24 Aug 2017
China Sourcing Update: Raw Material Prices Hard Goods (Jul 2017)
1. Price index of ABS resin rises further in July
The price index of ABS resin went up by 1.8% mom in July, recording month-on-month gain for two consecutive months (see exhibit 1).
In our view, the main reasons for the increase in the prices of ABS resin in the month were a stronger demand for ABS resin from manufacturers of home appliances, one of the major downstream markets of ABS resin; and a tightened supply of ABS resin. Besides, China’s proposed ban on imported waste plastics by year-end2 also pushed up the prices of ABS resin in late July as some of the demand for plastic materials is expected to shift to locally-produced ABS resin.
Going forward, the downstream demand for ABS resin from manufacturers of home appliances is likely to remain strong with the approach of the high season for ABS resin consumption in September and October. Thus, we expect that the prices of ABS resin will continue to rise in the coming months.
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