Low demand and logistic issues are fuelling this weak trend.
London – Styrene Acrylonitrile (SAN) trade suffered as the virus outbreak slowed down demand.
Background
Asian styrene acrylonitrile imports play a strong role in the European market. South Korea is by far the major trading partner.
In the past few months, demand in Europe and Asia was already slowing because of trade wars. January figures showed that trade was declining.
As the virus started to slow down demand in Asia, it initially fueled exports to Europe.
But European buyers were fearing logistics issues. As such, they started to rely more on domestic suppliers. Because of this, there was less demand for imports.
However, worries over a global pandemic increased and slowed demand further.
Moreover, buyers relied even more on domestic suppliers as more countries went into lockdown.
The latest data is from January to February.
The data shows that exports were the lowest since 2018. And imports were lower than 2019.
In 2019, imports from Asia increased as US/China trade war slowed demand in the region.
But now there is a strong chance this trend will continue for the rest of the year.
Outlook
The outlook remains negative.
Consumers will probably not rush out and spend. Low demand in Asia and Europe should keep trade subdued.
What is more, worries over logistic issues will persists. As such, buyers will rely more on domestic suppliers.
There is also another factor that can explain why styrene acrylonitrile trade is slowing down.
The data could also represent better demand in Asia. However, this argument is weak as there is little to suggest good demand in Asia.
So far market feedback suggests a slowdown in demand in both Europe and Asia.
As the threat of the virus continues to fuel uncertainty, a sudden change is unlikely to happen.
Even if the virus is brought under control, the economic damage will not go away any time soon.
But as countries learn to mitigate the threat of the virus, demand could improve.
However, participants will probably have to wait until next year before returning to pre-virus activity.