Recently, the domestic ABS market has stopped falling and rebounded, with some spot prices of certain grades rising. According to the Commodity Market Analysis System of Shengyi Society, as of July 23, the average price of ABS sample products was 12000 yuan/ton, an increase or decrease of 1.48% compared to the price level on July 1.
Fundamental analysis
Supply level: At the beginning of this month, the domestic ABS industry’s load was roughly 70% of the operating level at the end of last month. Recently, companies such as North Huajin and LG Yongxing have undergone varying degrees of maintenance and load reduction, resulting in an overall operating rate of around 63%. Manufacturers tend to have confidence in their operations, and product pricing has generally increased slightly. Under the cover of the aggregation plant, merchants have slightly increased their shipments. The overall inventory of the industry has been digested, and the benefits of supply contraction have been realized. Overall, the supply side has increased its support for ABS spot prices.
Cost factor: Recently, the trend of the upstream three materials of ABS has been weak, providing average support for the cost side of ABS. Among them, the capacity expansion of acrylonitrile in the second half of the year is significant, and the increase in supply has enveloped the market. The expected trend of acrylonitrile prices is bearish and the profitability of enterprises is not optimistic. After the domestic market fell, it remained stagnant, and the upstream raw material propylene market fluctuated and consolidated, with average cost support. Downstream demand continues to be weak, and many industry players maintain a cautious attitude towards the future market, mainly based on their previous offers.
Recently, the domestic butadiene market has been stable but weak, and the overall market momentum is not high. Downstream demand maintains a weak demand for essential goods, leading to a decrease in market entry enthusiasm. The market lacks actual transaction support, and offers are dragged down. It is expected that the butadiene market will maintain a weak and stable trend in the short term, and there may still be a slight downward trend.
Recently, the styrene market has continued to be weak, with prices experiencing a slight decline. International oil prices have fluctuated and the pure benzene market has dropped significantly, with poor cost support. In the early stage, the price of styrene rose to a relatively high level, and buyers’ resistance to high-end sources increased, resulting in a decrease in market trading volume. It is expected that the future market situation of styrene may be weak and difficult to change.
In terms of demand: As we enter late July, there has been no improvement in the main terminal demand for ABS. Some home appliance manufacturers are maintaining holiday shutdowns, and the overall load position of downstream factories is low, with weak stocking operations and a focus on basic needs. Some traders sell at high prices, but the overall market momentum tends to be light, and the speed of source circulation is average. Overall, the demand side is not providing strong support to the market.
Future forecast
Recently, the price of ABS in China has been rising and then trending sideways. The overall stalemate of the upstream three materials is weak, and the cost support for ABS is average. The production of ABS polymerization plants has been reduced in the early stage, and the favorable effect of supply contraction has been realized. However, in terms of overall production capacity loss, changes in supply pressure may be limited, and there is still ample supply of goods on site. The demand side has weak demand, and the market situation is obvious during the off-season, resulting in weak trading. Overall, it is expected that the ABS market will remain stable in the short term.
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