In China, both import and local ABS markets have hit the lowest levels since the beginning of 2012, when ChemOrbis China ABS Price Index was first launched. New prices emerged with fresh declines for December driven by lower production costs in Asia with respect to a month ago. Players also blamed muted demand heading to the year-end amidst a slower economy in China as another reason behind the renewed price drops for ABS.

“Converters are not purchasing beyond their immediate needs given the volatile upstream chain which keeps overall demand slack. Supply, meanwhile, is regular. We believe that activity will not show any improvement in the near term unless crude oil prices witness a notable increase. We are currently operating our plant at 80-90% of capacity”, commented a source from a producer.

Another ABS maker was said to have reduced their operating rates for the first time in years in order to keep their offers stable for December. They are running their 830,000 tons/year plant at 85% from the previous 100% nowadays.

“The local market is performing weakly. Most players are still waiting to hear new offers from producers and are not in a hurry to replenish their inventories yet”, commented a Shanghai based trader on the local ABS market.

Meanwhile, media reports showed that total domestic production of household air-conditioning units declined 27% on the year in October while domestic sales were also down 31.3% from a year earlier, suggesting weakness in a major ABS application.

“ABS and HIPS prices are almost on par recently although ABS should traditionally carry a premium of up to 200 dollars/ton over HIPS. ABS makers will try to recover their margins at some point”, argued this week an agent of a South Korean ABS maker in turkey. New December offers were announced with drops of up to 30 dollars/ton to this country.