At the beginning of April, the domestic ABS market was consolidating and moving, with some spot prices of certain grades fluctuating. According to the Commodity Market Analysis System of Shengyi Society, as of April 7th, the average price of ABS sample products was 11225 yuan/ton, with a price level increase or decrease of -0.44% compared to the beginning of the month.
Fundamental analysis
Supply level: In April, the operating rate of the domestic ABS industry has decreased, and the overall load has decreased by 5% to around 68% compared to the end of March. The average weekly production has returned to below 130000 tons, but it is still at a high level. The inventory level of aggregation enterprises is above 190000 tons, and the supply of goods is still very abundant. At the end of March, petrochemical plant orders were slightly higher due to the impact of additional orders. However, buyers’ willingness to stock up is not high, and the increase in trading volume is rapidly cooling down, leading to a return to a relatively weak market atmosphere. Overall, the supply side supports fluctuations in ABS spot prices.
Cost factor: As we enter April, the trend of ABS upstream materials has collectively weakened, providing poor support for ABS costs. In terms of acrylonitrile, some units in East China and Shandong regions have reduced their load or undergone maintenance. At the same time, the new production capacity of Yulong Petrochemical’s acrylonitrile unit has not been fully released, resulting in a period of supply reduction. And after the early low price inventory reduction, the industry’s inventory pressure has been partially relieved. As a result, the domestic acrylonitrile market fluctuated and rose, providing conditions for market growth. However, considering that the overall supply is still abundant, the short-term market growth may still be limited.
The domestic butadiene market has shown a recent trend of first rising and then falling, with an overall downward trend. Due to the impact of the early holiday period, some downstream stocks fell and then replenished their positions, resulting in a concentrated market transaction. With some auction sources selling at a premium, the market trend has significantly shifted upwards. Although the supply side prices remained firm, the high-level trading in the later part of the week was somewhat deadlocked. At the same time, the news of the US tariffs affected the decline of futures, and the news affected downstream buyers to be cautious. After short-term fluctuations, the market saw a significant decline in prices.
Recently, the styrene sector has been in a plateau period, with narrow range fluctuations in price. Previously, the raw material pure benzene rebounded after falling, and coupled with the expected tightening of supply due to the peak maintenance season for styrene in April, styrene followed suit at the end of March. However, the recent heavy decline in crude oil and pessimistic expectations for the future have constrained the styrene market, and it is expected that styrene may weaken in the short term.
On the demand side: In early April, the load of downstream ABS factories in the ABS terminal was generally flat, and the purchasing logic was biased towards buying at the bottom and supplementing orders for urgent needs. The atmosphere of on-site purchasing briefly rose. However, with the exhaustion of essential orders, on-site trading has become sluggish and the flow of goods has returned slowly. Overall, the demand side provides moderate support for the ABS market.
Future forecast
At the beginning of April, the domestic ABS market fluctuated and consolidated. The changes in the upstream three materials are relatively narrow, which provides average comprehensive support for the cost side of ABS. The load of ABS polymerization plant has been reduced, and there are reports of dual major factories undergoing maintenance in the future. The demand side consumption has increased to a certain extent, and currently downstream enterprises are returning to a flat purchasing trend. Business analysts believe that although ABS has fallen to near cost price, the market will have strong supply and weak demand in the long term. Due to the heavy impact of tariff policies on crude oil, there is a heavy emphasis on pessimistic expectations for the future market, and it is difficult to find any positive results. In the short term, the market will still be dominated by weak consolidation.
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