Home Latest News & InsightsABS ABS Offers Sink Below €1,000/mt in June

ABS Offers Sink Below €1,000/mt in June

June 3, 2020
Asian volumes are arriving to Europe and are very competitive.

Acrylonitrile Butadiene Styrene (ABS) offers sink below €1,000/mt in June. While it is too early in the month, such low prices could indicate how competitive the market is shaping out to be in June. It is understood that some participants are receiving offers at around €950/mt for natural ABS from Asia. This is approximately €200/mt below European domestic prices. Asian imports are normally around €100/mt below European prices.

However, such low offers come as no surprise. It takes two months for volumes to arrive to Europe from Asia. And two months ago Asian ABS prices were very low. The virus outbreak which hit the continent first pushed costs and demand down and ultimately ABS prices. At the time, there was concern that at some point, either in May or June, cheap ABS would reach Europe. This has not happened in May but it seems it is happening in June.

For now, only a few are receiving such offers. But it is early in the month and therefore difficult to judge whether this is going to set the agenda for negotiations during June. However, fairly reliable sources said such prices are also coming from European ABS sellers as they do not want to lose market share.

Meanwhile, costs are on the way up in Europe as activity increases, albeit at a slow pace. Sellers could find themselves fighting to fulfil this gradual increase in demand. As a result, there is a good chance that margins could fall in June. This very same scenario happened a few months ago in Asia. When the market opened up and demand increased, competition intensified and ABS prices fell.

Margins in Europe decreased during 2019 and have been more stable in 2020, but there is a strong chance that this could change again in June.