Global ASA Prices Drop in August Amid Feedstock Price Decline and Weak Downstream Demand

The global price of Acrylonitrile Styrene Acrylate (ASA) witnessed a notable fall in August, primarily driven by a decline in feedstock prices and lower demand from suppliers due to underperformance in downstream market sectors. Key feedstocks such as Acrylonitrile, Styrene, and Acrylate experienced price decreases, which directly contributed to the reduced cost of ASA. Additionally, weaker demand from sectors like automotive and construction impacted suppliers, further pressuring prices. Despite this, buoyant demand from the overseas market also played a role in influencing global ASA prices, though it wasn't enough to offset the overall downward trend. This confluence of factors led to the price decline for ASA observed across markets.

In the South Korean market, the price of ASA witnessed a notable decrease this month, marking a 6.7% drop to 2,380 USD/MT FOB-Busan. This decline in the ASA price is largely attributed to the fall in feedstock prices, with Acrylonitrile down by 3.7%, Styrene by 2.30%, and Acrylate monomer by 0.98% in August. On the manufacturer's front, Lotte Chemical's expectations for Q3 in the advanced material segment persist, with profitability expected to weaken despite high seasonality, mainly due to increased new capacity additions and rising freight costs. The downstream market also saw a decline in automobile sales, with a 4.2% decrease to 105,504 units from July and a 0.9% decrease year-on-year. In the construction sector, lingering credit risks and slower private consumption continue to challenge policymakers. Meanwhile, PMI numbers showed a notable increase in August, signaling positivity in other manufacturing activities. These factors have cumulatively resulted into influencing the price of ASA in the South Korean market.

In the European market, particularly in Germany, the price of Acrylonitrile Styrene Acrylate (ASA) witnessed a notable decrease to 2,530 USD/MT CFR-Hamburg, marking a decrement of 5.95%. This decline in ASA prices is primarily linked to the lower sourcing price from major exporters in the South Korean market. In the downstream automobile sector, a total of 197,322 units were sold in August, marking a significant decrease of 17.2%. Additionally, Germany's construction sector remains mired in a steep downturn midway through the third quarter, reflecting weak demand and rising input costs. Activity fell at a faster rate, with particular weakness in the housing sector, although some resilience was seen in civil engineering. Suppliers are reluctant to place additional bids for inventory accumulation due to adequate inventory availability.

According to ChemAnalyst's anticipation, the price of Acrylonitrile Styrene Acrylate (ASA) is expected to face a challenging turn towards a decrease. This anticipated decline in ASA prices is aligned with expectations of lower demand from suppliers, driven by weaker performance in the downstream market. Additionally, the manufacturers' outlook, which foresees lower profitability in the segment, will be a key factor influencing global ASA pricing dynamics. These elements collectively contribute to the forecasted downward trend in ASA prices.