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Wednesday, July 6, 2022

European acrylonitrile butadiene styrene producers concerned over growing Asia-Europe arbitrage

London — European producers of acrylonitrile butadiene styrene (ABS) are getting increasingly concerned about the potential impact of the growing arbitrage from Asia to Europe.

The spread between the European and Asian prices has been on a rise over the past month and half, and is expected to incentivize a new wave of imports into Europe, which could make domestic producers face a choice between margins and market share.

“Asian prices are sliding indeed and are a concern for the expectation of increasing imports in the next weeks/months,” a producer source said.

The spot price in Europe was last assessed at Eur1,830/mt FD NWE ($2,131/mt), while the CFR China spot price was assessed at $1,900/mt.

The spread has thus increased more than six-fold from $36/mt at the end of May to $231/mt this week. Last time the spread was at this level or higher was at the end of March.

Platts does not assess freight rates for polymers from Asia to Europe, but usually shipping ABS along this route would cost in the region of $100/mt.

There has been steady flow of ABS into Europe over the first five months of the year, according to the latest data published by Eurostat this week.

ABS imports in May totalled 20,784 mt, up 10% on the year but down a quarter from April. Most of the imports originated in Far East Asia, with South Korea accounting for 74%.

–Maria Tsay, [email protected]

–Edited by Jeremy Lovell, [email protected]

Source: S&P Global Platts

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