South Korea's Kumho Petrochemical is considering shutting its 250,000 mt/year acrylonitrile-butadiene-styrene plant at Ulsan for one or two weeks from next week due to poor demand and negative production margins, a company source said Wednesday.
The plant is now running at around 70-80% of its capacity after its restart from a week-long maintenance that started June 9. The company's official offer on a CFR China basis is $2,150/mt, but retail prices in the trading hub of Hong Kong are said to be almost $100/mt lower.
The source said that selling ABS at $2,100/mt CFR China, for example, means the company would lose around $300/mt.
ABS reached its highest price so far this year at $2,330/mt CFR China, but has since fallen 10.3% to $2,090/mt Wednesday last week. In the same period, feedstock butadiene has surged $1,020/mt, or 32%, to $4,200/mt CFR China.
ABS consists of roughly 15% butadiene, 25% acrylonitrile and 60% styrene monomer.
Based on the latest feedstock prices and an estimated conversion cost of $250/mt, the current breakeven price for ABS would be $2,345.15/mt, up $195.15/mt from Kumho's official offer.
