The domestic ABS market remained relatively strong in December, with spot prices of various grades increasing. According to the Commodity Market Analysis System of Shengyi Society, as of December 31st, the average price of ABS sample products was 11837.50 yuan/ton, with a price level increase or decrease of+3.05% compared to the beginning of the month.
Fundamental analysis
Supply level: In December, the operating rate of the domestic ABS industry remained stable with small fluctuations, and the industry load level increased narrowly by about 3% to 72% compared to the beginning of the month. In the early stage, Hengli Petrochemical’s AS plant was converted to ABS, and the Tianjin Dagu blowing task ended, gradually returning to production capacity. The average weekly production within the month is around 120000 tons, and there is limited change in the inventory of aggregation enterprises, with a position level of 160000 tons. The overall pattern of abundant supply of goods remains unchanged. Overall, the supply side provided average support for ABS spot prices in December.
Cost factor: Since December, the upstream three materials of ABS have shown two increases and one decrease, with overall support for ABS costs being average. In the first half of the month, the domestic acrylonitrile market remained at a high level with an increase, while major factories in East China maintained low load operations, resulting in low inventory levels and tight supply in the industry. The operating rate has increased in the latter half of the year, leading to an increase in supply. Some production enterprises have continuously lowered their factory prices, resulting in a slight decline in overall market prices. The market has experienced a slight decline.
The available supply of butadiene in the spot market is generally tight and continues to rise during the month. The holder of the goods has a strong mentality of supporting the price. At the same time, the inventory of ports in East China is relatively low, and the downstream synthetic rubber futures market is strengthening, driving a stronger market atmosphere. But as prices continue to rise, downstream receiving capacity gradually declines, and buying sentiment in the market begins to weaken, the market’s upward momentum weakens, and the market may return to balance.
In December, the styrene market fluctuated and fell. The performance of upstream crude oil in the far end is still acceptable, with the main focus on consolidating the price of pure benzene as the direct raw material. However, the cost side of styrene has largely exhausted its support for spot prices in the early stage. The operating rate of domestic industries is gradually recovering, and the tight supply situation is lifted. With the restart of facilities, the supply is further relaxed. At present, there is a lack of boosting factors in the market, leading to a consolidation of the market.
On the demand side: Downstream purchasing power remained strong in December, while on the terminal side, due to the continued stimulation of the national subsidy policy for household appliances, some terminal products sold in large quantities, leading to the digestion of enterprise inventory. Due to the concerns of home appliance exporters about the remote market, some export demand has been pushed forward, the overall load position of factories has rebounded, terminal stocking willingness has strengthened, and procurement operations have increased synchronously. Merchants attempted to increase their offers, but the activity of supply circulation remained high. Overall, the demand side can still provide support to the market.
Future forecast
In December, the domestic ABS market showed a strong consolidation trend. The performance of the upstream three materials is average, and the comprehensive support for ABS cost side is flat. The load of ABS polymerization plant has slightly rebounded, and finished product inventory continues to be digested. On the demand side, the demand is relatively strong, and the market continues to be guided by consumption and remains stable with some strength. However, the increase in demand for household appliances may overdraw future consumption, and with holidays approaching and limited demand on the market, businesses have concerns about the post holiday market. Business analysts believe that the ABS market may return to a narrow range consolidation trend.
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