China’s import ABS market surges to highest level in almost a decade

The bullish rally in China’s ABS market has continued this week, with prices seeing a fresh round of sharp hikes. Players noted that higher offers were well supported as supplies were still tight and spot styrene prices were still high despite a recent correction.

Prices surge more than 100% in 8 months

Import ABS prices in China have been almost relentlessly increasing since late March.

The weekly average of prices on CIF China basis have recorded a cumulative gain of $1240/ton or 113% since the uptrend kicked off.

Week over week, ABS injection prices on CFR China basis surged $130-150/ton to $2230-2450/ton, the highest levels since May 2011, data from ChemOrbis Price Index suggest.



Tight supply, high costs support the rally

Several Northeast Asian producers reported that they applied fresh hikes on their ABS offers to China this week, justifying sharply higher prices by pointing to the continual tightness of supply and high upstream costs.

Spot styrene prices on CFR China basis have witnessed a correction, dropping $135/ton from last week to $1035/ton. Still, this level indicates a $360/ton gain when compared to early October.

A source from a South Korean producer said, “Styrene prices are still high despite their recent correction. Meanwhile, the LG Chemical refinery fire has shrunk the dearth of regional supply of ABS.”

Buyers fatigued amid relentless price hikes

According to suppliers, the number of deals they concluded in China this week have decreased from the previous weeks as a reflection of the fatigue that buyers are experiencing following months of relentless price hikes.

“Demand from China has waned, and only limited transactions have been closed at the higher levels,” a regional producer noted.