Players: ABS prices might extend firming trend as butadiene surged

In Asia, butadiene costs based on FOB Korea term has been escalating since late September 2016 and have doubled the value in recent week, touching multi-year high levels. Butadiene price rose $300/ton on last Friday alone, stimulating market expectation for a prolong hike in the downstream ABS market.

There is no fresh ABS offering from international suppliers during the first half of today trading session; however, most Fareast Asian suppliers are lifting their offers to above $1800/ton level in the past week. A regional trader received Korean ABS prices at $1845/ton, CIF Vietnam, LC AS term informed, “Suppliers might attempt to hold firm on their cargoes in the coming month due to higher production costs; however, our regular manufacturing customers are unable to cope with such rapid price hike and many are planning to shutdown if raw material prices increase further.”

A Chinese trader added, “Couple of our international suppliers have suspended their offers claiming out of allocation. Buying interest in China is still healthy at the moment, as severe air pollution has triggered demand for air purifier solutions among end users. There is no sign of any downward movement in the near term, yet the bubble might pop at one point of time.”