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.

1、 Price trend

According to the monitoring of the bulk ranking data from Shengyi Society, the overall price of bromine remained weak in December. At the beginning of the month, the average market price of bromine was 22400 yuan/ton, and at the end of the month, the average market price of bromine was 21900 yuan/ton, a decrease of 2.23% and a year-on-year decrease of 11.69%. On December 30th, the Business Society Bromine Index was 76.84, unchanged from yesterday, a decrease of 68.66% from the highest point of 245.18 points (2021-10-27) during the cycle, and an increase of 30.41% from the lowest point of 58.92 points on October 29th, 2014. (Note: The cycle refers to the period from September 1, 2011 to present)

2、 Market analysis

The overall price of bromine has been weak this month. The mainstream market price in Shandong region is currently around 21000-22000 yuan/ton. Manufacturers are conducting centralized maintenance, and most downstream manufacturers have also stopped production. Downstream demand is weak. In terms of exports, the import volume of bromine in China in November 2024 was 7939 tons, an increase of 29.13% compared to the previous month. The average import price was $2435/ton, an increase of 1.37% compared to the previous month.

Regarding sulfur: The overall price of sulfur rose in December. At the beginning of the month, the average market price was 1654.33 yuan/ton, and at the end of the month, the average market price was 1691 yuan/ton, with a price increase of 2.22% and a year-on-year increase of 58.53%. The transaction atmosphere in the sulfur market is still acceptable, and the demand for this month is also acceptable.

Business analysts believe that the price of bromine has been consolidating recently. Manufacturers are conducting centralized maintenance, and most downstream manufacturers have also stopped production. Downstream demand is weak. The comprehensive prediction of short-term bromine prices or consolidation of the market situation based on the supply-demand game depends on downstream market demand.

Weak aluminum prices in December

Aluminum prices remained weak in December. According to the Commodity Market Analysis System of Shengyi Society, as of December 31, 2024, the average price of aluminum ingots in the East China market in China was 19783.33 yuan/ton, a decrease of 2.90% compared to the market average price of 20373.33 yuan/ton on December 1.

Reasons for the stabilization of aluminum prices at the end of December:

At the end of December, aluminum prices stopped falling and stabilized, mainly due to the combined effects of the following factors:

Firstly, after mid to late November, aluminum prices experienced a phased decline. Due to the influence of high priced raw materials, manufacturers of outsourced alumina had high costs and incurred losses, leading to an increase in the industry’s willingness to reduce production and raise prices;

Secondly, the Guinea factor has once again been disturbed, and concerns about transportation channels have raised expectations for the price of alumina, leading to an impulse for aluminum ingots to rise;

Thirdly, as the end of the year approaches and long-term negotiations for the coming year begin, the competition in the aluminum price market intensifies;

Fourthly, in December, the social inventory of domestic aluminum ingots was depleted by 80000 tons, and the overall destocking was good.

In 2024, the profit of mainstream acrylonitrile production processes in China showed a trend of rising and then falling. In the first half of the year, the profit was basically positive, but in the second half of the year, the profit rapidly declined. The estimated average profit for the whole year is around -250 yuan/ton, with a year-on-year increase of 54.9%. In addition, the average annual production cost of mainstream acrylonitrile processes in 2024 is around 9550 yuan/ton, a year-on-year decrease of 433 yuan/ton. The decrease in raw material costs is one factor contributing to the recovery of acrylonitrile production profits, but the main reason comes from the temporary reduction in supply, which stimulates the rise in acrylonitrile prices.

During the first half of the year, the production profit of acrylonitrile increased significantly, with the highest single ton profit in April and May approaching 1500 yuan/ton. During this period, domestic production significantly decreased, and the supply-demand relationship improved, thereby stimulating a sharp rise in acrylonitrile prices and increasing profits. In addition, the profit of acrylonitrile production also improved in December at the end of the year, mainly due to the long-term low load operation of the East China plant and the temporary supply tightening, which stimulated the price of acrylonitrile to rise again. The highest profit point of acrylonitrile within the year also occurred in the first half of the year, with an average of 849 yuan/ton in April. However, the profit rapidly declined in the second half of the year, and the lowest point of the year occurred in August, at -1159 yuan/ton.

In 2024, the fluctuation of acrylonitrile plants in China increased due to fault factors, which affected some planned maintenance times and led to a temporary supply tightening situation under the background of overcapacity. In April, the capacity utilization rate dropped significantly to around 62%, mainly due to unexpected parking and concentrated load reduction. June and July entered the traditional off-season for demand, but due to the significant increase in acrylonitrile prices in the early stage, profit recovery stimulated the gradual recovery of factory production, resulting in a significant increase in capacity utilization in June and July. The fluctuation of production capacity utilization rate in the second half of the year has slowed down, but due to planned maintenance, combined with fault reduction and parking situations, the overall industry operation is still at a low level, which stimulates the price and profit of acrylonitrile to rebound again.

In 2024, there will still be overcapacity in domestic acrylonitrile production capacity, but there will be no new production capacity during the year. The number of production enterprises will remain at 16, and the concentration will still be high. The proportion of CR4 will still reach around 58%. Therefore, fluctuations in the equipment of individual enterprises, especially changes in the equipment of large factories in East China, will still have a direct impact on acrylonitrile supply.

However, in 2025, a new cycle of concentrated production capacity will be ushered in. It is expected that there will be five sets of acrylonitrile production capacity plans totaling 1.31 million tons in China. At that time, the number of domestic acrylonitrile production enterprises will also increase to 20, and the industry concentration will further decrease. At the same time, the impact of individual device fluctuations on market trends will also weaken.

According to the analysis data of the commodity market of Shengyi Society, as of December 27th, the average selling price of PET is 6130 yuan per ton, and the price trend shows a weak trend.

Since mid October, PET prices have continued to show a downward trend due to the dual impact of downstream demand reduction and declining raw material prices. Entering the fourth week of December, the support on the raw material side appears particularly weak. Although OPEC+has once again extended its oil production plan, the measures to reduce production have not offset market concerns about demand, and crude oil prices have not stopped falling. In addition, as the end of the month approaches, some holders are facing increased shipping pressure, while downstream enterprises have a low willingness to replenish, which further weakens the PET market prices amidst fluctuations. However, as market prices fall to lower levels, the room for further decline becomes relatively limited.

Looking ahead, starting from the end of December, with the increasing demand for Spring Festival stocking and the potential increase in operating rates in the oil and PET sheet industries, domestic PET demand is expected to see a slight increase. This trend may provide some support for the PET market. Therefore, in the subsequent market trends, we need to closely monitor the guidance of peripheral policies and the relevant news of subsequent devices. Meanwhile, changes in market demand will also become an important factor affecting the price of PET market.