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European ABS under pressure from aggressive imports, PS holds firm

by Manolya Tufan -
  • 15/05/2023 (02:24)
In Europe, ABS prices have bucked the PS trend recently, mainly due to the presence of aggressive Asian imports. A mixed pricing policy was observed for ABS in May, with rollovers to slight hikes still being valid as opposed to discounts in the distribution channel. On the other hand, PS sellers mostly held firm, citing the monthly styrene hike.

Wide gap between imports and locals weighs on ABS

It has been a long while since regional ABS markets have been buckling under the pressure from aggressive import offers from Asia as Chinese markets failed to stage the expected recovery. A wide gap between local and import markets weighed on sellers’ attempts for rollovers or slight increases during May. Producers initially approached the market with rollovers to small hikes taking €55/ton higher styrene as well as €10/ton lower butadiene and €67.50/ton lower ACN contracts into account.

Although some suppliers are still adamant on their stable to slightly firmer offers, discounts were obtainable in the distribution channel in a few cases. Moreover, rumor has it that distributors could obtain special prices from regional producers for extra tonnages in the previous months. That is to say, they may have stocks purchased below the market level from the past months and they are willing to clear these stocks as demand remains subdued and overall supply is ample. In a few cases, distributors conceded to large discounts and offered below the €2000/ton FD threshold for injection grades in particular.

Yet, distributors are currently reluctant to purchase in large quantities, despite the potential to buy at special prices, as there is a lack of confidence in the demand outlook, which prompts distributors to keep their stocks at decent levels.

Imports stand €400-500/ton below locals in Italy

Pricewise, Taiwanese and South Korean ABS natural inj. offers were reported at €1700-1730/ton DDP, 60 days, with delivery in June and July. This level stands €400/ton below the low end of the spot ranges in Italy.

South Korean ABS extrusion was offered slightly below €1900/ton DDP, 60 days, which stood roughly €250-350/ton below the spot ranges in Germany.

However, European buyers mostly hesitate to engage in import purchases despite lower prices. This is because converters lament about a lack of visibility with regards to their end orders and gloomy economic outlook. Consumption is heavily hit as Europe remains hawkish with rate hikes and hopes for a meaningful recovery in the H2 2023 are meagre. Distributors also prefer to do back-to-back business.

Here are the latest weekly assessments for those who want to compare import levels with regional spot ranges. In Italy, spot ABS was assessed €20/ton lower on both ends at €2080-2230/ton for inj. and extrusion on FD, 60 days basis. In West Europe, ABS inj. and ext. were also assessed €20/ton lower at €2120-2240/ton with the same terms.

PS manages to rise for 2nd month

Unlike ABS, PS sellers continued to offer with increases of €50-60/ton in most cases. Still, a few sellers conceded to smaller hikes than the styrene’s outcome as demand has remained subdued so far in May. Apart from several bank holidays, a gloomy economic outlook keeps purchasing volumes negligible on the buyers’ side.

A regional distributor affirmed, “We started offering with €55/ton hikes, which failed to stimulate buying interest. As our competitors also apply smaller increases than styrene, we trimmed our initial offers. It seems hard to achieve the entire styrene hike.”

Nevertheless, PS prices managed to rise for the second straight month solely on the back of cost support as players reported no major supply concerns except for limited HIPS supply at a producer. Total Energies lifted its force majeure from Carling and Gonfreville, France.

In Italy and West Europe, spot PS prices were assessed €10/ton lower at €1700-1800/ton for GPPS and €1800-1900/ton for HIPS on FD, 60 days basis.

Although import prices were also competitive than local offers, they failed to grab interest due to blurry demand outlook. South Korean GPPS and HIPS ext. were heard at €1500-1550/ton and €1600-1650/ton, respectively, on DDP, 60 days basis, with delivery in July-August.
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