According to the monitoring of the Commodity Market Analysis System of Shengyi Society, the domestic ABS market experienced a strong upward trend in March. According to the Commodity Market Analysis System of Shengyi Society, as of March 31st, the average price of ABS sample products was 12766.67 yuan/ton, with a price level increase of 43.02% compared to the beginning of the month. The spot prices of most grades have increased significantly.
Supply: Stable after load increase, supply shifts from tight balance to abundant
The operating rate of the domestic ABS industry showed a trend of first increasing and then decreasing in March. By the end of the month, the overall operating rate of the industry remained at around 69%, with an average weekly output of about 135000 tons and a finished product inventory of about 180000 tons. In the short term, production fluctuations are limited, and market supply is transitioning from tight balance to ample supply, with relatively moderate support from the supply side for prices.
Cost: Upstream three materials all rise, raw material support continues to increase
The cost side became the core driving force behind the rise of ABS in March. International oil prices continue to rise due to the volatile situation in the Middle East and the firm stance of OPEC+on production cuts, providing cost support for petrochemical products.
Acrylonitrile: Port arrivals have decreased within the month, domestic spot inventory has been smoothly cleared, and there have even been export windows in some areas. Supplier quotations have remained firm and upward, with significant market growth.
Butadiene: Prices are rising in a stepwise manner. Supported by tight import supply and stable downstream demand, merchants have a strong willingness to raise prices. However, downstream butadiene rubber enterprises are facing cost pressure, and some units are reducing their load, which may constrain the subsequent increase in butadiene prices.
Styrene: The market first rose and then consolidated. The raw material pure benzene fluctuates widely with crude oil, and although downstream growth is weak, the expected negative load reduction of foreign facilities in the second half of the month will provide support for pure benzene. Currently, the cost of styrene is high, downstream production has decreased month on month, and demand growth is limited. It is expected to maintain a high level of operation in the short term.
Requirement: Insufficient terminal follow-up, market trading returns to rationality
The downstream ABS enterprises did not start production as expected in March, and the consumption performance of the main terminal electrical shell industry was flat, with limited improvement in corporate profits. With the rapid rise in prices, the market’s pursuit of price increases has gradually cooled down, and there has been a reduction in replenishment and warehouse building operations. As the end of the month approaches, some merchants are offering discounts to fulfill their tasks, causing a certain drag on the price center of gravity. At present, the inventory level of ABS finished products is moderate, but downstream resistance to high priced goods is gradually emerging, and the overall support of the demand side for the market is weak.
Market outlook: Strong cost and weak demand game, short-term gains may be limited
The current ABS market is still in a game stage of strong cost driven and weak demand reality. The supply side has limited changes, and the market supply is relatively abundant; The prices of upstream three materials remain high, and cost support remains solid. However, spot prices have reached a temporary high, and downstream capacity is average. Trading is gradually returning to the dominance of supply and demand fundamentals.
Technical analysis
Analysts believe that according to the Business Society Spot News, the current ABS 10 day moving average crosses the 20 day moving average, and all recent moving averages are higher than the distant moving averages, indicating that spot prices are likely to continue a positive trend in the short term. However, auxiliary indicators show that ABS prices in all five levels are at high or medium high levels, indicating that the future increase in ABS prices may be limited. It is recommended to closely monitor the international crude oil and Middle East shipping situation.
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