Price trend
In the first half of May, the domestic ABS market was weak, and spot prices gradually declined. According to the Commodity Market Analysis System of Business Society, as of May 15th, the average price of ABS sample products was 11125 yuan/ton, a decrease of -1.98% compared to the average price level at the beginning of the month.
Cause analysis
In terms of supply: Recently, the high load situation in the ABS industry has continued, with enterprises resuming work and maintenance, and the overall load is showing an increasing pattern. In the middle of the month, China’s ABS operating rate is close to 90%, and recently, the overall narrow adjustment has been around 88%. The on-site spot supply continues to be abundant, competition intensifies, and supply side pressure is high. The inventory of domestic enterprises has increased, while the mid stream inventory has remained stagnant at a high level. Merchants are under pressure, and their prices have declined.
In terms of raw materials: Recently, the overall performance of ABS upstream three materials has increased and decreased. The raw material acrylonitrile market has slightly increased. Since May, the domestic operating rate of acrylonitrile has remained around 6.5%, and the supply pressure has slightly eased. Although the demand side still has strong demand support, it has weakened compared to the previous period, coupled with a downward trend in the cost side, and it is expected that the acrylonitrile market will fluctuate slightly in the short term.
Recently, the domestic butadiene market price has fallen. Affected by external market prices and low prices from mainstream domestic suppliers, with Sinopec’s supply prices dropping twice and some merchants still showing a bearish mentality, the butadiene market has significantly declined. Currently, there are many devices that have been shut down, and production is expected to continue to decline, with strong market supply support. However, in the short term, downstream demand continues to be weak, and it is expected that the domestic butadiene market will mainly fluctuate and consolidate.
From the figure below, it can be seen that according to the analysis system of the commodity market of the Business Society, the styrene market has declined in the past half month. The international oil price has fallen, and cost support is poor. Recently, there have been equipment maintenance and restart for styrene, and new equipment has entered the production stage. It is expected that the short-term volatility in the styrene market will be mainly lower.
In terms of demand: Downstream factories working in May, including the main terminal appliance industry, have average enthusiasm for stocking up. The manufacturer’s mentality is cautious and wait-and-see, and overall demand improvement is limited. The actual trading volume on the market is weak, and the smoothness of goods delivery is poor.
Future Market Forecast
Recently, the upstream three materials of ABS have seen a decline and a decrease, which has resulted in insufficient support for the cost side of ABS. Nearly 90% of petrochemical plants have started construction, and the market supply continues to be abundant. Poor demand side support, overall maintaining a weak and rigid demand pattern. The stacked inventory position has increased, leading to a softening of merchants’ mentality and a bias towards giving up profits and taking orders. It is expected that in the short term, the ABS market may continue to be weak due to the impact of supply and demand contradictions.
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