Acrylonitrile Butadiene Styrene manufacturers feeling the heat of fuming Natural gas cost

The Acrylonitrile Butadiene Styrene market has been on a consistent uptrend in recent weeks owing to an increase in demand from the international market and a substantial rise in feedstock prices. In the US market, all the key engineering plastics have been gaining consistently since the beginning of the Russia-Ukraine conflict.

In the latest assessment, ABS prices have increased by more than 1% since the beginning of April, and as of the week ending 8th April 2022, ABS prices were assessed at USD 3120 per MT on FOB basis in the US market.

Engineering plastics have been in relatively stable demand in the domestic market, however, the European crisis, which resulted in soaring commodities prices, has presented ample opportunity for the US manufacturers to send the material to the European markets. Similarly, US Acrylonitrile Butadiene Styrene market participants have reported increased queries from the European market.

Feedstock prices have increased steadily in the last few weeks due to the high natural gas prices throughout the US on the back of increased demand for LNG from Europe as Europe look for alternatives other than Russian LNG. Feedstock Butadiene has been tight in the US and global market, pressuring the cost of production and culminating in a price spike of downstream ABS. Meanwhile, China has shunned Butadiene exports to cater to domestic demand. The snug supply of Butadiene has further exacerbated the pricing dynamics of ABS, where Butadiene forms a crucial feedstock in the ABS production. Furthermore, Styrene Monomer and Acrylonitrile prices have been robust in the North American region in lieu of the rising cost of production and soaring upstream prices.

As per ChemAnalyst, “ABS prices are expected to remain firm and may gain further in the coming weeks as natural gas prices have been extremely high in the US market. Additionally, increased prices of Natural gas will result in a rise in the cost of production of polymers. European demand is likely to remain healthy in the short term as the commodities market is unlikely to change momentum amid growing energy prices.”