Northwest European acrylonitrile-butadiene-styrene and polystyrene products have lost ground in the Turkish, North African and even European markets this year due to significantly lower Asian prices, industry observers said Wednesday.
Free delivered Northwest Europe ABS prices were assessed at Eur2,085/mt ($2,777/mt) on Wednesday -- $592/mt higher than Asian ABS prices of $2,185/mt CFR China, according to Platts data. With freight rates from Asia to Turkey and North Africa hovering at around $70-150/mt, the arbitrage for Asian material to enter those markets were wide open.
From the beginning of the year, ABS natural grade prices have rallied Eur200/mt or 10.6% to Eur2,085/mt FD NWE, as raw material prices of styrene, acrylonitrile and butadiene surge in the same or higher magnitude.
Asian ABS prices have been rising for most of this year, mainly due to fast rising feedstock prices, particularly butadiene. The CFR China price of ABS rose 11% from $1,970/mt January 4 to $2,185/mt February 15, but slipped $25/mt this week to $2,160/mt Wednesday due to weak demand and lower offers.
Similarly for PS, FD NWE general purpose PS net prices had increased Eur165/mt or 13% to Eur1,445/mt from the beginning of the year while Asian prices only rose $85/mt or 6% to $1,560/mt CFR China.
ASIAN PRODUCT GAINS MARKET SHARE IN TURKEY, N AFRICA, EUROPE
Industry observers said that buyers from Turkey and North Africa were only buying Asian PS and ABS product thus far this year.
"Everyone is buying Asian material, European suppliers did not even offer to us in February knowing they cannot compete," said a distributor based in Tunisia.
As of this week, offers for GPPS from South Korea were placed at Eur1,300/mt and Eur1,500/mt for high impact polystyrene CFR North Africa basis and to Turkey, $1,750-1,770/mt and $1,900/mt CFR respectively for GPPS and HIPS.
"For the last five years, Asian product has been coming here more and more due to the favorable exchange rates," said a distributor in Turkey.
Over the last three to five years South Korean ABS has increased its market share in the Turkish market from 30% to 45-50%, a company source with a South Korean ABS producer said Wednesday. Turkish consumption of ABS is estimated at about 90,000 mt/year, or roughly 7,500 mt/month, meaning that the country likely imports around 3,500 mt/month of ABS from South Korea.
Turkey mainly imports pre-colored general purpose ABS from Korea, which is mostly used in home appliances. This type of ABS is currently offered at $2,500/mt FOB Korea, the source added.
Another source with the same company said it produces about 700-1,000 mt/month of HIPS, of which roughly 300-400 mt is shipped to African countries such as Egypt and Ghana.
Asian ABS has also been gaining increased market share in Europe, sources said.
"Typically 25-30% of Europe's consumption is met with Asian product," said a European ABS producer. "The total European market demand is around 800,000 mt/year and imports from Asia are really making a difference."
