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ABS: buyers put off restocking over uncertainty

February 27, 2019

GC Intelligence (London) – The Acrylonitrile Butadiene Styrene (ABS) market in Europe failed to recover in February. Buyers were reluctant to commit to big orders and were understood to be living hand-to-mount.
February is a period of the year when buyers start to restock in anticipation of a pick up in seasonal demand and higher costs during the spring months. With the growing uncertainty over many aspects of the market, including Brexit, automotive and trade disputes, buyers are keeping inventories low. The current very low prices were not enough to increase demand.
The European ABS market remains oversupplied and there is still a stronger than normal presence of Asian imports, despite the slight recovery in the region. The recent Chinese slowdown led to lower demand in Asia and lower prices and margins followed. As imports from Asia represent more than 30% of the European market, a significant decrease in margins usually results in greater efforts to ship ABS to Europe.
Market participants are waiting for a resolution to the trade dispute and a recovery in profitability in Asia, which in turn should help to ease some of the supply pressure in Europe. There are already signs that demand is picking up in Asia, but more evidence is needed to view this as the start of a trend.
Should market uncertainty endure, buyers will likely continue to keep inventories low, possibly throughout 2019.

Source: GC Intelligence

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