Asia ABS steady after recent decline, near term improvement likely

Source: ICIS News


SINGAPORE (ICIS)--Asia’s acrylonitrile-butadiene-styrene (ABS) demand remained lacklustre this week although some sellers expect a potential improvement in the near term.

After tumbling in recent weeks from the fall-out of the US-China trade war, ABS prices mostly hovered in the low $1,900s/tonne CFR (cost and freight) N.E. Asia, ICIS data showed.

The rising spectre of trade war with the US has cast a shadow on several businesses in China.

“Buyers are still hesitant to commit, especially to larger parcels,” said a trader in China.

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

Buying response has been lukewarm so far to higher offers.

Nonetheless, some sellers expect a potential recovery in demand in the near term, should a trigger emerges.

Some production cuts could take place if margins remain eroded by the recent price falls and elevated feedstock styrene monomer (SM) and acrylonitrile (ACN) values.

“Margins are thin at current resin prices,” said a producer in Taiwan.

Some maintenance shutdowns in China in August are expected to constrain supply in the market as well, which could spur buyers forward.

PetroChina Daqing Petrochemical shut its 100,000 tonne/year ABS unit on 29 July for nearly two months while Zhenjiang Chimei Chemical shut its 820,000 tonne/year ABS unit on 25 July for seven to eight days for reasons not known.

“If supply starts to dwindle, some buyers might emerge from the sidelines,” said a trader in Hong Kong.

Meanwhile, butadiene (BD) feedstock prices have started to rebound this week after recent weak performance.

If all feedstock costs continued to climb, buyers of ABS might return to the market to stock up some material on concerns that resin prices would climb again.

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Focus article by Clive Ong