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Slumping butadiene costs weigh down on Asian ABS, HIPS

by ChemOrbis Editorial Team -
  • 30/05/2017 (08:41)
PS and ABS markets have firmed up in Asia recently as the styrene spike in mid-May encouraged suppliers to seek higher PS and ABS prices. However, demand for import cargos was not that vivid in global markets including China, Turkey and Egypt. Moreover, the visible drops in butadiene costs across the region caused sellers to step back on their prices for HIPS and ABS in contrast to GPPS.

Asian PS and ABS producers attempted to raise their offers by $20-40/ton in the middle of the month. Larger increases of $50-60/ton arrived in the latter part although styrene costs erased their gains over last week amidst volatile energy costs.

In China, import GPPS witnessed further increases over the week amidst fluctuating crude oil and styrene prices as well as relatively better demand when compared to HIPS. Yet, HIPS offers softened slightly due to unsupportive butadiene prices.

Spot butadiene prices plunged by more than $250/ton on FOB Korea basis throughout May, while styrene costs still indicate an increase of almost $50/ton in the period despite their recent softening.

A South Korean producer reported that they have implemented decreases of $30/ton on their ABS and HIPS offers to China. A producer source noted, “Considering the slump in butadiene and volatile styrene, we expect the market to stabilize soon as our customers will not make any purchases so long as the downturn continues.”

A Taiwanese producer stated, “In terms of demand, GPPS is still better than HIPS. Buying activity improved a bit in line with the recent uptrend; but we are still under sales and cost pressure. Although the May-June period is the off season for PS applications, we think the trend will depend on the state of demand and upstream.”

According to a trader in Malaysia, demand is stable but not that strong. “PS and ABS prices from Taiwan may hold stable or see slight corrections considering the current costs. Thus, it is risky to stock up even price show slight uptrend recently as it is off season now. We are cautious about our purchases,” he mentioned.

“Butadiene prices remain on a bearish path amidst more than sufficient supplies, which exerts pressure on HIPS. Demand towards GPPS is still better compared to HIPS,” said a player.

In Turkey, a similar case has been in place with initial June offers from Asia emerging on divergent paths as GPPS prices from Korea surfaced at firmer levels than May whereas HIPS prices from Korea and Malaysia were slightly softer. A South Korean ABS producer approached the market with $70/ton decreases for June as well. “Butadiene prices broke below the $1000/ton FOB Korea threshold last week, which was attributed to some plants returning from turnarounds. This caused players to expect additional drops,” opined a trader.

Likewise, in Egypt, import GPPS prices were stable to slightly firmer over the week, while HIPS offers softened by $15/ton on the low end due to the pressure from declining butadiene prices.
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