Southeast Asian ABS market surged on costs, demand remains subdue

Southeast Asian players are surprised with the extent of price hike in new ABS offers they received after the Lunar New Year holiday. Some suppliers have lifted offers by up to three digits on the back of stronger upstream styrene monomer costs.

At the time this report is published, import ABS based on CIF Southeast Asia stands in the range $1530-1590/ton, LC AS term.

Data from CommoPlast showed $92/ton hike in styrene monomer costs since 2 January 2019 thanks to strong demand from China market, to reach $1027/ton FOB South Korea on 14 February. Such development has evidently supported the ABS market.   

And yet, it appears that Southeast Asian buyers might need time to accept the drastic increases in the latest ABS prices amid comfortable inventory on hand. “Our customers did not respond toward the offers and therefore, we decided to collect buy ideas instead,” an international trader offer Taiwanese ABS at $1590/ton CIF Vietnam said.

A number of regional buyers are taking into account the possibility that the cost-push might soon fade, now that styrene monomer started showing signs of stabilizing. “While styrene monomer is firming up, butadiene has been soft. The upside of the ABS market might be capped as a result,” an Indonesian buyer said. 

The uncertainties related to the trade war between China and the USA are making outlook even cloudier, which reinforce buyer’s plan to wait on the sideline.