At the end of November, the domestic ABS market was weak and continued to trend, with some spot prices of certain grades lowered. According to the Commodity Market Analysis System of Shengyi Society, as of November 24th, the average price of ABS sample products was 8620.00 yuan/ton, with a price level increase or decrease of 5.74% compared to early November.
Fundamental analysis
Supply level: Since November, the operating rate of the domestic ABS industry has fluctuated, with large stability and small fluctuations. In the early stage, the load in Shandong region increased, and the maintenance scale at the end of the month was relatively small. The overall operating level of the industry remained stable at 72%, with an average weekly output of over 145000 tons. The on-site supply remains abundant, and the inventory position of the aggregation enterprise is close to 260000 tons, holding firm at a high level. Overall, the long-term loose supply pattern in the ABS market remains unchanged, and the supply side’s support for ABS spot prices continues to be weak.
Cost factor: At the end of November, the overall ABS upstream three material market remained stagnant, which had a weak impact on boosting ABS costs. Among them, the fundamentals of the acrylonitrile cycle have not shown significant improvement, the market range is fluctuating, and the main contract factories have no pressure on inventory and prices continue to rise. At the same time, there is unplanned demand in the Shandong market in the short term, which supports the mentality of industry players. However, the overall supply is still loose, and the short-term market consolidation is the main trend.
At the end of November, the domestic butadiene market first rose and then fell, with an overall increase. The follow-up situation of downstream factories within the range is still acceptable, and the digestion of local sources of goods has pushed up spot prices. However, overall supply remains loose. With the increase in prices, downstream market enthusiasm has significantly weakened, and coupled with the recent weak trend of the synthetic rubber market, butadiene prices have experienced stagnation and decline.
Recently, the styrene market has been mainly volatile. The domestic price of raw material pure benzene was driven by the rise in external market, and the fundamentals remained weak. After a brief rise, it fell back, which limited the support for styrene. On the other hand, Sinochem Quanzhou stopped for maintenance ahead of schedule within the area, resulting in unplanned reductions on the supply side. The overseas demand on the demand side has slightly boosted, but the sustainability is limited. Domestic demand is in the off-season, and downstream production remains flat. Overall, it is expected that the styrene market will experience fluctuations and consolidation in the short term.
On the demand side: There is no significant increase in downstream demand for ABS, and factory loads are average. The overall stocking logic of terminal enterprises still maintains the urgent need for replenishment, and the flow rate of goods supply is slow. The inventory position of merchants is also at a high level of stalemate, and under the increasing pressure of de stocking in the field, enterprises and merchants continue to offer discounts and take orders. On a macro level, due to the weakened profitability of terminal enterprises and external market turbulence, the consumption of the main downstream electrical appliance shell industry has been hindered, and there has been no increase in future production. The Mid month E-commerce Shopping Festival has limited impact on industry consumption, and the cautious atmosphere in both domestic and foreign markets has resulted in poor industry momentum. Overall, there has been no improvement in the demand side’s support for the ABS market.
Market outlook
At the end of November, the domestic ABS market continued to decline. The production load of the aggregation plant remains stable with small fluctuations, while consumer demand remains low and flat. Business analysts believe that the long-term supply-demand imbalance of ABS has plagued the market, dragging down spot prices. At the same time, the upstream three material market is deadlocked, and the mentality of industry players is often negative. In the short term, there is a lack of positive guidance, and it is expected that downward pressure on ABS will still exist.
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