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Ongoing ABS hikes in China cautiously reflected on global markets

  • 15/11/2017 (04:07)
After following a softening trend for more than two months, China’s ABS market has rebounded since last week in response to soaring energy complex as well as firmer styrene prices in Asia. However, whether these cost-driven hikes will prove workable or not is still being questioned both in China and across other global markets.

In China, players widely concur that the overall demand remains slow although buying interest has somewhat improved recently in the midst of expectations of further cost-driven increases. A trader commented, “We are cautious about the ABS outlook as the recent uptrend is stirred by costs, not by real demand.”

In Southeast Asia, ABS prices have turned up recently after players resisted the cost-driven hikes over the past week. Apart from costs, Asian producers have tight supply levels due to maintenance shutdowns, which also affects sellers’ pricing policies to the region.

A source from a Taiwanese producer opined, “We see better demand from China when compared to Southeast Asia and our prices are slightly higher this week due to firmer styrene prices. We may no longer accept lower ABS deals in Southeast Asia as prices are on an upward trend.”

In Egypt, the cost-driven hikes have also found reflection on the import market as Asian producers approached the market with increases. However, players are highly suspicious about their workability as demand remains dull and buyers prefer local cargoes.

This recent uptrend in China is yet to be felt in Turkey and Europe; however, players are now cautiously questioning if the bottom is near.

In Turkey, both local and import ABS prices continued to witness decreases over the past week. Anticipating a similar rebound as in the Chinese market, some players think that the market has bottomed out while others hold onto their softening expectations based on weak year-end demand as well as comfortable supplies.

In Europe, ABS prices reached a 3-month low in line with lower styrene and butadiene prices as well as improving supplies and regular demand. Players are questioning whether the market is close the bottom since the energy complex and Asian upstream markets have moved higher recently.

A trader commented, “Our South Korean supplier took a firmer stance for November in line with their limited availability, rising energy prices and higher upstream costs in Asia. The producer informed that import prices may increase by €100/ton for new shipments; however, we may face difficulties in reflecting the increases on our locally-held prices as the local origins are tracking an opposite direction.”

Players in Italy also reported the hike intentions of Asian suppliers in the import market. However, they remain skeptical about whether these hike attempts will find acceptance in the near term in Europe as December will be a shorter month given the year-end festivities.
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