Price and market trends: Asia ABS, SAN producers cut prices to attract buyers

07 March 2014 10:50 Source:ICIS Chemical Business

Some Asian acrylonitrile-butadiene-styrene (ABS) and styrene-acrylonitrile (SAN) producers have reduced prices in a bid to draw buyers forward, according to traders and suppliers on 25 February.

Makers of the resins have reduced their offers by some $30-40/tonne CFR (cost & freight) NE (northeast) Asia since the week ended 21 February as demand remained lacklustre after the Lunar New Year holidays.

Offers of ABS and SAN were cited in the low-to-high $1,900s/tonne CFR Asia, but buying interest did not show signs of a revival.

“End-users still have some inventories to meet near-term requirements and hence most do not need to stock up immediately,” said a trader in Hong Kong. However, traders expect end-users to start replenishing stocks in March.

Orders for finished goods flowed in slower than expected to Chinese factories. Resin suppliers conceded that demand might stay tepid into the later part of the second quarter.

The recent downdraft in the average key feedstock styrene monomer (SM) price to below $1,600/tonne CFR China for the week ended 14 February also weighed on ABS values. Some suppliers acknowledged that prices hike initiatives in the first half of February were largely unsuccessful and have reduced their offers to reflect market conditions. “The reduced offer prices are closer to the spot market transaction levels,” said a resins producer in Taiwan.

However, demand remained weak as buyers continued to wait and see. Some buyers expect further slippages in prices and hence delayed commitments in hopes of securing some parcels at even lower numbers. Some sellers, however, were not keen to reduce prices further as other feedstock acrylonitrile (ACN) prices remained elevated at above $2,000/tonne CFR NE Asia.

“Most ABS producers will want prices at $2,000/tonne to achieve a decent margin but current demand is too soft,” said a trader in southeast Asia.

By Clive Ong