ABS (Acrylonitrile Butadiene Styrene) prices remained stable in the North American market in recent weeks due to moderate demand and balanced inventory levels. Moreover, rising geopolitical tension globally has brought the state’s industrial production for ABS to a standstill since May 2024. Moreover, from the downstream automotive industry demand, US auto sales experienced a slight increase in May compared to the previous month and showed year-over-year growth on a seasonally adjusted annual rate (SAAR) basis. However, demand continues to encounter challenges due to widespread staff reductions and downstream companies scaling back procurement.

In the week ending June 7, 2024, the US ABS export prices were stagnant, driven by tighter global supply that also outweighed increasing domestic production. Ineos Styrolution, which operates one of North America’s largest ABS facilities in Altamira, has declared force majeure following a reduction in water supply by local authorities.  While some production lines remain operational, they are running at reduced capacities. The company is supplementing local supply by importing from its overseas facilities. Similarly, Sabic, which produces ABS, and other plastics in nearby Tampico, has announced a temporary shutdown of its site. The decision follows a notification from the local commission on drinking water and sewage, stating it can no longer supply water to the local system, thereby impacting industrial operations in the Altamira region.

Furthermore, the downstream demand remained moderate in the US ABS market as the uncertainty surrounding the 2024 US presidential election is another challenge impacting consumer sentiment in the industry. Despite this, sales continue to rise, which is significant for the ABS industry due to the automotive sector's extensive use. Products like ABS, are integral to auto production, including antifreeze and other fluids, catalysts, plastic dashboards, rubber tires and hoses, upholstery fibers, coatings, and adhesives. Current data indicates that polymer usage is approximately 192 kilograms per vehicle.

As per ChemAnalyst, ABS prices in the American market are expected to rise due to tight supply, as U.S. producers remain uncertain about the duration of reduced production rates. Some buyers are postponing spot purchases, anticipating a price drop as summer progresses. However, the seasonal increase in downstream automotive demand may further drive the upward trend in U.S. ABS prices. In May and June 2024, U.S. crude futures prices averaged between USD 73 and USD 78 per barrel. At these price levels, there is no compelling indication to either increase or decrease upstream crude oil production at this time.