Bullish ABS trend cools off in Asia, players’ eyes on costs
Some suppliers were more willing to step back from their ABS offers to China and Southeast Asia this week while others elected to keep offers flat. This is despite the fact that the upstream market has been quite firm. Spot styrene prices gained $20/ton on FOB Korea basis only this week while butadiene prices jumped nearly $300/ton in the same timeframe. Players are now questioning whether rising upstream costs will compensate the impact of waning demand or not in the region over the coming days.
In China, a trader noted, “Supplies from major Taiwanese producers remain limited while upstream costs are firming up. However, neither traders nor converters are willing to secure cargoes at the prevailing levels as they think the market already increased too much.”
A few traders trimmed their prices by $10-20/ton for Taiwanese ABS to China on the week. “The market is still supported by low supply levels and higher costs. However, demand is not as strong as it was in the previous weeks since the rapid increases hampered buying appetite. Thus, we needed to revive our sales a bit,” they explained.
An agent of a South Korean producer reported, “Despite the recent rebound of feedstock prices, demand is not promising as most converters have already secured their needs for the upcoming months. Our supplier kept its offers stable under the current market conditions.”
A source from a Southeast Asian producer admitted, “ABS prices have slightly softened this week given faltering demand in China. In Southeast Asia, buying activity was already weak due to the rainy season.”
A source from a Taiwanese producer reported seeing better demand from China compared to SEA, adding, “Nonetheless, demand in China is slower than the previous weeks. Fortunately, we have low stocks owing to the good orders in July. Although ABS activity might be weaker now that buyers purchased considerably in the recent weeks, feedstock costs may support ABS over the near term.”
Another Taiwanese ABS supplier also agreed, “Supply tightness has eased amidst calming buying interest, which resulted in slightly softer prices. End users in China are covered whereas the overall market is expected to remain firm due to higher costs.”
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