ABS Resins     

  *Millions of pounds per year of acrylonitrile-butadiene-styrene (ABS) resin capacity produced by continuous mass (or bulk), suspension or emulsion polymerization. ABS resins are composed of over 50 percent styrene and varying amounts of butadiene and acrylonitrile. Some production is from swing capacity, which can be used to produce either ABS or polystyrene. Almost all of the ABS produced is for the merchant market.

In 2000, Bayer closed its Muscatine, Iowa ABS facility, eliminating 160 million pounds of capacity.

Dow's plant in Torrance, Calif., with a swing capacity of 40 million pounds, has been producing polystyrene for several years because of market conditions.

Diamond Polymers is a joint venture of Mitsubishi Rayon, Network Polymers and Marubeni.

Profile last published 11/2/99; This revision, 1/13/03.

DEMAND
2000: 1.38 billion pounds; 2001: 1.27 billion pounds; 2005: 1.40 billion pounds, projected. Demand equals production plus imports (2000: 305 million pounds; 2001: 305 million pounds) less exports (2000: 295 million pounds; 2001: 225 million pounds).

GROWTH
Historical (1996 - 2001): -0.2 (negative) percent per year; future: 2.4 percent per year through 2005.

PRICE
Historical (1996 - 2001): High, $1.04 per pound, bgs., t.l., dlvd., market, high-impact injection molding grade; low, $0.69 per pound, same basis. Current $0.72 to $0.85 per pound, same basis.

USES
Because of the composition range available, ABS exhibits a wide range of properties. This flexibility of composition and structure allows the use of ABS in a variety of diverse applications: appliances, 23 percent; transportation, 21 percent; piping, 13 percent; electrical and electronic components, 11 percent; medical applications, 4 percent; and miscellaneous applications including, toys, luggage, lawn and garden products, shower stalls, furniture and ABS resin blends with other polymers, 28 percent.

STRENGTH
ABS is the largest-volume engineering thermoplastic resin. It is positioned between commodity plastics (e.g., polypropylene or polystyrene) and higher-performing engineering thermoplastics (e.g., polycarbonate or polyurethane). ABS is doing well in competition with other polymers, and the run-up in oil costs also impacts these materials as it does ABS. High-impact polystyrene has become almost as expensive as ABS, so some manufacturers of end products have changed back to ABS. The emphasis on higher-quality is enabling ABS to displace polypropylene and high-impact polystyrene in many products, and ABS is reported to be picking up business because of ecological concerns over polyvinyl chloride.

Most markets for ABS are mature, but the products continue to find new applications, spearheaded by the replacement of painted parts in end markets such as automotive parts. The industry has enjoyed a 3 to 4 percent growth for ABS in 2002. New applications in recreational vehicles, a solid automotive and appliance business, and increased activity in the building and construction segment have helped to drive this growth.

WEAKNESS
Demand in 2001 was sharply down because of the slowdown in the automotive and construction industries, two areas hit hard by the soft economy. These segments did trun around, however, in 2002. The biggest issue facing producers today is the run-up in feedstock costs led by the price of oil, as all raw materials for ABS are affected. Styrene monomer, acrylonitrile and butadiene costs are increasing, with a resulting compression of margins that are already at unsatisfactory levels.

Producers are guarded on pricing, but they implemented several price increases in 2002, the latest taking effect October 1, to keep pace with the rising raw material costs. But imports from Taiwan, Korea and Mexico have tempered domestic pricing for general-purpose and piping grades. In recent years exports have declined as new production in the Far East came on-line. The Far East represents nearly 70 percent of world ABS consumption – far larger than North America’s 15 percent share.

OUTLOOK
Fundamental demand for ABS has picked up as the economy has rebounded from its slowdown in 2001, and customers are rebuilding inventories that ran down at the end of that same year. ABS growth climbed above GDP growth in North America during 2002, turning in a 3 to 4 percent performance. However, high oil costs are crimping margins, and producers caution that they could be hurt if oil prices spike up during the coming months.

The market has evolved into general purpose ABS, for which cost and productivity are the most important factors, and higher-end, engineered products, which are generating most of the industry's growth. It is in the latter area that producers are trying to differentiate themselves and fight for market share. Growth for the forecast period is anticipated to be 2.4 percent annually.