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ABS prices spike on new helmet ruling in China

by ChemOrbis Editorial Team -
  • 22/05/2020 (11:25)
On April 21, 2020, the Traffic Management Bureau of the Ministry of Public Security launched the "one helmet, one belt" campaign in China, ordering all electric bike riders to wear helmets.

The new ruling is to be effective on June 1 and it primarily aims to promote the use of helmets and seat belts for road safety.

According to media sources, there were around 250 million registered electric scooters in China as of June 2019 and it is assumed that the current number is higher than that with some unregistered ones.

Firmer helmet prices in China amid this traffic campaign have eventually led to higher raw material ABS prices.

New ruling’s immediate impact on ABS prices

China ABS market has been marginally increasing since around early May with support from robust demand and slightly higher spot styrene prices. This week, however, the uptrend has gained speed on the back of higher offers and transactions by several Northeast Asian producers.

In the local market, ABS injection prices have posted significant gains of around CNY1100-1700/ton ($154-238/ton) on a weekly basis as demand suddenly increased after the news about China’s “one helmet, one belt” campaign.

According to data from ChemOrbis Price Index, the weekly average of local ABS inj. prices has jumped 13% from last week, with prices currently standing at CNY11700-12100/ton ($1460-1510/ton without VAT) on ex-warehouse China, cash including VAT basis.

As for the import market, the overall range for ABS inj. prices have jumped $80-110/ton from last week to be reported at $1220-1310/ton on CIF China, cash basis. Import offers at/above $1300/ton CIF threshold for Northeast Asian origins have emerged for the first time since the second half of March.

“ABS offers have surged following the news on China’s urgent need for extra helmets in the midst of a new traffic campaign that mandates helmets for all e-bike riders,” a few company sources opined.

Meanwhile, some market players find the recent spike in the market speculative as prices are supported by an expected need for helmets rather than upstream or energy values. The recent news also shows that the government is taking strict measures against violation of helmet prices.
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