader in China.
While spot prices have increased to the high-$1,900/tonne CFR China levels, with some parcels sold at above $2,000/tonne CFR China, traders expect further gains to be limited because of tepid demand.
“Prices should hover at current levels for a while after the recent increase as demand from users are still quite soft,” said another trader.
With feedstock styrene monomer (SM) prices and butadiene (BD) trending lower recently, some ABS buyers have delayed commitments on the possibility that the uptrend in resin prices could reverse in the near term, market sources said.
SM prices declined to the low-$1,600/tonne CFR China levels in early August, while BD values dipped to $1,500/tonne CFR NE Asia.
ABS is a resin used to make toys, appliances, consumer electronics, and has applications in the automotive and construction sectors.