Downwards trend gains speed in Turkey’s ABS market

Turkey’s ABS market maintained its bearish trend in early June as rapidly falling upstream costs and sufficient supply continued to weigh down on sellers. Apart from these dynamics, players pointed to the ongoing liquidity problems, which had caused attractive deals to be concluded with longer payment terms in May, and the impact of volatility across major economies as other triggers behind the continuous downwards momentum.

In the import market, Asian ABS natural prices recorded drops of $40-50/ton for June. Players had already reported that they were hearing import levels below the $2000/ton threshold in the second half of May, while the most recent prices started from $1950/ton last week. Confirming receiving lower offers, players voiced their expectations of seeing additional price reductions in the days ahead. “I expect spot styrene prices to move down to as low as $1150/ton on FOB South Korea basis,” a trader commented. Another trader thinks that ABS prices may record larger decreases at the end of June as lower spot butadiene costs weigh down on the market.

In the local market, the overall ABS natural range fell $55/ton on both ends over the week with limited trading activity pushing the low end of the overall level below the $2300/ton threshold. “Offers at around $2300/ton became scarce,” a distributor said. Another distributor commented, “There are serious liquidity issues ongoing in the market which forced sellers to reduce their prices to as low as $2200/ton in the local market.” Euro-based West European ABS natural prices for promptly available materials recorded massive drops of €100-110/ton when compared to the last week of May. In the meantime, locally-held ABS white was priced $50-100/ton below the previous week, with most offers being at $2550/ton ex-warehouse, cash including duty if applicable, not including VAT.

The localization costs of the current import Far East Asian ABS natural offers roughly comes to $2100-2160/ton on an ex-warehouse Turkey, cash including duty not including VAT basis after adding the 6.5% customs duty and an estimated $30/ton for clearing and handling charges, without distributors’ margins. This calculation clearly shows that the local market may record additional decreases in the days ahead.

For ABS prices in Turkey, please see ABS Price List (For members only)

The recent price drops in the ABS market are in line with persistently decreasing feedstock markets across the globe. In Asia, spot butadiene prices lost $80/ton on FOB South Korea basis since the beginning of June, while they represent a massive decrease of $690/ton since early May. Spot ACN costs were stable since the end of May on CFR Far East Asia basis, whereas they stand $120/ton below the levels of early May. Spot styrene offers were down by $35/ton on FOB South Korea basis with respect to early June while they indicate a $240/ton fall from the start of May. In Europe, spot butadiene prices lost €200/ton on FD NWE basis since June 1 bringing the total drop amount to €750/ton from early May. Spot ACN offers retreated by $340/ton on CIF MED basis since early May in the region. Spot styrene values didn’t change much on FOB NWE basis since June started, although they stand $180/ton below the early May levels.