News Code : 43812

Petrotahlil :Import ABS prices in China and Southeast Asia have been stable for the past two weeks after rebounding from their multi-year lows. Players are now discussing the ABS outlook amid the opposite pressures from strong oil markets and approaching Chinese New Year holidays that have already restrained downstream buying appetite.

Import ABS stabilizes after 3 weeks of firming

In Southeast Asia and China, import ABS offers responded to firming crude oil prices and upstream costs as of mid-November and early December, respectively. This came after prices mostly followed a downward trend in the past 2 months and hit their lowest levels since August 2016.

Following the short-lived rebound, both markets have stabilized amid volatile styrene costs and buyers’ hand to mouth purchases.

SM is volatile following rebound in mid-Nov

Spot styrene prices rebounded from more than a decade low as of mid-November after spiraling down for around 2 and a half months, according to ChemOrbis Price Wizard. However, they are still standing 16% below early September levels. Spot styrene prices both on CFR China and FOB Korea basis indicate decreases in the past two weeks, defying firmer energy costs.

Meanwhile, butadiene prices on CFR China basis rose by more than 6% since mid-November, according to the weekly average data on ChemOrbis Price Wizard. ACN prices indicate less than a 1% increase since late November. But, they are 28-30% lower from their peak in August and May 2019 respectively.

Approximately 58% of styrene, 25% of acrylonitrile and 18% butadiene are used in the production of ABS.

Pre-holiday lull outweighs strong upstream

Global crude oil prices jumped on Friday to hit their highest levels since September after the news regarding a US airstrike in Iraq, which raised concerns that escalating tensions may disrupt regional oil supplies.

Surging crude futures have failed to find reflection on the market so far as the holiday mood made itself felt more profoundly recently. Since the Chinese New Year serves as a factor curtailing demand, players think that it casts a shadow on the future outlook.

Asian ABS markets are widely believed to move sideways in the near-term. However, decreases are out of discussion as cost-support will strengthen sellers’ hand.

A trader from China reported, “The number of transactions is limited despite supportive costs. If it were not for the hand-to-mouth purchases, Asian ABS prices would be under upward pressure. Converters feel little incentive to stock up as the holidays approach.”

Will buyers abandon cautious mood on trade deal, surging crude?

Players discuss if ABS prices can resume firming as sellers are also expected to renew confidence, with surging crude oil futures and positivity around the signing ceremony of the “phase one” trade deal on January 15.

This may scatter the cautious mood among buyers and lure them back to the market, according to players.

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Source :ChemOrbis

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