Home LatestABS ABS PRICES FIND SUPPORT IN OCTOBER

ABS PRICES FIND SUPPORT IN OCTOBER

October 25, 2021

ABS prices find support in October, increasing €20/mt. After a surprise decrease in September, prices stabilized in October, but look set to spike again in November.


ABS prices are expected to post big increases in November. This is mainly to do with the anticipated spike in the feedstock styrene contract price. A sharp climb in styrene spot prices raised expectations of triple digit increases in the November contract.

ABS producers will likely pass on the higher styrene prices with little resistance because supply remains tight. The shortage of ABS has not eased. The high freights and delays are keeping imports low. Demand remains strong in many markets. And supply disruptions continue.

For example, Versalis suffered a technical issue in Mantua in September. The event reduced capacity at the plant to around 50%. And it forced the company to declare force majeure (FM) which remains in place at the time of writing.

The European acrylonitrile butadiene market (ABS) has been one of the worst hit polymer markets during the pandemic. The disruptions in the freight markets and good demand in Asia reduced imports which are an integral part of the European supply picture.

With the market likely to remain snug for the foreseeable future, the prospect of a spike in costs in November will surely translate to a big increase in ABS prices.

What is more, the surge in utility costs complicates matters further for market participants. The higher costs of gas and electricity forced some producers to announce hefty surcharges over and above the movements in costs.

The surge in energy prices is an additional factor supporting prices. It also raises the chances of heightened volatility for ABS prices in the next few months. A spike in prices could eventually lead to a big downward correction.

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