FEA’s ABS outlook squeezed between rebound in styrene prices and holidays
In Asia, spot styrene prices rose by around $60/ton from a week earlier to be currently reported at around $1175-1180/ton on an FOB South Korea basis and at $1150/ton on a CFR China basis.
However, spot butadiene prices have continued to lose ground on a weekly basis, falling further by $50/ton on CFR China basis over the past week.
Currently, some ABS players are questioning the sustainability of recent increases in the spot styrene market amidst the fluctuating crude oil markets and the effect of these gains on the downstream markets in the region.
Many players maintained expectations on the softer side, reporting that weaker demand will continue to weigh down on prices despite the revival in spot styrene prices which have also shown indifference towards the ongoing styrene shutdowns in the region so far.
“This week the market activities are expected to slow as Taiwan and China will be on holiday due to the Qing Ming festivals. Spot styrene prices have increased recently; however ABS offers have been more or less stable so far,” said a trader.
A source from a Taiwanese producer also commented that demand is still weak despite the recent gains in the styrene market as activities remained muted. “Sales pressure is high and some traders are accepting lower bids in order to reduce their high inventory levels. Butadiene prices are expected to pick up after end-April when more crackers are going to have shutdowns,” added the source.
According to weekly average levels on ChemOrbis Price Wizard, after following a downward trend as of mid-February, both local and import ABS offers in China are currently at the lowest levels since early December 2016, dragged down by lower styrene and butadiene prices as well as weak buying interest during the same period.
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