SINGAPORE (ICIS)--Asia acrylonitrile-butadiene-styrene (ABS) prices lost further ground as sellers slashed offers in response to weaker feedstock costs.
Key feedstock styrene monomer (SM) prices slumped to the low $500s/tonne CFR (cost and freight), while acrylonitrile (ACN) and butadiene (BD) markets were also under downward pressure.
Lower feedstock markets prompted ABS buyers to expect lower resin values in the near term.
Finished goods export demand for ABS is unlikely to recover with the deadly spread of coronavirus and as more countries go into a lockdown to stop infections to multiply.
Spot prices declined to the low $1,100s/tonne CFR NE Asia, from around $1,200/tonne CFR CFR NE Asia last week, ICIS data showed.
While ABS plants in China ramped up output after the coronavirus outbreak appeared to have come under control, demand for finished goods orders was simply not there.
“Some clients in Europe and the US have cancelled orders over the spread of the coronavirus and the resultant lockdowns are paralyzing supply chains,” said a trader in China.
ABS is the largest volume engineering thermoplastic resin and is used in automobiles, electronics, appliances and recreational products.
With Chinese workers streaming back to factories from the first half of Mach as the central government tried to kick-start its economy, things were initially looking up.
However, the worsening conditions of the coronavirus spread across other regions of the globe has put a dampener on economic growth and demand.
“Our expectations initially was for some recovery in demand for chemicals in April, but now the worsening coronavirus situation is Europe and the US will likely impact Asia demand and delay its recovery to some degree,” said Jenny Yi, senior analyst for the aromatics chain at ICIS.
ABS which is used for many finished goods like appliances, toys and consumer electronics has been hit as export destinations in Europe and the US are now battered by the coronavirus.
“The negative impact on Chinese exports will have repercussions on resins like ABS and consequently the upstream chemical markets,” Yi added.
China imports around 2m tonnes of ABS each year.
Focus article by Clive Ong
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