Recently, the domestic ABS market has been weak and difficult to change, with spot prices of various grades continuing to decline. According to the Commodity Market Analysis System of Shengyi Society, as of September 24th, the average price of ABS sample products was 11500 yuan/ton, a decrease of -1.81% compared to the price level on September 1st.
Fundamental analysis
Supply level: Recently, the load level of the domestic ABS industry has been average. In the early stage, some maintenance capacity resumed work, and the industry’s operating rate has rebounded to around 65%. Recently, it has remained stable in a sideways trend. The overall digestion of on-site goods is slow, while the supply is abundant and the overall inventory is high. Partial stocking demand before National Day has been released, and ABS finished product inventory has decreased by about 10000 tons to about 180000 tons compared to the previous period. Overall, the current supply side has moderate support for ABS spot prices.
Cost factor: As the end of the month approaches, the trend of ABS upstream materials is generally stagnant, and the support effect on ABS cost side is average. The spot trading of acrylonitrile market has slightly improved, and the market price has stopped falling and stabilized. In the latter half of the year, the inventory of acrylonitrile factories continues to decline, and there are maintenance plans for both the north and south units next month. Supply is expected to continue to decrease, giving the market some confidence. But continuing to rise is still not enough, it is recommended to pay attention to the positive news on the ground.
Recently, the butadiene market has been consolidating at a high level. During the Mid Autumn Festival holiday, there was a release of downstream stocking demand before the holiday. Affected by the rise in the synthetic rubber market after the holiday, the mentality of the spot market has improved, and holders have a strong willingness to support prices, leading to an upward trend in mainstream domestic prices. As the National Day holiday approaches, there is a demand for replenishing inventory downstream, and the mentality of the spot market is generally strong. Overall, there are still positive developments in the butadiene market, and it is expected that the short-term trend will be mainly stable, moderate, and strong.
Recently, the styrene market has been fluctuating. Although crude oil has rebounded slightly in recent days, significant fluctuations in the previous market have dragged down the weakness of pure benzene prices, while the cost support of styrene remains at a general level. The supply is relatively abundant, and there is an expectation for short-term memory growth. Domestic demand is relatively stable, and the situation of new orders is average. There is a struggle between long and short positions in the market, and there is limited change in the supply and demand of styrene spot before and after the Mid Autumn Festival. It is expected that the market will continue to organize and operate in the future.
In terms of demand: “Golden September” has entered the end of the month, and the main terminal demand for ABS has not yet shown the peak season level, but instead continues the off-season trend, with a strong wait-and-see sentiment. The high-temperature holiday for home appliance manufacturers has basically ended, but the overall load position of downstream factories is slowly recovering. The recovery of terminal demand is slow, and stocking operations are mainly based on weak demand to maintain production. Traders lack confidence, have a low willingness to build warehouses, and offer according to market conditions, resulting in a slower flow of goods. Overall, the demand side is not providing strong support to the market.
Future forecast
In late September, domestic ABS prices showed a weak trend. Upstream material sorting is the main focus, with average comprehensive support for ABS cost side. The load of the ABS polymerization plant is stable with small fluctuations, and the finished product inventory is slightly digested. The weak and rigid demand situation on the demand side continues, and market trading remains weak. The mismatch between supply and demand in the market is difficult to change, and due to the influence of multiple bearish factors, the traditional demand peak season expectation in September has not been fulfilled. The market has a bearish attitude towards the future, and it is expected that the ABS market will maintain a weak trend in the short term.
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