The domestic acrylonitrile-butadiene-styrene (ABS) market was stable in the week ended 29 July, with most prices now established for the month at somewhat reduced levels from June, on the reduction of costs for both styrene and acrylonitrile (ACN).
Sources expected market levels to consolidate in the current ranges as the contract prices for two of the feedstocks – styrene and butadiene – will increase in August, steeling producers against any further ABS price erosion.
Demand remained stable to soft, with Q3 showing some decline from Q2, in line with expectations. The pattern of demand was unchanged: construction applications were still performing poorly but other sectors such as appliances and the automotive industry were holding their own.
The global reach of feedstock trends was also raising production costs overseas, shielding the domestic market from any major influx of offshore material.
In Asia, spot prices held at the slightly higher levels indicated last week, at $2,180-2,220/tonne CFR NE Asia, despite tepid demand from downstream. Plant operating rates remained at a lowly 50-55% in China, and some Taiwanese producers were at similar rates. The prices are being supported by high feedstock costs, which are squeezing producers’ margins. SE Asia and India CFR levels were indicated $10/tonne and $20/tonne higher respectively.
Feedstocks
US ACN contract prices were down by about 6% from June to July, being assessed in the $1.13-1.17/lb range delivered. This was largely attributable to reduced propylene costs.
The ACN spot market was indicated $50/tonne lower this week, reflecting weak market sentiment and low demand worldwide. The FOB USG range was assessed at $2,200-2,250/tonne.
US butadiene contract price nominations for August are currently at $1.75-1.86/lb after some adjustments from the original announcements. Market sources believe the two-tiered pricing structure will carry over from July, with three producers at the lower end of the range and one at the higher. July’s range is $1.70-1.75/lb.
Spot butadiene prices were assessed unchanged at $1.90-2.00/lb CIF USG.
Butadiene supply is expected to remain very tight for the next three months, as two suppliers have major maintenance turnarounds beginning in September.
The US styrene spot market was again assessed higher, with a deal getting done at 68 cents/lb FOB USG for August loading. A week ago the range was 65-66 cents/lb FOB. The monomer has been tracking benzene upwards in recent weeks. Contract price negotiations for July are not yet complete, but are likely to culminate in a decrease from June’s range (73-77 cents/lb), triggered by the drop in benzene contract price for July.
The benzene contract price for August has settled at $4.13/gal, up $0.44/gal from July, so August styrene costs will be substantially higher.
($1 = €0.70)
This week on ICIS ( www.icis.com ):
07/29/11 17:59 Europe ACN spot prices continue downturn with $50/tonne reduction
07/27/11 14:40 US durable goods orders fall 2.1% in June
07/26/11 09:02 Asia ABS demand weakens on US, eurozone debt woes
07/25/11 08:58 Japan's Toyota output, sales fall in H1 2011 on March quake
07/22/11 19:46 Most US consumers think buying a home is a bad investment
