Asian ABS Prices Edge Up Amidst Mixed Supply and Demand Dynamics in February 2024

The ABS (Acrylonitrile Butadiene Styrene) prices in the Asian market elevated slightly in the first week of February 2024, amidst constrained supplies and a reduction in the production rates. With the end of January 2024, the ABS industry continued to grapple with supply pressure, as several companies were compelled to reduce production. In January 2024, the rise in the feedstock Styrene and butadiene prices also caused concern about heightened cost pressure on the ABS producers in the region.

In Asia, the ABS market saw a price increase at the beginning of February 2024. The rise in the price of raw material Styrene, coupled with an increased number of ABS unit maintenance shutdowns within the previous month, resulted in a contraction in market supply. The Force majeure at Lotte Chemicals Corp. in Yeosu, South Korea with a total ABS production capacity of 55,833 TPM for 9 days in January 2024 and maintenance turnaround at CNOO& LG Petrochemical Co. Ltd. in Huizhou, China with the total production capacity of 12500 TPM for 13 days in February 2024 caused ABS operational costs to rise and limited the inventory availability in the regional market. As ABS enterprises operated at lower capacity, the market supply tightened, gradually digesting inventory. Despite no immediate improvement in the company’s margins, the pressure on the supply side showed signs of improvement in the ABS price momentum.

In terms of raw materials, the Asian market witnessed a mixed trend in the ABS upstream values. The acrylonitrile supply remained relatively loose, leading to subdued market activity throughout the month. The butadiene market experienced a significant uptick, influenced by a rise in the foreign market, supporting domestic supplier prices. However, towards the end of the month, downstream product markets faced challenges, prompting a return to a consolidated state.

Since January 2024, major ABS end-users, including downstream factories in the home appliance industry, exhibited modest enthusiasm for stocking. The focus was on demand-driven purchases and inventory management. As the Spring Festival approached, downstream enterprises intensified holiday preparations, leading to weakened procurement activities. Despite challenges, midstream shipments at high prices and average spot circulation contributed to stabilizing the market.

The performance of the upstream raw materials of ABS remained relatively strong in January, reinforcing cost support in February 2024. On the demand side, consumption remained moderate, and ABS merchants reported higher prices due to supply contraction and upstream increases.

As per the ChemAnalyst, the ABS prices may see stability in the coming weeks in the APAC region due to constrained supplies and elevation in production costs. Looking ahead to the period before the February holiday, the downstream market trading is expected to gradually calm down.