Market and product

The styrene-acrylonitrile (SAN) market in China remained quiet as buyers were on the sidelines ahead of the renewed US-China trade talks, with top-level officials from both countries to convene in Shanghai from 30 July.

Manufacturing for export activities remained below expectations as the US and China head for trade talks next week, in a bid to find a solution to the impasse. Chinese vice premier Liu He will be meeting US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin.

Manufacturing activities for export usually peak in the third quarter as finished products are then shipped to destination countries for the year-end holidays.

Resin traders in China anticipate the malaise in the SAN sector to persist for the third quarter as there remained limited solutions to the trade war so far.

“Uncertainty because of the ongoing trade war will remain high which is impacting SAN demand,” said a trader in China.

Spot prices of the resins have mostly hovered in the low $1,400s/tonne CFR (cost & freight) China in July, ICIS data showed.

Meanwhile, the margins of SAN producers have improved in recent weeks as feedstock acrylonitrile (ACN) prices have declined significantly.

ACN prices fell from more than $2,000/tonne CFR NE Asia in May to around $1,500/tonne CFR NE Asia in July.

Key feedstock styrene monomer (SM) values have remained under $1,100/tonne CFR China.

Consequently, some buyers were looking for lower reins prices and were not keen to pick up large parcels.

However, suppliers appeared not in a hurry to reduce prices but rather to maintain a workable level of profits.

“Demand for SAN is relatively better compared to other resins like ABS,” said a producer in Taiwan. - Source: ICIS -