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China’s ABS market under downward pressure

  • 07/03/2017 (05:04)
In China, the ABS market has been facing downward pressure over the past two weeks as the supply levels are increasing because of the weakness in demand while the ongoing softening in spot butadiene costs continues to support the price declines. In addition, buyers’ resistance to the current levels is weighing down further on the market.

Over the past week, import ABS offers moved below the $2000/ton threshold in China while local prices also posted declines, following the $80/ton weekly drops in spot butadiene prices on CFR China basis.

“Suppliers’ warehouses are full of ABS materials, and traders are digesting their stocks. Although most converters have low inventory levels, they are unwilling to make purchases when prices are falling,” said a trader.

A Southeast Asian producer also confirmed the increased inventory levels in China and added, “Producers are trying to keep their offers stable while Chinese buyers are giving firm bids. If styrene prices will continue to fall, the market will be poorly affected; however, the spot styrene prices may firm up again given the upcoming maintenance period.”

Regarding the market outlook, divergent expectations are voiced by the market players. Some players believe that the downward trend in the ABS market will last due to the high inventory levels and weak demand while some do not exclude the possibility of seeing a rebound in prices in the medium term pointing to the maintenance season in the Asian styrene market in the March-June period.
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