The Asian ABS market strengthened this week, with suppliers targeting higher prices on the grounds of rising raw material costs. Manufacturing activity in China, a key market, usually accelerated in the second quarter, and buying momentum would then increase, sellers said.
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ABS spot prices rose to $1550 – 1660 a ton from last week, depending on the size and origin of the package, and some traders believe prices may have reached a temporary high.
Some sellers acknowledge that demand has not risen as dramatically as quoted prices. Although ABS buyers have resisted price increases in recent weeks, some buyers have returned to the market to replenish their inventories, fearing that prices may rise further.
“Supply has increased, but we have to see if demand really catches up in the near future,” said a producer based in Southeast Asia.
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The price of styrene monomer, a key raw material, has remained stable in recent weeks, with CFR quoting slightly less than $1,100 per ton in China, while the price of acrylonitrile, another raw material, has soared as factories in Europe and the United States shut down.
ICIS data show that ACN spot prices rose to $1,750/ton in March and $1,400/ton in January.
A Taiwanese manufacturer said: “ACN prices have risen sharply in recent weeks, so most ABS manufacturers have to raise resin prices.” ABS resin is used in household appliances, toys, consumer electronic products, and also in automotive and construction fields.
Despite record inventories in China, the market expects the valuation of styrene monomers to remain stable in the coming weeks, which also gives ABS producers incentives to raise prices. A large number of styrene monomer equipment will start maintenance from March to June, which may lead to future supply constraints.
“The supply of styrene monomers is likely to tighten in the second quarter due to maintenance shutdowns,” said a resin trader in China.
The lack of specific announcements in the ongoing Sino-US trade negotiations continues to limit ABS demand, especially in China, where tariffs on household appliances were initially proposed.
Most buyers remain cautious and unwilling to overstock.
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