Market participants confirmed weaker ABS sentiment globally, driven by lower-than-expected demand in major markets including China, Southeast Asia, Turkey and Europe. Import prices in China and Turkey have continued to slide to new lows amid mounting selling pressure, despite a fresh rally in the Asian spot styrene market.
As consumers end up cutting spending, downstream sectors including autos and home appliances have grown surprisingly slowly. Inflationary pressures, supply chain disruptions and anti-Covid-19 measures in China have limited demand for raw materials at the converter level.

Blockades cover crop activity in China

China's import ABS market has been on a downward trend since around mid-March. Import ABS prices in China have defied a slight increase in spot styrene prices over the past two weeks. The overall import price range has seen a cumulative decline of 11% since March and dropped below the $1900/ton CIF threshold, marking the lowest level since October 2020.

The Covid-19-related blockade put additional strain on demand, while a sharp depreciation of the yuan against the US dollar hurt demand for imported goods.

Buyers also prioritize buying from the domestic market, where prices are currently lower than import prices for some time. The ChemOrbis Price Index shows that the weekly average of imported ABS prices in China was $130/ton higher than local prices for the week ending May 20.

China's blockades have strongly affected trading activities. Strict lockdown measures have taken a toll on Chinese car sales. The home appliance sector has also suffered from China's continued lockdown despite the peak season.

While the recent reopening of Shanghai has sparked some optimism, the road to recovery will be bumpy due to uncertain demand.

Southeast Asia stuck between cost and demand

In Southeast Asia, import prices fell to the Chinese market in March and fell to mid-February prices in May. However, import ABS prices were flat last week as the market got stuck between the effects of the impact. The spillover from the Chinese market is weak and styrene prices are higher.

In addition to the weakening of China, buying demand in Southeast Asian markets is also affected by the weakening of the local currency against the US dollar, making imported shipments more expensive. Buyers have been taking a wait-and-see stance, while sellers pin their hopes on a potential demand recovery in regional markets as China returns.

Turkey sees significant price drops despite limited supply

In Turkey, import prices have been sliding since the second half of April, due to a drop in demand for plastics. The ongoing weakness in demand has outweighed the shortages because of sellers' controlled imports and long delivery times. In fact, sales of Turkey's main home appliances fell 16% in January and 7% in February and March, both compared with the same period last year.

The ABS market has ushered in the post-Eid phase with fresh price drops and to the lowest level since February.

ABS quotes from Europe were initially buoyed by styrene settlement prices, while May deals closed at a steep drop from April after sellers stepped back.

Despite the logistical challenges, ABS import quotes from Asia have continuously gone down due to unfeasible popular prices.

Quotation ABS inj. Korean natural products fell by $50-100/ton for the week ending May 20th and are estimated at $2600-2720/ton CIF Turkey, cash, tax-exclusive. According to the ChemOrbis Price Index, prices have cumulatively fallen 6% since the beginning of April.

European prices succumb to weak demand

In Europe, sellers had to adjust quotes to flat or lower prices as weak demand outweighed higher styrene settlement prices. Escalating prices and high utility costs have deterred buyers from making purchases, which has stymied sellers' initial bids in most cases.

Sharing the same fate as other markets, Europe's automotive sector witnessed a sharp decline that negatively affected ABS demand. Weakness in the sector was attributed to supply chain difficulties and high inflation.