German ABS Market Sentiments Stay Depressive Amid Sluggish Demand
- 21-Dec-2022 12:55 PM
- Journalist: Nicholas Seifield
Acrylonitrile Butadiene Styrene (ABS) market has been mostly tracking a downward price trend for the past few months in Europe. Prolonged high inventory levels in the major Asian countries and low prices further pressured the cost of ABS in the regional market. Traders based in Germany reported aggressive imports from Asia. In addition, there is less congestion at the regional ports, and material availability is ample enough to meet the demand of the European market thanks to stable natural gas prices this week and easing supply chain disruptions.
Some buyers started paying more attention to Asian volumes due to the enormous gap between European import markets and domestic spot markets. A source said the distributor remarked that competitiveness for ABS in imports is the main issue now. Further, weak demand from the downstream automotive and construction industry was observed, and regional sellers are facing substantial difficulties in selling ABS as buyers purchase from Korea. As freight rates remain at their current levels and Asian markets fail to recover, the Asia-Europe arbitrage may continue.
The end users met domestic demand by utilizing the available stockpile (ABS). However, participants in the domestic market claim that rising inflation and volatile natural gas prices continue to dampen demand in the downstream sector. As the holidays get near, domestic buyers are placing fewer orders, and the market is experiencing low demand.
The cost of ABS Extrusion grade hovered around USD 3065/MT on an FD Hamburg basis with a weekly depreciation of 2.5% during the week ending 16th December 2022.
As per ChemAnalyst, the cost of ABS may continue to fall in the upcoming weeks owing to the continuous supply from Asia. Furthermore, it is anticipated that the lackluster demand from the construction and automotive sector will further contribute to this price downtrend. Additionally, approaching holidays and the weak demand from the downstream industry, buyers will show cautiousness and only place orders when necessary.