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SunSirs: The Supply Tightness Has Improved, July ABS Price Rebounds
August 06 2020 09:37:40SunSirs(Joyce)

Price Trend



According to the data from SunSirs, into July, China ABS market condition is declining in a narrow range, in which some grade spots has lowered their prices. As of July 31, the mainstream offer price of universal ABS is about 12,900 RMB/ton, and it has a 2.64% decrease from the beginning of this month.

Factor Analysis



In terms of styrene, the upstream of ABS, is operation stably in July China, and among them, the East China has a slight increase. As for the remote cost end, crude oil fluctuates, but pure benzene and ethylene remain the price, so the indication for styrene’s trend is obscure. In terms of styrene’s downstream, EPS, PS and ABS have a small drop at the end of the month, so they don’t lift the demand for styrene. It’s reported that the warehouse expense of port styrene turns to be higher, exaggerating the burden of selling out the inventory. The futures are lifting, bringing the spot to follow the trend. At the end of the month, the replenishment has transacted. Within the market, some suppliers take a positive attitude towards the styrene, so the low-priced goods reduce. The after-market, undermined by the supplement of the goods, is still supported by some benefits. It is estimated that recently the market will be in a standoff. When combined, this week styrene rebounds limitedly, but it will be more positive in a shot time, so the price is undergoing a correction.

In terms of acrylonitrile, the downstream of ABS, July China market condition transfers the depression to positivity. At the beginning of the month, it’s said that the operating rate of companies is ascending, so the supply burden augments further. Recently the rise of the cost end exerts the pressure to the factories. And thus, under the stress of oversupply and expense, the manufacturers of acrylonitrile lower the load to shunt the contradiction of supply overweighting demand, which at present has improved. As for the downstream of acrylonitrile, most purchase by rigid demands and are cautious about orders. However, the recent reduction of factory production stimulates the market’s positive emotion. The traders’ offer disk turns to be warmer, but the actual transaction is genera. It can be estimated that acrylonitrile marker will continue the positive trend.



The domestic butadiene market rises broadly in July, especially in the second half of the month. According to the monitoring price of SunSirs, China butadiene market price is 3,445 RMB/ton at the beginning of the month, and is 4,473 RMB/ton at the end of the month, an increase of 29.83% during the month, and the price is 49.68% lower than the same period last year. In the first half of the month, the restart of SINOPEC SABIC TianJin Petrochemical Company and North Huajin Corporation’s installations did not continue the wavelet rise of the market at that time. However, the domestic and foreign markets performed strongly during the month, coupled with limited domestic suppliers, the market supply release is not as expected; at the same time, due to the weather, the unloading of some cargoes in East China is postponed, and the spot supply is temporarily tight, boosting supplier prices to accelerate upward, and short-term bullish expectations. The expectations are stimulating downstream enquiries and some sentiments of chasing up prices, further drives the market to climb higher. However, with the rapid upward trend in the market, the market's cautious atmosphere gradually began to increase. At the end of the month, the arrival of cargo at the port and the supply of goods in the northeast increases, and high-priced transactions are blocked, which drags the market down slightly. Looking at the month of August, on the one hand, the high external market and the abundant raw materials of domestic manufacturers may affect the decrease of imported goods in the second half of the month. But at the same time, Liaoning Baolai's 120,000 RMB/year new plant has plans to put into operation, or it will continue to supplement domestic demand. Under the stalemate of supply and demand, butadiene analysts of SunSirs expect the butadiene market to fluctuate among communities and wait for transactions to follow up. The short-term upward resistance is obvious, and the medium-and-long term needs to pay attention to the release of new capacity.

In July, China ABS price market shows a slow decline, and the operating rate of domestic ABS petrochemical plants remains at a high level. In the first half of this period, the market still needs support, and the ABS market is running relatively smoothly. With the petrochemical plant operating at almost full capacity, although the inventory is still low, the spot circulation on the market has begun to increase. In addition, at the end of the month, merchants actively surrender profits to take orders for completing tasks, and downstream factories' stocking operations become more cautious, and demand weakens, resulting in a narrow reduction in many grades.

Market Outlook

SunSirs analysts believe that: in July, the ABS market falls steadily, and the prices of various grades fall within a narrow range. On the cost side, the three upstream materials have seen mixed trends in the near future, and support the cost side generally. At present, the spot supply of ABS has begun to increase, and the downstream is cautious about ABS high-priced goods, and just need to take orders to get the goods. At the end of the month, the merchants actively cut prices to complete the task, and the actual order has space for profits. It is expected that China ABS prices may continue to fall within a narrow range in the near future.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.

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