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Europe’s PS, ABS markets come off peaks on plunging costs

by Manolya Tufan -
  • 07/06/2021 (11:12)
The longest-ever rising streak in Europe’s ABS markets has ceased in June as prices have come off their peaks on the back of the sharp styrene drop and improving availability. PS prices also reversed the course after witnessing massive hikes in the past 7 months.

The main trigger behind the latest downturn has appeared to be the pressure from upstream markets. Styrene contracts settled down by €401/ton for June following the €480/ton decrease in the benzene settlement.

ABS comes off record highs

According to the weekly average data obtained from ChemOrbis Price Index, ABS prices across the region had been on a constant uptrend since early June 2020. This twelve-month rally indicated the longest rising streak since ChemOrbis started keeping records in 2008, pushing prices to historic highs.

June drops pulled spot prices down, while still limited availability and the higher butadiene settlement kept the size of decrease in check. Initial offers emerged with decreases of around €140-180/ton, while producers will try not to concede to additional discounts during the month.

According to ChemOrbis data, ABS prices on FD NWE basis retreated by €125-130/ton, while they indicated cumulative hikes of around €1700/ton between June 2020 and May 2021.

FD – Italy – ABS

PS sees more visible drops

After steadily rising for seven months, PS markets shifted direction in June as was anticipated earlier. According to ChemOrbis, the weekly average of GPPS and HIPS prices on FD NWE basis posted weekly drops of €280-285/ton after rising by around €1100/ton between November 2020 and May 2021.

Regional suppliers approached the market with decreases smaller than the €401/ton drop in the June styrene contracts. Initial offers witnessed decreases of €270-300/ton, while buyers may push for further decreases going forward as supplies are improving.

Imports set to arrive in July

Apart from lower upstream costs, players attributed recent drops to the increasing production in the regional markets and waning demand. Ineos lifted the force majeure on the supply of ABS specialties, which had been in place since February 2021. Meanwhile, a local producer’s availability remained tight due to a planned maintenance shutdown.

Availability also showed signs of improvement amid the arrival of imports despite logistical challenges. Some participants reported that PS imports are arriving from Russia, Turkey and Iran, while there has not been an influx of these cargoes. A buyer reported, “Import volumes will start arriving in the latter part of June, which would affect July pricing policies more.”

Decreases to gain stream during summer

Purchasing volumes are expected to be limited during June, even though converters were sticking to the sidelines for the past two months. This is because decreases are likely to gain steam during July and August in line with the arrival of import cargoes.

As for ABS, inflated prices have deterred buyers from sourcing beyond their needs and some buyers, who buy specialty grades, have even preferred to stop production as they can no longer afford paying such hikes.

When it comes to PS, disposable manufacturers voiced a lack of confidence in the demand outlook, considering the ban on single-use plastics, which will take effect as of July 3, 2021.

“The arrival of imports will put the market under further pressure in July-August. Corresponding with weak demand amid summer holidays, the downward pressure will probably be stronger,” a player reported.
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