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ABS: MARGINS ARE UNCHANGED IN FEBRUARY

March 11, 2020

LONDON (GC Intelligence) — European Acrylonitrile Butadiene Styrene (ABS) margins were unchanged in February as prices moved in line with costs.

The price increase on most ABS grades was €30-35/mt, with larger increases earlier in the month.

As it became clear that costs, mainly styrene prices, would post big falls in March, sellers had to work much harder to defend margins.

Margins contracted for most of 2019 because of low demand and strong competition from imports.

This scenario does not look like it will change in 2020, especially since a reduction in demand in China will likely keep imports competitive.

Competitive imports will add to the pressure on margins from low demand expected as a result of the coronavirus.

The outbreak has increased uncertainty and made any forecasts extremely difficult.

Many buyers cannot predict their rate of activity in the coming months and are aware that the risk is very much to the downside.

What is more, the potential for a recession has increased and many participants are inclined to keep healthy balance sheets.

These factors combined will most probably result in poor demand in the next few months as buyers will start to assume a cautious stance and live hand to mouth.

NOTE: For price indices, forecasts, and a more in-depth market analysis take a look at the GC INTELLIGENCE® Market Reports…

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