Asian ABS markets shrug off surging crude
Last week, Brent crude oil prices breached $81/bbl for the first time in almost four years and hit their highest levels since November 2014, based on a weekly average. WTI crude oil futures also increased to their 12-week high.
However, bullish energy prices were not reflected in the downstream markets as spot butadiene prices on CFR China basis plunged to their lowest levels since around late April while the spot styrene market in Asia continued to track a mostly volatile trend.
Apart from weak costs, the third round of US tariffs on Chinese goods also weighed down on the ABS markets since the new tariffs include various appliances and automotive, electronics and construction applications, which are mostly made of ABS resins.
Accordingly, a South Korean producer applied weekly decreases of $20-30/ton on its ABS offers to Indonesia while a Southeast Asian producer cut its listed prices significantly by $90/ton to China and the regional markets.
“The ABS market is defying stronger crude oil futures as trade war fears have been more effective in determining the tone of the market recently,” traders opined.
According to data from ChemOrbis Price Index, the weekly average of ABS prices on CFR China basis reached its lowest level since July 2017 while the Southeast Asian market continued to hover around its 14-month low last week.
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