Asian ABS producers cut operating rates amid rising costs

Petrotahlil - A few traders operating in China reported that some Asian ABS producers have reduced operating rates at their plants in the face of rising production costs.

Spot ACN prices on CFR China basis have reached their highest level since late October while butadiene and styrene prices have posted modest gains on the week.

Despite higher upstream costs, China’s import ABS market has witnessed a fresh round of significant decreases this week as demand has vanished given growing trade tensions.

An agent of a Taiwanese producer reported, “Our supplier has lowered its production rates as producers are not able to reflect rising costs to their offer levels for ABS.”

The overall range for import ABS injection prices currently stands at $1430-1540/ton CIF China, cash. The range indicates hefty decreases ranging from $50/ton to $90/ton when compared to last week.

Based on the prevailing spot ACN, butadiene and styrene prices, theoretical production costs for ABS currently stand at around $1495/ton, up by $40/ton from last week.

“A reduce in production rates may cushion price drops in the near term. However, market sentiment is not likely to pick up due to the ongoing trade war with the US,” a China-based trader opined.

In feedstock markets, spot ACN prices climbed further by $35/ton on the week to $2085/ton CFR China while butadiene prices jumped $30/ton to $1030/ton with the same terms.

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