Bullish Rally in Feedstocks Push European Acrylonitrile Butadiene Styrene Prices in March

As of last week of March, Acrylonitrile Butadiene Styrene (ABS) market has observed another price hike on the back of strong cost pressure from upstream feedstocks. ABS market has been firm in the European market, and the latest gain in the prices has further deterred the procurements from buyers amid sluggish demand fundamentals.

Feedstock prices have increased consistently in the last two months due to strong crude oil and natural gas prices throughout Europe on the back of ongoing uncertainties around the supply of energy feedstocks in the global market. Market dynamics were tighter as the demand for crude oil was outpacing the available supply; however, the Ukraine-Russia conflict has further exacerbated the demand-supply dynamics.

In the European region, demand from the Automobile industry has slowed down in H2 of Q1 owing to weak output rates from one of the most productive industries in Europe. This has resulted in weaker procurements from the downstream users. Since the beginning of the Russia-Ukraine conflict, other than the semiconductor shortage, the limited availability of wire harnesses has further contributed to the output decline of the automotive industry. Major automotive manufacturers BMW, Volkswagen, and others have reported a drop in vehicle production levels across Europe.

In the latest assessment, Butadiene prices have witnessed a major spike; meanwhile, Styrene and Acrylonitrile prices have also gained significantly in the last couple of weeks. Besides upstream inflationary pressure, the limited availability of Butadiene has also contributed to a substantial rise in prices. Butadiene has also been procured heavily by elastomer manufacturers where Butadiene forms a staple for several key elastomers, including Styrene Butadiene Rubber, Polybutadiene Rubber, and others. Import availability has also decreased owing to rising freight charges on several European routes while trade on the Black Sea remains hampered.

As of the week ending 25th March 2022, Acrylonitrile Butadiene Styrene prices as in FD Hamburg Germany were assessed at USD 3320 per MT.

As per ChemAnalyst, “ the Acrylonitrile Butadiene Styrene market has been firm in the European region despite weak demand fundamentals. Demand from the automotive industry is unlikely to change momentum in the short term. However, strong cost pressure from the upstream feedstocks is likely to drive ABS prices further in the first half of Q2 2022.”