Sellers stepped back from initial hike targets
Nevertheless, initial hike attempts proved to be unworkable so far and several distributors stepped back from their initial hike targets to concede to hikes of around €40-50/ton or smaller increases in a few cases. This was triggered by persistently slow demand and comfortable supplies.
A distributor said, “We trimmed our initial offers slightly to entice buying interest. Our stocks are still comfortable.” Demand in the main ABS applications remained slow due to the lower production in the automotive sector in particular. Uncertainties over the economic outlook and Brexit also pose an obstacle for smooth trading activities in the market.
Surging upstream poised to overshadow weak demand
Upstream, Ineos Nitriles declared force majeure on its ACN output from Cologne, Germany on February 27th due to a disruption in ammonia supplies.
Planned and unplanned production outages paved the way for tighter supplies across the board. Accordingly, spot ACN prices posted remarkable increases of $250/ton since around mid-February to be reported at $1550/ton CIF NWE.
Spot styrene prices on an FOB NWE basis also continued to follow an upward trend to hit their highest levels not seen since late October 2018 on a weekly average.
Meanwhile, early expectations for April styrene contracts call for increases of up to 3 digits.
Another bullish month ahead in ABS market
Although overall trading remains thin, demand is expected to improve in the days to come amid expectations to see a fresh round of hikes in April. Some buyers reported that they mull over pre-buying in order avoid paying larger increases next month.
“Firmer April talks might lure buyers back to the market,” a trader opined
In Austria, a converter commented, “Feedstock disruptions and rising costs may reinforce the firming trend.”