Supply issues drive ABS offers higher in Asia
In China, a distributor of a major Taiwanese ABS producer reported that their supplier increased their offers by $100/ton in the past two weeks, citing their low inventory levels. A South Korean producer also issued a hefty increase of $110/ton on its ABS prices to China when compared to the previous week. A different Korean producer said, “The ABS market found support from supply issues, yet we think that demand is still unsatisfactory.” Inside China, a local producer is also facing transportation issues, which adds to supply concerns and thereby helps sellers to seek higher prices.
In Malaysia, a trader commented, “We were informed by a Taiwanese producer that their PS and ABS prices will increase next week, hence we are planning to secure some cargoes as our inventories are quite low. However, our customers are not interested in making purchases, although we have informed them of the imminent price hikes. This is because demand in their end product market is not so vivid.”
Some traders commented that the gains in the volatile styrene market in early last week also supported sellers’ hand. An Indonesian trader said that South Korean ABS offers have increased by $80-110/ton on a weekly basis given the increases in spot styrene prices in the last week. However, the upturn in styrene happened to be short-lived as the spot styrene market has turned soft again in the past few days. “We do not think that buyers will show interest in higher offers as prices may be adjusted down in the near term. Our supplier is just testing the market,” added the trader.
Apart from styrene, spot butadiene prices also posted additional declines of $40/ton over the past week, sustaining its downturn which has been in place since late February.
Meanwhile, the reduced supply levels across Asia have made themselves felt on other regions as well including Turkey and Egypt. Prices for Far East Asian origins have already posted some gains in Egypt on the back of limited allocations while Turkish players have also started to voice firmer expectations for July. Players also cited higher freight rates as well as delayed shipments as the other factors behind higher Asian offers.
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