The gap between Europe and Asia has widened throughout 2020 and is now at unsustainable levels.
ABS prices in November are heading for a steep climb in Europe, with increases heard up to €160/mt on the back of an extreme market tightness.
Acrylonitrile butadiene styrene (ABS) prices in Europe normally tend to move with costs. But the severe tightness means most freely negotiated prices will face big increases.
The ABS market has been tightening since the summer. An absence of Asian imports, a recovery in demand in Europe, and turnarounds all helped to reduce supply.
What is more, the situation does not look like it will change any time soon. Asian prices continue to rally, Europe’s demand is strong, and costs are on the way up.
A sizeable part of the ABS market is based on free negotiations and the rest on contracts which are tied to costs.
While contracts will certainly move up €50/mt, the rest of the market will have to face increases of more than €100/mt.
Most of the sellers in Europe are sold out, stretching to satisfy simultaneously a recovery in demand and the absence of Asian ABS.
The ABS prices range in Europe is expected to widen to €400/mt in November.
ABS prices in Europe have been under pressure since 2018. During this time, producers lost margins. But since the summer, the market reversed and this trend continues in November.
Europe is a net importer of ABS, mainly from Asia. But the strong Asian market has left many buyers struggling for volumes.
ABS prices in Asia have climbed to above $2,000/mt, a price substantially higher than in Europe.
In the past, Asian imports have always been offered €100/mt below domestic prices.
Therefore, in order to attract imports, buyers in Europe may soon have to accept much higher prices.