US ABS Prices Remain Stable Amid Rising Demand, While Prices Downturn in Europe

In the first week of July 2023, the price of Acrylonitrile Butadiene Styrene (ABS) remained stable in the USA. At the same time, there was an increase in demand for the automotive sector and a rise in inquiries for housing in the USA. However, European ABS market players, including Trinseo, announced a price decrease for the first week of July due to weak consumer enthusiasm in downstream industries such as the automotive and housing sector, while unchanged feedstock Styrene price trend in the European market this week.

Despite the Federal Reserve's increase in interest rates in late June, there was a slight recovery in the demand for the automotive sector in the US. The housing sector is highly sensitive to interest rates and currently showing strength. The surge in demand for housing and automotive is driven by improved offerings and limited supply in the US housing market. The lack of available stock and high rents have fueled consumer enthusiasm for purchasing new homes in the USA. This resurgence in the housing market has positive implications for ABS and other polymer industries. However, the recent surge in US housing activity may not be sustainable in the long term due to the downturn in the regional market's economic conditions and the hot summer weather, which is expected to result in a slower season for the housing market according to the National Association of Realtors (NAR) in the USA affecting ABS demand fundamentals.

In the Eurozone, one of the primary manufacturers of ABS, Trinseo, announced the price decline in the first week of July 2023, according to the press release by the company. The elevation in the interest rates caused a slump in the inquiries from the region's housing and automotive sector. The regional downturn in factory activity in June 2023 also affected the downstream market performance of ABS in Europe. On the supply side, stability in the feedstock Styrene prices in the week ending July 7, 2023, supported the final prices of the ABS.

As per the ChemAnalyst, the ABS prices might gain upward momentum in the H1 of July 2023, with an expected rise in the housing demand in the USA and ease in the soaring interest rates and production cuts in the face of the fear of Hurricane season. Moreover, the volatility in the upstream crude oil prices might get influenced by the prices of the ABS amidst rising supplies and unchanged downstream demand fundamentals in Europe.