Asia - ACN may extend falls on low China AF, ABS production
Dated- 27 Apr , 2012 - Global
Acrylonitrile prices in Asia look set to fall next month as buyers from downstream acrylic fibre (AF) and acrylonitrile butadiene styrene (ABS) sectors in the key China market retreat to the sidelines because of poor market conditions, industry Sources said on Friday.
Spot prices were at $2,200-2,250/tonne (€1,672-1,710/tonne) CFR (cost and freight) northeast (NE) Asia in the week ended 20 April, down $125/tonne or 5.3% from 6 April, according to ICIS data.
AF and ABS producers in China are currently running their plants at reduced rates amid weak global market outlook, market players said.
China, the world’s second biggest economy, has cut its 2012 GDP growth target this year to 7.5%, after keeping an 8% target for seven years, as exports are taking a strong hit from the economic and financial weakness of its major trading partners in the West.
Current run rates at China’s domestic AF facilities are below 80%, while average production rates at its ABS plants are much lower at around 60%, industry Sources said.
“Chinese buying interest is very weak and there are no enquiries for product,” a seller said.
Official data from China Customs showed that China’s ACN imports in March fell 15% year on year to 47,074 tonnes.
The ongoing eurozone debt crisis, a weak US economic recovery and a slowing Chinese economy have been raising concerns about overall demand, weighing down on sentiment across all markets.
“Market sentiment is very weak and our buying indications [for ACN] have dropped below $2,000/tonne CFR Asia for May shipments as we expect the AF price to fall,” a downstream AF producer said.
AF is used in household furnishings, carpets, sweaters while ABS is used in office automation products, automotive components and household appliances.
“The gap between [ACN] buying and selling indications has widened as some sellers are holding out for at least $2,200/tonne CFR NE Asia, against buying indications at below $2,000/tonne CFR NE Asia for May shipments,” a trader said.