Expensive Imports Drives ABS Prices in Europe, Demand Remains Unchanged
Expensive Imports Drives ABS Prices in Europe, Demand Remains Unchanged

Expensive Imports Drives ABS Prices in Europe, Demand Remains Unchanged

  • 02-Feb-2024 3:31 PM
  • Journalist: Francis Stokes

The ABS (Acrylonitrile Butadiene Styrene) prices in the European market gained a significant rise at the termination of January 2024, backed by the limited stock availability with rising input costs. The ABS market participants increased the prices in the Eurozone due to increasing feedstock Styrene and Butadiene prices for the second half of the month despite inadequate downstream procurement along with higher crude oil values.

In the kickoff to the new year, regional ABS market have experienced a steady start, with prices remaining unchanged amid growing apprehensions about the supply situation. As the month concludes, market participants are now anticipating significant price hikes in the upcoming month as they carefully evaluate the current situation and its potential ramifications on the ABS sector. Further, from the supply perspective, the global supply chains face uncertainty due to the latest conflict in the Red Sea, the shortest route connecting Asia and Europe, endangering the availability of imports into the European ABS market. Local market participants noted that extended disruptions could seriously threaten Asian shipments, consequently affecting supplies to European countries including Germany and the UK. Thus, the ongoing disruption in the Red Sea has significantly impacted global supply chains, prompting the rerouting of numerous vessels around the southern tip of Africa, resulting in extended and more expensive journeys.

Additionally, Germany is preparing for extensive disruptions in rail services as train drivers initiated an unprecedented six-day strike last week. This strike is anticipated to cause chaos in travel arrangements, strain supply chains, and deliver another setback to the struggling economy. As a result of these supply-related factors, the ABS price trajectory gained a northward momentum for the time being.

In a climate of uncertainty, the ABS market is poised for increased demand, as buyers turn away from the import market.  Regional sellers are gearing up for a spike in sales, capitalizing on the limited availability of imports. Some industry sources even speculate that these disruptions may persist for three months.

Adding to the complexity, buyers are expressing concerns about potential drops in domestic inventories. Regional suppliers may redirect their volumes to nearby Türkiye, exacerbating the challenges faced by the country, which is already grappling with the burden of supply disruptions.

As per ChemAnalyst, the ABS prices will remain relatively stable on the northward side due to a shortage of stocks amidst a slow inflow of imports. Moreover, rising feedstock Styrene and Butadiene prices are expected to impact the ABS pricing Dynamics significantly. However, downstream demand is likely to remain modest and inadequate to drive up the ABS prices in the Eurozone.

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