ABS CAPACITY INCREASES PENDING IN ASIA

Comments Email Print

SINGAPORE — ABS prices in Asia are beginning to recover from a long slump, and suppliers plan to add significant capacity to serve the growing market.

In Asia, ABS is by far the most frequently used engineering thermoplastic, making up 45 percent of all engineering polymers processed. While demand for all engineering thermoplastics is expected to rise 8-10 percent per year, ABS demand is rising at a steady 10 percent rate.

Several suppliers have announced new capacity in Asia since the first of the year. In China, BP Chemicals Ltd. of London and Shanghai Gao-Qiao Petrochemical Corp. of Shanghai, China, will include an ABS production plant in their plans for a new petrochemical complex.

In addition, Toray Industries Ltd.'s Malaysian subsidiary plans to add another 88 million pounds of capacity to bring its total capacity in Malaysia to 350 million pounds per year. Toray eventually plans to increase that capacity to 440 million pounds by streamlining its plant.

Recently, Bayer AG of Leverkusen, Germany, purchased 51 percent of the Indian firm ABS Industries, which now is increasing its capacity to 88 million pounds per year.

According to Kelvin Fahey, managing director of SIRA International Corp. Pty. Ltd. Australia of Canberra, Australia, ABS accounts for more than half of engineering polymers processed in China and Taiwan.

``Much of this is utilized in sheet extrusion as well as injection molding,'' he said.

Fahey presented a paper at the recent Engineering Thermoplastics Markets '97 Conference in Singapore.

``Electrical appliance and electronic applications are the largest single market application for engineering thermoplastics in Asia,'' he said. ``More than 1.1 million tons of engineering polymers were processed during 1995, most of this as components that were assembled within the region for local and export markets.''

Fahey said 43 percent of ABS sold is used in the electrical sector. The next-largest use is in the growing Asian automotive segment, which now accounts for 11 percent of the total ABS market in Asia. Other applications include housewares, sheet and film, toys and medical.

Asia has many modern, world-scale production sites, and Taipei, Taiwan-based Chi Mei Trading Co. Ltd. is the world's largest producer of ABS. Currently the company has the capacity to produce 1.76 billion pounds per year, and although Chi Mei has not announced its intentions yet, observers expect it to expand that total to about 2.2 billion pounds in the next few years.

Total production in Taiwan, even with Chi Mei's capacity, equals less than two-thirds that of Japan.

In contrast to the normally stable pricing enjoyed by the North American market, Asia's ABS pricing has a tendency to swing violently with demand and feedstock pricing.

According to Paul Bernard, a chemical analyst for Goldman Sachs in Hong Kong, prices recently have fallen in Asia to historically low levels, as low as 38 cents per pound in Hong Kong. Prices since have rebounded to about 45 cents per pound.

ABS capacity in the Association of South East Asian Nations started coming on strong in the early 1990s and accelerated exponentially starting in 1993 to reach today's total capacity of 550 million pounds per year. If all plants currently under construction begin operating as scheduled, by 2000, ASEAN capacity should hit 660 million pounds per year.