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European ABS market giving bearish signals for 2015

by ChemOrbis Editorial Team -
  • 16/12/2014 (12:57)
The European ABS market is seen ending this year on a downward note and is hinting at a bearish start for 2015 as energy markets are pulling down feedstock costs. Spot styrene prices on average are standing at the lowest level since the end of Q3 2010 after slumping by $165/ton since the beginning of December.

For ACN, the latest spot prices are quoted at $1670/ton CIF Med, the lowest level in over 2 years. Spot butadiene prices, on the other hand, have increased by over €30/ton from early December levels to reach €630/ton FD NWE this week, which may help to limit the extent of decrease expectations.

In Italy, the latest spot ABS prices are quoted at €1650-1740/ton for ABS extrusion and at €1650-1790/ton for ABS injection FD, 60/90 days. A distributor sold West European ABS €50-80/ton below last month. “Our supplier initially reduced their prices by €50/ton, but buyers are cautious as they project further decreases for January,” the distributor commented. Another distributor concluded some December deals with decreases of €50/ton for South European and locally-held South Korean ABS. The distributor said, “Non-European origins are traded close to European material due to the weak euro/dollar parity.”

A converter reported receiving December ABS offers with decreases of €80/ton. The buyer commented, “We decided to postpone our purchases to January as we have sufficient availability. One of our suppliers is offering West European ABS for delivery in January with decreases of €100/ton.” Another converter bought European and non-European ABS with decreases of €50/ton at competitive levels. The buyer expects ABS prices to post further decreases in January in line with plunging upstream costs.

The West European ABS market is also seen ending December on a bearish note. A distributor in Belgium concluded some December deals with decreases of €80/ton from last month and stated that their monthly sales will be wrapped up this week as buyers are about to suspend their production for the Christmas holidays.

A German distributor conceded to larger discounts of €100/ton in order to boost his sales amidst weak market conditions. According to the distributor, most buyers are now waiting to see January ABS prices as they project further decreases given bearish upstream markets. Another distributor in France concluded some ABS deals €50/ton below last month. “Demand is weaker ahead of the Christmas holidays and December sales are now considered to be completed. Buyers anticipate a new round of decreases for the upcoming month,” the distributor said.

A converter in Germany settled his December gentlemen’s agreements with decreases of €70-80/ton for ABS. Another converter also obtained similar discounts on his December ABS contracts. “We think that spot butadiene prices have hit the bottom level, so we don’t expect butadiene contracts to post significant decreases in January. However, styrene contracts are likely to settle lower again, which will exert downward pressure on ABS next month,” the buyer commented.
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