ABS

Global ABS Market Outlook 

The global demand is expected to grow at approx. 3.2 percent CAGR through 2022–2025

The automobile electronics market, electronics sector and smart consumer and home appliances are the major growth drivers

The innovative fields of the auto electronics and 3D printing markets could be the potential platform for ABS applications

The growing disposable income of the middle-class population in Asia is expected to drive the ABS consumption in the appliance, electronic, and auto electronics industries

Demand Market Outlook

Global ABS demand is expected to remain bearish in Q4 2022 and Q1 2023, due to a variety of factors, i.e., rising inflationary pressures, the Russia–Ukraine War, year-end destocking activities, rising energy prices in Europe, the fear of a global recession, the semiconductor shortage issue, and rising inventory levels. As a result, global ABS prices are expected to fall by 10–15 percent Q-o-Q in Q4 2022 and 1–2 percent Q-o-Q in Q1 2023.

Supply Outlook:

• Global ABS market to remain oversupplied and higher inventory levels amidst bearish global demand

Demand Outlook:

• Global demand is expected to decrease in Q4 2022 amidst Russia–Ukraine war, year-end destocking activities, weak demand from the construction and automotive industries, elevated inflationary pressures, and decrease in consumer spending in Q4 2022

Price Outlook:

• Global ABS demand is expected to remain bearish in Q4 2022 and Q1 2023, due to a variety of factors, i.e., rising inflationary pressures, the Russia–Ukraine War, year-end destocking activities, rising energy prices in Europe, the fear of a global recession, the semiconductor shortage issue, and rising inventory levels. As a result, global ABS prices are expected to fall by 10–15 percent Q-o-Q in Q4 2022

Input Cost Outlook:

• Feedstock prices (styrene, acrylonitrile, and butadiene) is estimated to decrease by 13-19 percent Q-o-Q in Q4 2022 due to decrease in upstream prices, bearish global market sentiment amidst rising inflationary pressures and year-end destocking activities.

Industry Best Practice

• Fixed margin-based pricing is generally preferred by buyers who procure lesser volume. The manufacturer tries to maintain its desired profit margin, within a range of 15–20 percent. When the prices of the raw materials change, the manufacturer looks at the overall input cost incurred in manufacturing the ABS resin, and applies their margin, subject to the market condition.

• Index-based pricing: Some of the suppliers peg the price of their ABS resin to the raw material styrene prices, as it accounts for 50 percent of the cost-contribution. Any change in the styrene prices is subsequently incorporated in the ABS resin prices during the review period.

Global ABS Market Size

• The growth in appliance, auto electronics, 3D printing and electronic sectors is expected to drive the ABS market to approx. $19.3 billion by 2025

• The growing disposable income of the middle-class population in Asia is expected to drive the ABS consumption in the appliance, electronic, and auto electronics industries CAGR: 3.2 percent

• The global ABS market is expected to grow at a CAGR of 3.2 percent from 2022 to 2025, with Asia as the center of demand growth

• Opportunities in 3D printing, medical devices, auto electronics, consumer durables an appliances and electronics are a few of the potential sector that could propel the growth

Global Capacity–Demand Analysis

• Asia, being the largest demand center, is expected to drive the ABS market from appliances, auto electronics and electronic downstream sectors

• The innovative fields of the auto electronic market growing at approx. 6-7 percent 3D printing growing at 12-13 percent approx. are strong potential platform for ABS applications

Market Outlook

• ABS capacity in North America remained at 0.94 MMT as of 2021, occupying around 7 percent of the global capacity share

• Global demand is expected to grow at 3.0–3.5 percent, supported by the expected growth in automotive electronics, 3D printing and appliance markets

• ABS is also a favored resin to be used in electrical vehicles in in line with stringent environmental regulations especially in Europe

• Automobile sector: 2–3 percent growth, driven by replacement of the painted heavy parts by light-weight ABS resins in dashboards, wheel casings, etc.

