Global ABS Market is Foreseen to Another Rocky Road Ahead in Early 2024
Global ABS Market is Foreseen to Another Rocky Road Ahead in Early 2024

Global ABS Market is Foreseen to Another Rocky Road Ahead in Early 2024

  • 04-Jan-2024 4:36 PM
  • Journalist: Shiba Teramoto

Anticipated softness in global Acrylonitrile Butadiene Styrene (ABS) demand is expected for the first quarter of 2024, driven by a slower-than-expected global economic recovery and an oversupply situation stemming from the underperformance of upstream materials markets. These factors adversely affected ABS producers’ margins and profitability in 2023 and are expected to persist into 2024. Moreover, challenges arose from reduced ABS downstream demand in the automotive sector throughout the majority of 2023, with market participants experiencing sluggish consumption both domestically and in export markets. ABS sellers also grappled with narrow profit margins amid these conditions.

In Asia, regarding demand, the ABS market witnessed a fall, including downstream facilities in the home appliance and automotive sector in the line of a lack of enthusiasm for stocking, while primarily concentrating on depleting existing inventory for this time frame. Enterprises leaned towards maintaining production within their procurement operations, creating challenges in stimulating demand. Middle-stream traders adopted a cautious approach contributing to a sluggish circulation of spot goods that acted as a drag on the ABS market. The overall performance of ABS upstream materials in December was subpar, offering weak support for the cost aspect of ABS. Petrochemical plants experienced a marginal decline in their high operating levels, with limited alleviation in supply pressure. Conclusively, the post-holiday scenario may witness an increase in spot inventory positions, and the outlook for rectifying the supply-demand imbalance in the market appears unfavorable for the coming quarter.

In the European and US markets, the supply chain has encountered disruptions over an extended period. In addition to the recent incidents in the Red Sea prompting shipping companies to pause or redirect their vessels, unprecedented drought conditions and consequent shipment delays in the Panama Canal have further contributed to recent anxieties.

Despite worries regarding potential disruptions in freight, ABS traders and manufacturers remain more focused on the subdued downstream demand, leading to only moderate price fluctuations during this period. The automotive sector is cautiously optimistic about the upcoming year, anticipating a gradual decline in downstream purchasing activities in 2024. In conclusion, the ABS market is expected to exhibit mixed sentiments in the weeks ahead.

As per the ChemAnalyst, the ABS demand is expected to face ongoing challenges from sluggish downstream consumption and economic conditions, exacerbated by reduced seasonal inquiries during the winter. Nevertheless, the prospect of inflation easing holds the potential to contribute to a gradual recovery in activity in the latter part of the upcoming year, offering a source of optimism for ABS industry participants. Conclusively, the ABS market is anticipated to linger at a subdued level during the initial quarter of 2024 across the globe.

Related News

ABS Market Enters April on a Steady Note after hikes in previous month in EU and Asia
  • 08-Apr-2024 2:59 PM
  • Journalist: Jai Sen
Asian ABS Market Sustains Strong Performance in the Mid-March 2024
  • 21-Mar-2024 3:48 PM
  • Journalist: Xiang Hong
INEOS Styrolution Showcases Sustainable ABS at Arburg Tech Days 2024
  • 19-Mar-2024 10:53 AM
  • Journalist: Emilia Jackson
LG Chem Ceases Operations at Styrene Monomer Plant
  • 13-Mar-2024 5:35 PM
  • Journalist: Harold Finch