ABS USD Market is Facing Rough Sailing

The ABS USD market has been weakening since June due to a combination of devaluation in RMB, ample supply of Chinese-made ABS and weak spot demand. Taking Hong Kong ABS prices as an example, mainstream offers were $1,875-1,910/mt by now, down $115-120/mt from those at the end of June. Depreciation of exchange rate was not conducive to import. The long delivery time increased the risk of trading.

ABS RMB prices fluctuated downward in the last week. ABS USD prices declined faster. The offers of some ABS resources fell below $1,900/mt. Sales pressure at traders aggravated. Many sellers cleared stocks at a loss.

Recently, SCI learnt that most Asian ABS producers quoted ABS at $1,900-1,980/mt CFR China, and the dealing prices were based on negotiation. The dealing prices of some medium and low-end ABS were heard at $1,880-1,920/mt CFR China. Market players held bearish sentiment against the unstable prices. The number of new orders at producers was limited.

On the cost side, styrene prices fluctuated at a high level. Butadiene prices rose first and then turned stable. Acrylonitrile prices remained high. Thus the ABS production cost was high. As of Aug 17, prices of acrylonitrile were $2,210-2,230/mt CFR Far East. Prices of butadiene were $1,630-1,730/mt CFR China, and prices of styrene were $1,440-1,470/mt CFR China. ABS apparent production cost was calculated at $1,960/mt, running at a high level since 2018.

Most ABS grades are facing losses against high costs. Market players are lack of confidence due to slack season and trading spat. With the end of the month approaching, the sales pressure at first-hand distributors goes higher. ABS USD market will remain weak in the short term.