Asian ABS players turn cautious after recent rally
Chinese import market up 7% since mid-June
Import ABS market logged the fifth straight week of gains last week, with additional increases from South Korean and Taiwanese producers. Data from the ChemOrbis Price Index showed that the weekly average of import ABS prices gained more than 7% since the start of the uptrend.
Although the recent rally was mainly driven by lower stock levels and narrow margins, players also pointed to re-stocking activities.
SEA market ends last week at highest in 2 months
According to ChemOrbis Price Index, the import ABS market in Southeast Asia ended last week at its highest since the middle of May. Gains were largely supported by restocking activities, particularly in the Vietnamese and the Thai markets. However, players reported that the overall demand remained muted despite the uptick in replenishing activities.
Will streak of gains snap?
After the gains seen last week, the Asian players have started discussing the various factors that can drive the market in different directions. Some players pointed to a relative stability for near-term, saying that most buyers already restocked last week, and some highlighted that end-product demand has not improved substantially.
Sentiment already falters inside China this week
A trader reported that they revised their offers slightly by CNY50/ton on the high end on Monday. Another trader argued that the sentiment softened and the ABS market will fluctuate somewhat in the near term.
Weaker upstream costs also cast shadow on ABS outlook
As of the middle of last week, spot ACN prices plunged more than $100/ton while domestic butadiene prices in China kept largely still stable. On top of this, spot styrene prices in Asia moved slightly downwards by the end of last week despite the strengthening feedstock prices.
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