In mid July, the overall consolidation of the domestic ABS market was weak, with some grades experiencing a decline in spot prices. According to the Commodity Market Analysis System of Shengyi Society, as of July 14th, the average price of ABS sample products was 10612.50 yuan/ton, with a price level increase or decrease of -1.39% compared to early July.
Fundamental analysis
Supply level: Since the beginning of July, the load of the domestic ABS industry has remained stable with small fluctuations, and the overall load level has been adjusted from 66% at the end of last month to around 65%. The weekly average production has stabilized at over 120000 tons, and the inventory position of aggregation enterprises remains stable at over 200000 tons. The on-site supply remains abundant. Overall, the long-term loose supply pattern in the ABS market remains unchanged. However, the industry inventory is relatively controllable, and no qualified products have been produced for the new equipment of Jinfa. The impact of the supply side on the spot price of ABS has decreased compared to expectations.
Cost factor: In mid July, the upstream three materials market of ABS showed mixed ups and downs, which limited the support for ABS cost side. In terms of acrylonitrile, the supply within the range has significantly increased. The inventory of domestic acrylonitrile factories has risen to over 40000 tons, and the expected supply growth continues to affect market sentiment. Downstream on-demand procurement, limited overall demand increase, and price stalemate after falling.
For the past half month, the domestic butadiene market has experienced a decline followed by an increase. Although the supply side was relatively loose at the beginning of the month, and the overall demand for downstream synthetic rubber market was weak and rigid, the entry of low-level replenishment orders in the past week has added bottoming power to spot prices. The market momentum has heated up, and it is expected that the increase in the butadiene market will be limited.
In the past half month, the market for styrene has shown a sideways trend after a decline. At the beginning of the month, the raw material pure benzene continued to accumulate at ports in East China, and the atmosphere in Shandong’s refining industry was light. In the past week, there has been a surge in buying volume in the far months, which has stopped the decline and rebounded, benefiting styrene. The overall operating rate of downstream three S is average, and there is a strong demand for procurement. The load of the styrene industry in the interval is relatively stable, and it is expected that there may be upward potential in the short term.
On the demand side: In the medium to long term, the downstream factories of ABS have had average loads. The current market has entered the traditional off-season, and terminal enterprises maintain a strong demand for supplementary orders. In the past half month, the market concerns caused by the deterioration of geopolitics in the Middle East have been basically digested. Industry players are worried that the possible tariff policies in the future of the United States may slow down market demand, and a cautious atmosphere prevails in the market, with slow flow of goods. Domestic inventory levels remain high and sideways, with continued loose supply and ample room for on-site turnover. Overall, there has been no improvement in the demand side’s support for the ABS market.
Future forecast
The domestic ABS market was weak and consolidated in the first half of July. The overall price of upstream three materials is weak, and the production load of ABS polymerization plant is stable with small fluctuations, while the demand side is at a low season level. Business analysts believe that in the past half month, ABS has been affected by the release of new production capacity, fluctuations in crude oil, and the traditional off-season, making it difficult for the market momentum to improve. The industry’s strong supply and weak demand pattern will drag down spot prices in the long term, and it is expected that the ABS market will maintain a consolidation and weak pattern in the short term.
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