In mid August, the domestic ABS market showed weak consolidation, with most spot prices of various grades stabilizing slightly. According to the Commodity Market Analysis System of Shengyi Society, as of August 21st, the average price of ABS sample products was 12050 yuan/ton, an increase or decrease of+0.42% compared to the price level on August 1st.
Fundamental analysis
Supply level: In mid August, the load of the domestic ABS industry increased slightly by 1.3% compared to the previous period, with an overall operating rate of around 67%. Previously, due to the decline in raw material prices, the profitability of the polymerization plant has slightly improved, and some enterprises have carried out operations to increase their load. During the interval, the load of Yihua Yilijin increased, while the load of Tianjin Dagu decreased and then rebounded. The total production during the ten day period increased slightly compared to the previous period. At the same time, the overall shipment situation of manufacturers is average, and inventory continues to accumulate. Overall, the current supply side has moderate support for ABS spot prices, and companies such as Jilin Petrochemical have plans to shut down in the future. In the short term, supply pressure may show narrow fluctuations and a generally stable pattern.
Cost factor: In mid August, the overall trend of ABS upstream materials was weak, which weakened the support for ABS cost side. The domestic acrylonitrile market price has been continuously declining for over three months, and there is still no clear sign of bottoming out. Supply exceeding demand is the fundamental factor leading to the decline in acrylonitrile prices. Due to the considerable profits from the co production of MMA products by some major acrylonitrile factories, it supports the maintenance of acrylonitrile plant production. The market supply side maintains a favorable performance, coupled with the sluggish upstream propylene market, many industry players are bearish on the future.
In mid August, the butadiene market experienced narrow fluctuations, and some companies in Shandong suspended their export plans within ten days, leading to a slight rebound in market offers in East China. However, some shipping schedules from East China will arrive at the port in the future, which may increase the pressure on supply. The enthusiasm for downstream procurement is significantly weak, and synthetic rubber enterprises have been affected by the decline in profits and have always maintained the need to replenish inventory. At present, the supply and demand of the butadiene market are both weak, and it is expected to maintain a stable to weak trend in the short term.
The trend of styrene market consolidation in mid August. The price of pure benzene has fallen narrowly, with poor cost support. On the supply side, port inventory has increased, and downstream spot demand is in urgent need of goods, resulting in a general balance between supply and demand. However, there were many maintenance works on the styrene plant in the early stage, and there may be expectations of increased supply in the future resumption of work. It is expected that the styrene market will continue to operate steadily, and it is recommended to pay attention to the future supply situation.
In terms of demand: Since August, there has been no improvement in the main terminal demand for ABS. In the middle of the month, some home appliance manufacturers still maintain high temperature holidays, and the overall load position of downstream factories is relatively low. The recovery of terminal demand is slow, and the stocking operation is mainly based on weak demand. Traders follow the market and the flow of goods is relatively slow. Overall, the demand side is not providing strong support to the market.
Future forecast
The domestic ABS price trend in mid August is expected to remain stable and weaken. Upstream material sorting is the main focus, with average cost support for ABS. The load of ABS polymerization plants in the interval remains stable with a slight increase, and the weak and rigid demand situation on the demand side continues. The market has not yet deviated from the off-season trend. The social inventory is rising, and the supply-demand contradiction has not eased. Overall, it is expected that the ABS market will maintain a weak consolidation trend in the short term.
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