ABS Market Enters April on a Steady Note after hikes in previous month in EU and Asia

The Acrylonitrile Butadiene Styrene (ABS) market experienced stability in the first week of April 2024 after sustaining substantial price surges amidst supply constraints and rising upstream costs in the previous weeks in Asia and the European region. Thus, ABS market players mostly anticipate stable to slightly firmer conditions in the upcoming month, citing both declining demand and cost pressures as contributing factors for further price fluctuations.

The European ABS market has witnessed significant price escalations in the past two months of 2024, fueled by soaring feedstock styrene prices and limited import offers. As a result, purchasing activities slowed down in March as market participants reacted to the inflated price levels. However, there are signs of stabilization in the ABS market as they head towards April in the line of high upstream cost pressure.

From the upstream perspective, spot feedstock Styrene prices, despite experiencing fluctuations throughout the month, remain close to their peak, observed in March 2024. The latest ABS market analysis suggests a predominantly stable to slightly firmer outlook for the next Styrene settlement. Additionally, the April Butadiene contract surged earlier at the end of Q1 of 2024.

On the demand side, the purchasing activities in the European ABS market slowed down ahead of the Easter holiday, exacerbated by earlier pre-buying efforts to hedge against further price hikes. Furthermore, the persistent stagnation in derivative sectors amidst economic challenges has kept buyers on the sidelines. With holidays affecting trading activities and potential relief in supply levels due to the arrival of import cargoes, further ABS price hikes in April may be hindered, according to industry experts in the Eurozone.

Similarly, the Asian ABS prices also exhibited stability at the start of April 2024 after a moderate rise in the last quarter. The ABS industry initially experienced load reduction and adjustments resulting in an ABS price increase in the previous weeks. Recently, the maintenance at the PetroChina Jieyang plant has neared completion, leading to a rebound in industry plant load to over 56%. However, the load on ABS aggregation enterprises remains relatively low, impacting the market's tight supply pattern. Despite this, production and inventory levels of production enterprises are not high, and overall, the supply side's support for spot goods remains acceptable.

In Summary, the performance of the three upstream materials of ABS showed a mixed trend, which continued to support ABS costs in the Asian market. The construction of petrochemical plants remains at a low level, with no significant supply pressure. Despite high ABS prices, some buyers have entered the market, resulting in flattened demand support for spot goods. In April 2024, traders engaged in price reduction and order-taking operations.

As per ChemAnalyst, presently, ABS prices are expected to be balanced between tight supply and a slow increase in downstream demand. It is anticipated that the ABS market will remain robust at the beginning of next month due to the impact of low supply and escalating upstream cost pressure in the European and Asian markets.