ABS Price Trend Concludes October 2023 on a Bearish Note Globally
ABS Price Trend Concludes October 2023 on a Bearish Note Globally

ABS Price Trend Concludes October 2023 on a Bearish Note Globally

  • 31-Oct-2023 12:56 PM
  • Journalist: S. Jayavikraman

The lack of demand and surplus supplies across the globe has dominated Acrylonitrile Butadiene Styrene (ABS) prices. A slowdown in new orders has gained prominence in the ABS market due to muted procurement enthusiasm, with buyers showing a cautious approach and purchasing on a need basis only. The downstream market momentum was negatively affected by the reduction in operational rates amidst weaker-than-expected order volumes, while global weakness hit regional industries throughout October 2023.

In the second half of October 2023, ABS prices declined across the Asia-Pacific region as the downstream demand and supply availability imposed a bearish market situation throughout the month. The downstream factories of ABS, including the automotive and appliance industry, showed low stocking enthusiasm in the Chinese market. The pre-stocked inventory needed time to digest, and in addition, the acceptance level of manufacturers has been affected by the previous increase in ABS prices, causing demand to drag on the market. As per the latest insights, the ABS market is also expected to remain weak in the short term. One of the prominent ABS producers, LG Chem Ltd. of South Korea, reported that its third-quarter net profit margins slipped, primarily due to the weak downstream momentum amidst an economic downturn, and expected ABS prices to decline in the coming weeks amidst high inventories.

In Europe, the ABS market has been thinned by the muted trading activities in the region in October, and further, the outlook is stuck between upstream volatility and surge in the utility costs on one side and weak downstream market fundamentals on the other side. With the weak market transactions, there was no room for margin expansion during October 2023 amidst piled-up stocks as a result of poor order entries throughout the month.

Similarly, the US ABS prices were also on the negative side in the second half of October 2023 and resulted from the high supplies and low demand from the automotive industry despite higher upstream costs. Meanwhile, the sluggish demand from the offshore market also put downward pressure on the ABS price momentum. The procurement activities have deteriorated because of the high stocks, and consumers opted to wait and see attitude to enjoy more price decline in the American market.

As per the ChemAnalyst, conclusively, the ABS prices may consolidate in November 2023 across the globe due to supply bottlenecks and persistent low downstream procurement activities in the global market for a short period.

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