ABS prices stable amid thin trade
Asia acrylonitrile-butadiene-styrene (ABS) resin prices were little changed this week amid waning demand in the key Chinese market.
The debt crisis in the eurozone and the US prompted Asian resin buyers to adopt a cautious stance, on concerns that demand for China-made products could decline. At the same time, the Chinese government’s tight monetary policy also curbed trades and made exports less competitive.
Consequently, Asian ABS producers maintained low output in a bid to combat mounting stocks. Some large plants in China were heard operating at around 50% while some Taiwanese units were also at these low rates. Overall ABS operating rates in China are estimated at 50-55%, unchanged from last week. Domestic prices were at yuan (CNY) 17,350-18,000/tonne DEL, up by CNY350-500/tonne from last week.
ABS makers continued to lament the high costs of raw material and consequently their less-than-adequate margins. A weak production margin was another reason for low operating rates among regional producers. Key feedstock styrene monomer (SM) prices recaptured the $1,500/tonne CFR China level, further eroding the margins of ABS makers. Prices of feedstock acrylonitrile (ACN) and butadiene (BD) hovered at $2,350/tonne CFR NE Asia and $4,100/tonne CFR NE Asia respectively.
Spot
Offers of prompt parcels were quoted in a wide range at $2,200-2,300/tonne CFR China and Hong Kong. Sporadic trade were finalised largely around $2,200/tonne CFR China and Hong Kong. Trade at above $2,250/tonne CFR China remains limited, according to traders.
In southeast Asia, offers at $2,200-2,250/tonne CFR met with limited interest. Spot lots changed hands at around $2,200/tonne CFR SE Asia with buying indications pegged largely at $2,170-2,180/tonne CFR SE Asia. ABS sellers said buying momentum has eased this week ahead of the Ramadan fasting month which starts in early August.
In India, offers of Asian parcels at $2,250-2,300/tonne CFR failed to garner much interest. Bids were few with buyers keeping on the sidelines. Buying ideas were heard at $2,200/tonne CFR India and below, which Asian sellers deemed too low to consider.
Production data
China’s Tianjin Dagu Chemical shut its 200,000 tonne/year ABS plant in the first half of July, partly because of rising production costs from the surging prices of feedstock BD. The plant will be down through the end of August, during which time the unit will be connected to the company's new ABS plant with the same capacity, the source said.
CNOOC LG Chemical plans to start up the first phase of its 300,000 tonne/year ABS plant at Huizhou in Guangdong province by the first half of 2013. Construction of the first phase of the project, which has a capacity of 150,000 tonnes/year, will start in July. No schedule has yet been set for building the second phase of the project, also with a capacity of 150,000 tonnes/year.
Formosa Chemical and Fibre Corp has shut its 360,000 tonne/year ABS unit at Mailiao, Taiwan, in late May as its upstream SM units were shut in mid-May following Formosa Petrochemical’s No 1 cracker outage.
Jilin Petrochemical re-started its180,000 tonne/year unit on 17 July after maintenance. The unit was shut on 4 July.
($1 = CNY6.44)
This week in ICIS news ( www.icisnews.com):
28-Jul-11 11:30 China’s Shida Shenghua Chemical to start up new propylene unit
28-Jul-11 10:58 China’s Yanshan Petrochemical to shut cracker, derivative units mid-Aug
28-Jul-11 10:17 LANXESS starts operation at expanded Wuxi plastics plant 29 July
28-Jul-11 09:57 South Korea’s YNCC offers 3,000 tonnes MTBE for August
28-Jul-11 09:20 China’s Yanshan Petrochemical to start up rubber plant by late 2012
