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Asian buyers and sellers are at odds for Dec ABS outlook

  • 16/11/2016 (03:37)
In Asia, import ABS prices were on a bullish trend since late October on the back of then-higher crude oil prices which hovered at around $50/bbl on NYMEX. Soaring spot butadiene and ACN costs in the region coupled with supply constraints pushed China’s downstream ABS market up. However, recent falls in the upstream chain caused players to question this week whether sellers’ firmer targets based on limited availability will prove sustainable or not over the coming term.

In China, import ABS prices saw their highest levels since June 2015, according to ChemOrbis Price Index. A Taiwanese ABS producer described demand as normal this week while supply was tight. “This is because butadiene and styrene costs surged a lot in the previous weeks before seeing corrections later which caused producers to cut their operations at that time. Our availability is not sufficient either these days,” a producer source noted.

A Southeast Asian producer was mostly sold out similar to many other sources for November. “There should be some demand from Chinese end-users in the November-December period for new year preparations, although, buyers are showing resistance to the prevailing offers,” the producer said.

A trader lifted its ABS injection offers by $20-30/ton for Taiwanese cargos, as was already expected by players. “Styrenics markets are holding strong in China amidst higher prices from October. A Taiwanese ABS producer applied further price increases to the market as overall availability is still considered tight,” said another seller.

A manufacturer in the country reported that the market is on an upwards trend while he is not interested in making fresh purchases beyond his basic needs at current price levels. Another buyer noted, “Styrene costs declined by nearly $35-40/ton late last week, while domestic styrene prices were down in China as well. We are not that optimistic about the market outlook for next month.”

“There are very few transactions on the part of end users. Currently, demand from the downstream market is weak while supply for PS and ABS is tight in China and Hong Kong. ABS prices still have some room to move up considering the cost of monomers,” a player opined, on the other hand.

Meanwhile, the recent correction in spot styrene costs combined with the downwards momentum in butadiene and ACN prices are likely to weigh down on market sentiment, buyers believe. Spot styrene prices still indicated an increase of $30/ton on FOB South Korea basis week over week despite significant losses in the last couple of days. Butadiene costs were also $40/ton lower with the same terms. Spot ACN prices on CFR Far East Asia basis lost $25/ton in the period.
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