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ABS reverses losses after 8 weeks in Asia; will upturn be sustainable?

by Pınar Polat - ppolat@chemorbis.com
  • 20/07/2021 (06:23)
In China and Southeast Asia, ABS prices reversed the course last week after two straight months of declines. This was with support from strong crude fundamentals, which in turn boosted styrene feedstock prices.

Moreover, buying interest also displayed an uptick although the volume of transactions remained limited due to ongoing buying resistance to regional suppliers’ attempts to hike offers. The buying sentiment continued to be weighed down by the coronavirus outbreaks and rising infections in various Southeast Asian countries, as well as some Chinese provinces, in the meantime.

Import - ABS Price - CIF China - CIF SEA

During the week that ended on July 16, import ABS inj. prices for overall origins in China and Southeast Asia rose by $20-30/ton on the week to be assessed at $2350-2390/ton and $2360-2400/ton CIF, cash, respectively.

ChemOrbis Price Wizard shows that spot styrene monomer prices were largely flat on the week at $1236/ton CFR China and $1216/ton FOB Korea on July 16.

Resistance grows on buyers’ side

A trader said, “Despite the ongoing tightness, market players report that there has been a growing resistance on the buyers’ side, particularly towards the high ends of the prevailing market levels.”

Meanwhile, a domestic producer in China kept its ABS inj. offers to the local market as of early this week after hiking offers by CNY100/ton ($15/ton) last week.

Sustainability of the upturn under discussion

Market players in Asia have remained cautious regarding how long this recent upturn will last. While ABS supply remains limited in the region, slow demand recovery within China and Southeast Asia is likely to counterbalance this factor.

Additionally, crude oil futures have had a weak start to the week amid concerns over a rise in supply following an OPEC+ deal and the rapid spread of the Delta variant of the coronavirus. At the time of writing, Brent oil hovered at $68.21/bbl, while West Texas Intermediate (WTI) crude stood at $66.01/bbl, both sharply below Friday’s close.

The changes in crude oil futures impact the future direction of styrene and accordingly ABS prices.
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