Weak Market Sentiment Drives Down European Acrylonitrile Butadiene Styrene Prices
- 25-Nov-2022 5:24 PM
- Journalist: Patrick Knight
The Acrylonitrile Butadiene Styrene (ABS) prices witnessed a decreasing trend in November 2022 in the European region. Since July, prices have continuously fallen because of high supply length and weak demand in the European region. Imports continued to be offered at a competitive level, adding to the decreasing price trends scenario.
The rising cost of living affected ABS prices by decreasing demand in the automotive and home appliance industries. In the current economic downturn, consumers cut back on non-essential purchases like electronics and home goods. This reduced resin requirements, which run rate reductions could not counterbalance.
As a result of the economic downturn, Asian ABS prices have also been trending downward. Demand was stifled by China's commitment to a zero-coronavirus strategy and the local currency's decline. At the same time, as the cost of shipping containers fell, Asian shipping companies moved their cargo to Europe.
Despite European region production halts, availability has still been deemed as long. In November, the automotive sector slightly improved in the European region, and the price of ABS saw a gone somewhat up in the previous week while the construction sector remained weak. Trinseo's ABS and other plastics production saw a 25% drop in sales during the third quarter of 2022, attributed to weak construction and consumer durables markets. The sharp decline in energy prices demonstrates that producer profit margins have improved after the August peak. That is to say; ABS prices are also not supported by the cost side.
The analyst reported that during the previous week ending November 18, 2022, the price of ABS reached USD 3250/MT on an FD Hamburg basis.
According to ChemAnalyst, the price of ABS in the European market is anticipated to decrease due to cheap Asian imports and weak construction industry demand. In addition, market participants are likely to destock the product at a lower price at the end of the year.