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Will ABS tightness cushion impact of retreating costs in Europe?

by ChemOrbis Editorial Team -
  • 21/03/2017 (12:40)
In Europe, March ABS deals started to be concluded with three digit hikes for the fourth consecutive month on limited supply and better demand despite all-time-high ABS prices. Many players are currently voicing the expectations of stabilization over the medium term as they believe that tight supply and good demand will counterbalance the recent upstream losses.

A manufacturer from Italy commented, “Our suppliers are not open to negotiate their levels as the lack of imports from Asia exacerbated the prevailing tightness. Furthermore, import prices from Asia stand above the local range. As for April-May, we heard talks of price stabilization; however, we hope for a price relief instead, considering that ABS prices reached all time highs.”

“Our European suppliers mostly anticipate a mostly stable trend for April, citing dwindling ABS supplies. Even if we hope that downward pressure from decreasing spot styrene and butadiene costs will be felt on ABS prices, supply-demand fundamentals will play a more important role in determining the future trend,” opined a different buyer.

According to many, the ABS market is likely to follow a stable trend with decreasing feedstock costs on one hand and tight supplies on the other hand. The downward pressure will be more visible only if supply eases and upstream markets continue to retreat. Players are also wondering if the record high levels will attract import cargoes in April from Asia, where ABS prices are now falling.
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