Southeast Asian ABS market falls further on weak upstream and demand

The Southeast Asian ABS market has breached below the $1600/ton this week and might extend the weakening trend in the coming days given the persistent bearish upstream market and sluggish demand, sources said.

At the time this report is published, Fareast Asian cargoes are available in the range $1550-1570/ton CIF Indonesia, LC AS term while suppliers have expressed the willingness to negotiate on deals.

“Prices have been dropping $50/ton weekly over the past month. We are unable to even deplete the existing inventories, let leave alone new replenishment,” an Indonesian trader commented. The source added that South Korean seller have been actively inviting to bids, yet the less than optimistic near-term outlook keeps buyers on the sideline.

Looking at the upstream market, styrene monomer (SM) plunged to the lowest level in 18 months this week, drag by the lengthy supply condition. Compared to a month ago, SM cost based on FOB South Korea term loses more than $300/ton. 

There have been reports that spot supply for SM in China remains lengthy while purchasing interest in diminishing following the recent plunge in the energy complex. Players are not expecting any rebound in the near term as downstream customers are lowering operating rate to minimize loses.

In fact, Chimei Corporation cut operating rate at its 850,000 tons/year ABS plant in China this week citing the weak demand and high stock levels. 

“For now, we are waiting for import ABS prices to go below the $1500/ton threshold,” a regional buyer added.