Asia ABS steady after recent rout; producers reduce output

SINGAPORE (ICIS)–Asia’s acrylonitrile-butadiene-styrene (ABS) market was stable this week, following recent tumbles, as buyers emerged from the sidelines to pick up some cargoes.

The resins were deemed to be trading at an attractive discount after recent slippages.

Spot prices remained mostly at $1,850-1,950/tonne CFR (cost & freight) NE Asia this week, according to ICIS data.

Some suppliers, on the other hand, are reducing operating rates at their plants citing eroded margins from the recent ABS price falls.

“A number of makers are cutting output as margins are thin,” said a Taiwan-based producer.

ABS resins are used for appliances, consumer electronics, toys, and has applications in the automotive and construction sectors.

Supply of ABS in Asia is expected to tighten in the near term. Apart from production cuts, two producers in China are scheduled to conduct plant maintenance in the first half of August.

A number of producers welcomed the reduction in supply as prices could stabilise when availability is reduced.

“A decrease in supply would have the market find its footing,” said a trader in China.

With the third-quarter manufacturing-for-exports in China kicking off, demand for ABS usually picks up.

However, the ongoing trade war between the US and China has cast a pall over market activity this year. The additional list of tariffs on China-made products included appliances, a key segment for ABS resins.

“The trade war will continue to weigh on sentiment in the near term,” said southeast Asia-based producer.

Focus article by Clive Ong

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Picture: Refrigerators and washing machines. Acrylonitrile-butadiene-styrene (ABS) resins are used for appliances. (Photographer: Alex Segre/REX/Shutterstock)