Price trend

Recently, the domestic ABS market has remained stable with minor fluctuations, and spot prices of various brands have adjusted narrowly. According to the Commodity Market Analysis System of Business Society, as of January 12th, the average price of ABS sample products was 10662.5 yuan/ton, which is the same as the average price level at the beginning of the month.

Cause analysis

In terms of supply: In the early stage, the domestic ABS industry had a high load, and due to supply pressure, some enterprises had a reduced load. This week, the operating rate of ABS aggregation enterprises has been lowered to below 68%, resulting in stable production and a decrease in inventory due to factory destocking operations. However, the improvement of the company’s profit situation is limited, and there is still pressure on the supply side.

In terms of raw materials, the overall trend of ABS upstream three materials this week is average, with a significant decline in the acrylonitrile market. The narrow increase in raw material propylene prices has limited support for the cost of acrylonitrile. This week, the supply of acrylonitrile is relatively loose, and downstream enterprises have poor stocking enthusiasm. The weak operation may continue in the future.

The atmosphere of the domestic butadiene market has warmed up this week. Although the downstream synthetic rubber market is weak and declining, and some industries are still operating weakly, the demand news has brought a significant drag on the spot market of butadiene. However, the domestic market is strong both inside and outside the week, and domestic sources are actively engaged in export negotiations. This news has boosted the spot market in the middle and later stages of the week.

From the chart below, it can be seen that the styrene market price has slightly increased this week. Although some ports have concentrated cargo arrivals, there has been an accumulation of port inventory. But downstream demand continues to follow, while upstream crude oil has recently risen in the far end, with strong cost support and a rebound in the market.

In terms of demand: This week, the main ABS terminals, including downstream factories in the home appliance industry, have continued to have poor stocking enthusiasm. The main logic revolves around buying on dips and digesting inventory. As the holiday approaches, downstream enterprises have increased their holiday arrangements, and their procurement operations tend to be weak, with a strong demand to maintain production, making it difficult to increase demand. Mid stream traders are offering discounts and taking orders, resulting in slow spot circulation and dragging down the market.

Future Market Forecast

This week, the overall performance of ABS upstream materials was average, with limited support for the cost side of ABS. The start of petrochemical plants has been lowered to alleviate some supply pressures. The demand side consumption is poor, and merchants have weak confidence in the future market. The current market trading is light, and the pre holiday market is heavy. It is expected that the ABS market will remain weak.