Realignment of grades in PIE's price reports / Extrusion and injection moulding materials now separate / Producers from Asia targeting Europe more strongly / Surplus puts pressure on European producers' margins
“Times are changing; we are changing with them” is the translation of a Latin phrase of Ovid. To take account of such changes, Plasteurope.com regularly updates the composition of its polymer price reports. Having revised the structure of EPS (see Plasteurope.com of 05.02.2019), HDPE pipe and PVC (see Plasteurope.com of 30.11.2012), Plasteurope.com has now restructured the ABS grades for price reporting, as a result of enquiries received from the market.

The former nomenclatures – “ABS natural”, “ABS white/black” and “ABS coloured” no longer adequately reflect the conditions on the market. For example, the term “coloured” is outdated because the differences here are too large and several producers now market these types more as specialities. On the other hand, the previous ABS natural grade is too vague because the prices of the injection moulding and extrusion types covered here often show different movements. For this reason, Plasteurope.com is dividing the previous ABS natural grade into “ABS injection moulding” and “ABS extrusion”, while the previous “ABS white/black” and “ABS coloured” grades are combined under “ABS coloured”.

The new price ranges for ABS are based on the old Plasteurope.com ranges, even though they are above the current market notations. The new price for ABS extrusion is oriented to the upper end of the present Plasteurope.com range for ABS natural, and the new price for ABS injection moulding grades is oriented to the lower end. The range for the new type, ABS coloured, is oriented to the upper end of ABS white/black and the lower end of ABS coloured. Plasteurope.com has opted for this procedure in order to minimise the effects on subscribers’ customer relations, which take into account the Plasteurope.com reports in price negotiations. In order to ease the effect of the transition, Plasteurope.com will continue the present price reports for ABS natural, ABS white/black and ABS coloured for a further six months (up until the report for June 2020), in parallel with the new notations.

Generally, most ABS prices have been under pressure since autumn 2018. During the course of 2019, the price difference between extrusion grades and injection moulding grades also dwindled. Whereas, at the beginning of 2019, because of the higher production costs of the mass polymerisation process, the difference was around EUR 60-80/t, it has since fallen to EUR 30-35/t. This was down to special offers of ABS materials from the mass polymerisation process, which producers increasingly offered for sale due to a supply surplus – as well as in the injection moulding segment, where prices were somewhat lower. In the price downturn to date, producers have been forced to give up some of the margin gains they had previously won in the preceding upward phase. “Two years ago, even a cat was able to sell ABS,” one market player told PIE. At the end of 2019, business became much more difficult.

The existing product surplus – and, in the slipstream of this, the fall in prices – is primarily the result of weaker demand through the economic slowdown since Q3 2018, to which the trade conflicts and automotive crisis have made a considerable contribution. This economic depression has since impacted other key ABS customer segments such as household appliances, E&E and consumer goods. Market experts assume that total European ABS demand declined in 2019 by around 4-6% and has thus fallen back to the level of 2017. The European market – without Turkey and Russia – is expected to have a volume of around 850,000 t/y.

According to PIE’s Polyglobe database (www.polyglobe.net), total European capacities are presently about 900,000 t/y. Europe has a minor share of the total global capacity of more than 10m t/y, of which the lion’s share of over 8m t/y is located in Asia. Since the European producers Ineos Styrolution (with plants in Dormagen and Ludwigshafen in Germany and Antwerp / Belgium), Trinseo (Terneuzen / The Netherlands), Elix Polymers (Tarragona / Spain) and Versalis (Mantua / Italy) are unable to fully utilise their capacities due to maintenance turnarounds and production cutbacks – and they also export part of their production – the European market is dependent on imports. The share of imports in recent years has been around 30%, with the main suppliers being South Korea and Taiwan. These include producers such as Lotte, LG, Kumho, Chi Mei and Formosa.
Increased quantities from Asia
Imports are another important reason for the current surplus of ABS in Europe, because China – the biggest customer market for material from South Korea and Taiwan – is in the process of building significant capacities of its own. Just recently, Ineos Styrolution also announced the construction of a world-scale plant in China (see Plasteurope.com of 14.01.2020). Although China needs the majority of these new capacities to meet its own rapidly growing demand, the country will also need far fewer imports when construction of the new production facilities is complete. Producers from South Korea and Taiwan will therefore have to search for alternative sales opportunities and will logically have their eyes on Europe.

At last year’s “K” trade fair in Düsseldorf / Germany, Asian producers made no secret of intentions to expand their market in Europe. As part of this campaign, they often cut prices radically. As a result, South Korean producers, in particular, last year registered a smaller decline in sales in the EU-28 countries than the market as a whole.

Supply in Europe is also being boosted by European producers’ new capacities. Ineos Styrolution, for example, is currently in the process of switching a polystyrene line at its site in Wingles / France to ABS (see Plasteurope.com of 26.06.2018). Through this measure, which is due to be completed in the first half of 2020, the company will then produce ABS by the mass polymerisation process, previously a domain of Trinseo and Versalis. The Eni subsidiary Versalis is also working on expanding its ABS supply. According to reports, it will combine the advantages of the mass polymerisation process and the emulsion process and, connected with this, also expand its capacity. Both projects together should increase ABS capacities in Europe before the end of 2020 by around 80,000 t/y.
Abundant supply likely to continue
The increasing supply from imports and the additional capacities in Europe will make it difficult to eliminate the current surplus. Even if the plastics industry is seeing initial signs of a tentative revival (for Germany, see Plasteurope.com of 31.01.2020), it is unlikely that there will be any leap in demand for ABS. ABS availability will then continue to be good, which will naturally make it difficult for producers to restore their margins for some time to come.

PIE ABS Price Report Categories from Januar 2020
NameDescriptionTypical ApplicationsReference December 2019
ABS extrusion naturalbatch processpanels, profiles and edge banding (furniture, luggage)2,055 - 2,235 EUR/t
ABS injection moulding naturalemulsion processautomotive (panelling, radiator grills, instrument panels), household appliances (casing, vacuum cleaner parts), consumer goods and toys2,015 - 2,205 EUR/t
ABS colouredwhite/black, coloured, high heatautomotive, household appliances, E&E2,590 - 2,800 EUR/t
05.02.2020 Plasteurope.com [244413-0]
Published on 05.02.2020
ABS: Neuordnung der Typen in den KI-PreisberichtenGerman version of this article...

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