• Home appliance market growth at 4–5 percent and smart consumer appliances at approx. 10 percent

• Electronic component market from wiring boards, enclosures, etc., is expected to grow by approx. 6–7 percent

• 2022: The Russia-Ukraine war, higher inflationary pressures, rising COVID-19 cases in China, higher crude oil prices, and other economic headwinds have slowed down the growth in demand for ABS at a global level.

Engagement Outlook

• Emerging Asian regions such as South Korea, Japan, Malaysia, etc., could be favored as sourcing destinations due to their healthy additions and strong supply base. To avoid future supply risk, a diversified supplier base between different countries is preferred.

ABS Global Demand by Application

• On a global scale, automotive, appliances, and electronics are the major demand drivers. Demand for automobile electronics, printed wire board, and smart consumer appliances is expected to grow at a 3.0-3.5 percent annual rate until 2025. Automobile demand witnessed a slowdown during 2020–2023 due to the pandemic, semiconductor shortages, logistics issues, the Russia–Ukraine war, and rising inflationary pressures.

• Fast-paced urbanization, rise in disposable income, transition to a consumer, and service-oriented economy would contribute to the growth in these industries

ABS Industry Drivers 

• Metal replacement in the automotive, and electrical and electronics industries are the drivers for engineered resins, such as ABS. The need for light weight and high-performance material is driving ABS demand in these sectors

• Emerging nations to drive demand: The demand for home appliances and electrical/electronic goods made of ABS is increasing in emerging nations, such as China and India, due to rising middle-class population

• Shift in manufacturing base: With the rapid development of China's Information Communications Technology (ICT) sector, China has become the world's largest manufacturing center for electronic products, including televisions, computers, handsets and DVD players. This development is driving ABS demand in the electronic segment

ABS Industry Constraints

• Substitution in 3D printing

–ABS has been a preferred choice for 3D printing so far

–PLA has taken a significant market share from ABS in 3D printing, due to properties, such as lower melting point, aroma, aesthetics, renewability, and biodegradability

–PLA is cheaper than ABS

• Increasing demand for silicone elastomers as insulation materials on the back of better conductive properties could pose a substitution threat for ABS

• Slowdown in major economies: Slowdown in China’s manufacturing activities and contraction of Brazilian economy could have a negative impact on the global demand for engineered resins

ABS Innovations

Innovations in the ABS market are driven predominantly by light weighting, cost reduction, performance, and sustainability needs.

ABS from recycled material for auto applications

• In September 2021, INEOS Styrolution introduced specialty ABS, made from post-consumer waste for applications in the automotive industry

• New grades for ABS, Novodur ECO and Novodur ECO High Heat contains 70 percent and 50 percent mechanically recycled ABS content

• Ineos claims that the newly launched specialty grades to have identical properties to virgin ABS

Laser-weldable high-heat ABS

• In May 2016, INEOS Styrolution and Japan’s Ichikoh (a manufacturer of lamps and mirrors for automobiles) jointly developed a laser weldable high heat ABS for rear lamp

• The new rear lamp housings development has enhanced optimal aesthetics, better performance, and lower costs as a result of processing innovations (a new laser welding technique developed by Ichikoh and a unique styrenic polymer solution from INEOS Styrolution)

ABS Cost Structure Analysis

• Asia does not have a cost competitive feedstock, yet the prices and margins of ABS are the lowest, given its excess capacity

• Margins for the North America and Europe ABS producers are high, due to high feedstock prices, which, in turn is driven by the regions’ structural capacity deficit

• The recent capacity additions and increase in exports from Asia could increase the level of competition in North America and European regions, which could open up a scope for price negotiation.

Why You Should Buy This Report

Find information about the ABS market outlook, ABS market data, demand analysis, ABS trend, trade dynamics, import, export, etc. of regional and global markets. Porter’s five forces analysis of North America, Europe, and Asia. Industry drivers and constraints, major events and innovations, ABS market news, ABS market share. Asset-backed securities market cost structure, price forecast. Supplier analysis with SWOT analysis of major players like LG Chem, CNPC, Formosa Chemicals, etc. Best abs finance industry practices and contract structures.