OUTLOOK '18: US ABS/PC demand should strengthen from auto sector

Source: ICIS News


HOUSTON (ICIS)--A continued effort to make US automobiles lighter should keep demand for acrylonitrile-butadiene-styrene (ABS) and polycarbonate (PC) strengthening.

The push for lighter-weight vehicles remains tied to increased fuel efficiency standards, which could see reduction efforts focused on vehicles produced in 2022.

Until then, however, strong automotive demand in the US is expected to keep ABS and PC demand strong in 2018.

Demand from the construction sector for PC and from the consumer electronic sector for ABS is also expected higher, but at similar levels to overall gross domestic product (GDP) growth.

US January ABS prices in the freely negotiated contract market are expected to be fairly flat based on current feedstock styrene prices.


ICIS feedstock styrene spot prices jumped by 6 cents/lb ($132/tonne) during the first half of November in sympathy to feedstock benzene. However, spot prices have only firmed by another 1.81 cents/lb since that time.

The monthly price movement of raw material contracts determines the ICIS cost-plus methodology for ABS prices.

China is expected to remain the global driver of ABS consumption and production, with over 50% of the world’s consumption and one-third of production.

For PC, producers are likely to seek some margin expansion at the start of the year, owing to recent spikes in feedstock benzene and phenol.


Freely negotiated prices have been steady for much of the second half of the year, but formula-based prices and feedstock costs have risen by 7 cents/lb since September, with December expected up by another 5-6 cents/lb.

PC supply should stay largely steady in 2018, although phenol availability will tighten on a plant cutback in early 2018.

Sources said they expect PC producers in the US to continue to receive all desired levels of feedstock material, however.

Imports from Asia are expected to remain limited through the first half of 2018, owing to tight supply in the region.

The global PC market will start 2018 in a tight supply situation, stemming from multiple production outages throughout 2017.

This is expected to create leverage for US producers to pass through Q4 production cost increases to formula-based and freely negotiated contract customers.

Additional reporting by David Love