Asian ABS Market Sustains Price Uptrend in the Mid-April 2024
Asian ABS Market Sustains Price Uptrend in the Mid-April 2024

Asian ABS Market Sustains Price Uptrend in the Mid-April 2024

  • 22-Apr-2024 3:34 PM
  • Journalist: Stella Fernandes

In the dynamic landscape of Asia's ABS (Acrylonitrile Butadiene Styrene) market, a sustained upward trajectory has been witnessed since the first quarter of 2024, despite slow downstream inquiries. Mid-April 2024 marked another surge in the regional ABS market, propelled by rallying energy prices that elevated upstream costs including feedstock Styrene and Butadiene prices, alongside a cautious uptick in buying interest in the Asian market.

Moreover, the key factors contributing to this ongoing surge in the ABS market include Brent crude oil futures hovering around the USD 90/bbl threshold for another week. This oil rally has significantly influenced the prices of crucial feedstocks for ABS materials, particularly styrene and butadiene monomers. As a result, producers have faced upward cost pressures, leading to firmer pricing strategies in the ABS market. The Styrene monomer price in the Chinese market showed an inclination of approximately 1.2% in the week ending April 19, 2024.

Producers, predominantly from Taiwan and Vietnam, have responded by implementing price hikes in both China and Southeast Asia. Despite limited transaction volumes, sellers have maintained firm offers, citing robust cost support. Downstream converters, recognizing the potential for further ABS price increases, have shown increased buying enthusiasm, while low inventory levels at several warehouses have further fuelled demand in the region.

However, despite the upward momentum, demand from downstream sectors has yet to provide full support for the ongoing surge in the ABS market. While higher prices have prompted more active buying, it has primarily been for replenishment rather than stockpiling. Additionally, recent holidays in Southeast Asian countries have contributed to subdued market trading in the ABS industry for the time being.

In summary, as the ABS market in Asia continues its upward trajectory, the risk of high prices looms, potentially leading to short-term market fluctuations. The ABS industry remains cautiously optimistic, balancing the impact of cost pressures with evolving demand dynamics, as the market participants navigate through this period of heightened volatility.

As per ChemAnalyst, the prevailing market conditions suggest that the probability of both an increase and a decrease in ABS prices in the future is comparable. Consequently, the consensus is that the ABS market will maintain its robustness shortly. Looking at the fundamentals, it's anticipated that the three upstream materials crucial for ABS production will continue to provide significant support in the future market. There are strong anticipations for ABS to receive robust backing from the cost side. Furthermore, ABS polymerization plants are presently operating at a relatively constrained capacity, leading to a trend of tight supply in the coming weeks.

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