After the recent slump from March to May, ABS prices are on the way up. But there is some way to go before reaching pre-pandemic levels.
Acrylonitrile Butadiene Styrene (ABS) prices in Europe increased from June to July by €70-90/mt, according to GC Intelligence price assessments.
Producers had announced price increases at the beginning of July.
The main driver that supported ABS prices in July was the jump in raw material prices, namely the main one, styrene.
The increase in the styrene price was more than expected as it followed the recent rebound in upstream costs, from crude oil to benzene.
Before this latest rebound, costs had plummeted during lockdowns and are only just recovering. And there is some way to go before they reach pre-pandemic levels.
The total cost increase from June to July was for the most part fully passed on to customers. As such, producers were able to maintain or even increase margins on most accounts.
Producers were able to maintain margins because several factors have improved market fundamentals in July. The most important one is an apparent retreat of Asian imports .
Asian imports make up around 35-40% of the European market. Occasionally when economics do not work to ship ABS to Europe, imports start to retreat and tighten supply.
In addition to the reduction in imports, better demand also helped to improve fundamentals. Most market segments are improving, even if volumes remain below last year’s levels.
The pandemic and subsequent lockdowns meant demand from some segments plummeted. Construction and automotive suffered considerably. And now, while the former recovered, the latter is still struggling.
However, the uneven recovery reflected price movements in July. Some players reported lower changes, and others even said they managed to secure reollovers. These price movements, however, were exceptions and do not represent the bulk of price movements in July.
ABS prices in Europe look set to increase again in August and September. But heightened uncertainty over economic conditions and renewed spikes in infections will likely limit the recovery.