ABS Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on ABS

• The global demand is expected to grow at approx. 2.8 percent CAGR till 2023

• The automobile market growing at approx. 5-6 percent, printed wire boards in the electronics sector and smart consumer appliances growing at approx. 7 percent are the ABS market growth drivers

• The innovative fields of the auto electronic market growing at approx. 12–14 percent could be the potential platform for ABS applications

• China is expected to remain as the key driver for the ABS market, in terms of both consumption and production

• The top global suppliers in the ABS financing market are Chi Mei, LG Chem, Styrolution, CNPC, and Formosa.

• ABS market outlook shows that the global capacity was 11.22 MMTin 2016, the global demand was 8.49 MMT (2016), and the global demand CAGR is 2.4 percent for 2017–2022.

• ABS market size data shows that the key demand drivers are automobiles, appliances, and electrical/electronics.

• The major challenges in the Asset Backed Securities market are substitution in 3D printing from PLA resins and an increasing demand for silicone elastomers as insulation materials.

• The major opportunities will come up from the shift in manufacturing base to demand center (Asia).

Demand Market Outlook

The automobile and appliances markets are expected to drive the demand for ABS in NA and Europe, while in Asia, the electronics segment would be the key driver, followed by appliances and automobiles segment

Industry Best Practice

• Fixed margin-based pricing is generally preferred by buyers who procure lesser volume. The manufacturer tries to maintain his 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 his 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 for the cost contribution. Any change in the styrene prices is subsequently incorporated in the ABS resin prices during the review period

Global Market Size: ABS

• The growth in the automobile, appliance, and electronic sectors is expected to drive the ABS market to approx. $23 billion by 2023

• The growing disposable income of the middle-class population in Asia is expected to drive the ABS consumption in the appliances, electronics, and automobile industries

• The global ABS market is expected to grow at a CAGR of 9 percent from 2017 to 2023, with Asia as the center of demand growth
• The trend of light-weight vehicles expected uptrend in demand in China, growing in light of the new regulations, in order to ban the import of scrap plastics, such as ABS and SAN, growth of consumer electronics are some of the potential platform for ABS growth, as 2018 progresses
• China is expected to remain as the key driver for the ABS market, in terms of consumption and production

Global Capacity–Demand Analysis

• Asia, being the largest demand center, is expected to drive the ABS market from appliance and electronic downstream sectors
• The innovative fields of the auto electronic market growing at approx. 12–14 percent could be the potential platform for ABS application

Market Outlook

• ABS capacity in North America remained at 0.94 MMT occupying around 8 percent of the global capacity share

• Demand is expected to grow at 2.8 percent until 2023, supported by the expected growth in automobile and appliance markets

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

• Automobile sector: 5 percent growth, driven by replacement of the painted heavy parts by light-weight ABS resins in dashboards, wheel casings, etc.

• Home appliance market growth: Domestic, kitchen, and home comfort appliances at 6-7 percent and smart consumer appliances at approx. 7 percent 

• Electronic component market w.r.t. wiring boards, enclosures, etc., is expected to grow by approx. 8-9 percent

• Capacity additions are expected to come up more in Asia (from Trinseo and CNOOC & LG Petrochemical), Versalis is expected to increase their capacity in Italy by 75,000 tonnes

Engagement Outlook

• Emerging Asian regions could be considered as favorable destinations of sourcing, due to the upcoming capacity additions and strong supply base. However, 2018 -2019 had led to lower demand for China-made electronics due to the ongoing US-China trade war

ABS Global Demand by Application

On a global scale, automotive, appliance, and electronic are the major demand drivers

Demand is expected to grow at 2.8 percent until 2023, from strong support from automobile, printed wire board, and smart consumer appliances

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

ABS Market Overview

• As Q4 2019 settles, stable and sufficient supply levels, softer demand sentiments, and lower feedstock prices are to support a decrease in ABS finance prices.
• Buying momentum may remain cautious and volatile, as the market is waiting to hear the recent trade deal between the US and China.
• Presence of ample supplies both domestically and from imports, high inventories, and poor demand drive, along with lower feedstock styrene prices, may support a decline in ABS financing prices. Concerns of supply issues from ACN may curb a strong decrease
• Increasing trade tensions between the US and China and possibility of a trade demand between the two nations could continue the cautiousness in buying asset backed securities volume.

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 lightweight 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

Natural fiber-reinforced ABS

Sustainability through Natural Fiber Reinforced ABS

• In Nov 2015, Elix Polymers introduced Elix ECO ABS-NF, a natural fibre reinforced ABS composite material for injection moulding applications and specific extrusion process 

• The product can be processed without the need to modify machines. The key features are high stiffness, heat resistance, low molding shrinkage ratios, low emissions, and lower weight compared to glass fibre reinforced ABS

• Elix has received EEA and Norway Grants, the first time, a European ABS market producer is given a grant to investigate new sustainable ABS materials and composites

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 Challenges And Opportunities

Challenges: Substitution in 3D printing from PLA resins, increasing the demand for silicone elastomers as insulation materials. 

Opportunities: Shift in manufacturing base to demand center (Asia)

Why You Should Buy This Report

Information about the ABS market outlook, ABS market data, demand analysis, trade dynamics, import, export, etc. of regional and global markets. Porter’s five force 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.