ABS Price Dynamics: Rising in Europe Amid Supply Cuts, Market Stabilize in North America

Prices for Acrylonitrile Butadiene Styrene (ABS) saw an upward trend in the European market, whereas the North American and APAC markets witnessed a phase of stabilization. The recent rise in ABS prices was driven by supply cuts in Europe and an increment in the upstream materials, Styrene and butadiene prices in the last week of August 2023. Conclusively, the increase in polymer prices in Europe was prompted by the decreasing inventory availability amid a reduction in the production run rates and supply shortages in the line of unchanged demand fundamentals. However, the prices of ABS in the APAC and USA markets fluctuated in a narrow range due to weak cost support from the upstream side and static downstream demand in the automotive and housing sectors.

In the USA, the ABS price trend was stagnant in the week ending August 25, 2023, as consumer purchasing sentiments slipped amidst rising inflation and weakness in the housing market. Moreover, on the automotive demand side for ABS, a UAW (United Auto Workers) strike could cut monthly demand for polymers like ABS from Ford, General Motors (GM), and Stellantis, the three big automobile producers in the US market, by 5,000 Tonnes each for ABS based on the first half of the year volumes. The Members of the UAW union approved these strikes at Ford, General Motors, and Stellantis, as per the latest insights of the last week. Therefore, the producers opted for a cautious approach towards the ABS market momentum and reduced production run rates for this time frame.

The August contract prices for ABS rose in Europe on the account hike in the upstream materials, Styrene, and Butadiene costs. Meanwhile, the global economy has shown little sign of a resurgence in ABS demand, with August exhibiting a similar lackluster performance in the domestic market of Europe. The persistent weakness in demand has resulted from various factors, majorly the holiday season, which typically leads to a decrease in consumer spending and business activity in the automotive and housing sectors of the regional market. Additionally, the Economic uncertainty stemming from domestic and international sources has further dampened the prospects of a demand resurgence. Geopolitical tensions and shifting trade dynamics have left businesses cautious about their expectations, resulting in a wait-and-see approach toward the ABS market dynamics.

Asian ABS prices fluctuated within a narrow range due to the slow increment in inquiries from the domestic and international markets. From the supply perspective, the ABS market has recently experienced a high load and an increase in the total operating rates in China. This week, there has been a surge in inventory levels and a decline in the upstream material costs, including Styrene and Butadiene.

As per ChemAnalyst, the ABS price trend is anticipated to continue to fluctuate in the narrow range in September globally, backed by the inadequate recovery in the downstream demand from the automotive and housing sectors coupled with sufficient inventories and a rise in supplies.