With the End of the Chinese Lunar Holidays, Asian ABS Prices Witness Bullish Trend
- 13-Feb-2023 2:50 PM
- Journalist: Motoki Sasaki
Acrylonitrile Butadiene Styrene (ABS) prices showed a stable trajectory at higher costs in the APAC region during the week ending February 10, 2023, with rebounding downstream demand and tight stock availability. Furthermore, elevating import inquiries after the end of the lunar holidays in the Chinese market is likely to contribute to the rise in commodity prices at the end of February 2023.
The stability of production activities, combined with an increase in feedstock costs (Acrylonitrile and Butadiene) and a recovery in downstream offers, resulted in an increase in ABS prices in China's domestic market in the mid-first quarter of 2023. ABS prices rose in East China amid improving purchasing confidence amongst domestic buyers, and as a ripple effect, sellers raised commodity prices in the first week of February 2023 with the end of the Lunar Holidays in the country. Before the holidays in China, buyers had adequate stocks and witnessed weak demand in the downstream sectors for ABS. Furthermore, Zhejiang Petroleum & Chemical announced the establishment of a new ABS production factory in Zhoushan with a 400k tonnes/yr capacity in January 2023.
The February export costs of ABS have risen in the Asian market with expanding domestic inquiries from India due to approaching demand in the housing segment and consistent offers in the automotive sector. The tightening of the supply-demand balance is leading to a strong tendency to build up inventories among the ABS market players in anticipation of higher prices in February 2023.
According to ChemAnalyst, ABS prices are expected to rise at the end of Q1 2023, supported by rising styrene feedstock costs due to limited production in China and anticipated demand in downstream industries. Sellers believe that domestic demand for ABS will rise in Asia amid tight supplies and a rebound in domestic offers in the downstream housing segment of the region.