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SunSirs: Bearish Dominance, Chinese ABS Declined in March (Mar.1 – Apr.1)

April 02 2020 10:57:43     SunSirs (Linda)

1. Price trend

According to data from the SunSirs block list, the domestic ABS market in March continued its previous weak trend and expanded, and the spot price of the market has been significantly reduced. As of April 1, the mainstream ABS mainstream offer price was around 10,850.00 yuan / ton, which was a 14.90% drop from the previous March average price level.

2. Analysis of influencing factors

Industrial chain: In all upstream aspects of BS, the styrene market in March dropped significantly. In the first half of the month, due to the negative news of crude oil chemical industry, domestic styrene prices fell. In the second half of the month, it was directly reflected in the weakness of the cost side, which dragged down the price of styrene. Towards the end of the month, panic intensified in Europe and the United States, and prices in overseas markets fell sharply. The price gap between regions has widened, there is room for arbitrage, and some hedging operations have occurred in China, which will increase the pressure on the basis of the weak market. Although domestic supplies have fallen at the end of the month, inventory at factories and ports is expected to decline. However, the market's bearish intentions are too heavy, and due to the impact of overseas health events, the market is not optimistic about the future. Although there are individual dips, it is still unable to stop the downward price;

In the first half of the month, acrylonitrile was also affected by the negative news of the crude oil chemical industry. In addition to the recent increase in production capacity, the market was clearly negative. The rate of resumption of downstream work is not as good as before the holiday, and even the load reduction occurred at the end of the month. Just a small number of orders are needed for stock preparation, and it is difficult to improve during the shrinking demand period. At present, the market lacks a positive boost, and the industry's mentality is sluggish. It is expected that the acrylonitrile market may not improve in the near future;

The domestic butadiene market continued its weak downward trend in March. Macro-negative news such as the plunge in crude oil caused domestic merchants to be cautious. The sluggish downstream inquiry dragged down supplier prices and the market focus continued to decline. In addition, the European market is under pressure, and the downstream rubber industry has high inventory levels. There is no shortage of low-cost news in the external disk market. At present, domestic butadiene has ample spot supply, but the downstream product market is not good, and the synthetic rubber industry in the middle of the industrial chain is under high pressure. In addition, there is ample supply of butadiene in Europe in the near future, and the market has heard of low prices. Brings a noticeable drag. At the same time, the spread of low-price transactions in the domestic market has dragged down overall butadiene prices. The fundamentals of supply and demand in the internal and external disks are difficult to support in the short term. Good short-term domestic butadiene market prices continue a weak downward trend. It is recommended to pay attention to internal and external disk transaction news guidelines. ;

3. Market Forecast

SunSirs analysts believe that the market for ABS in March was down, and the decline in spot prices of various brands expanded. In terms of cost, the three upstream materials are not good in recent trends, and they have no support for cost. ABS spot supply is currently sufficient, but downstream demand is weak. The negative factors in the market dominate the market, and the external news surface is too short. Business confidence has been hit and shipments have been lowered. It is expected that domestic ABS prices may continue to weaken in the near future.

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