SunSirs: China ABS Industry Develops Well in 2020

According to the monitoring data of SunSirs, in 2020, the domestic ABS market will first restrain and then rise, and the price will increase by 24% at the end of the year compared with the beginning of the year.

In the first quarter of 2020, just at the beginning of the epidemic, the shutdown had a wide impact on the industrial chain. Upstream styrene, acrylonitrile, butadiene market overall negative ABS cost, after the Spring Festival holiday, spot prices opened a downward channel. Market bearish factors dominated, and the external news surface was short, ABS market continued to fall to the end of March.

The turning point of the market appeared in April, and the effectiveness of epidemic prevention LED production and life. ABS returns to normal law of supply and demand price, but downstream factories still have considerable inventory to digest. At the end of April, the sales of helmets broke the deadlock. Some businesses even made a price increase of 500%, accompanied by the phenomenon of reluctant to sell. ABS, as the main material of helmet outer layer, has a rapid growth. In May, the operating rate of ABS petrochemical plant in China was almost full load operation, the industry operating rate was nearly 98%, and the spot price was pushed up by more than one third. It was not until June and July that the ABS rally slowed down. SunSirs believes that the continued supply shortage pattern in the second half of the year is inseparable from the outbreak of ABS demand in the second quarter.

Strong terminal demand, 2020 ABS sales season performance is satisfactory. In particular, the consumption of major domestic appliance enterprises and the automobile industry has remained at a high level, aggravating the tense situation of market supply. Although the lower reaches of the market are resistant to high price goods, the demand side is stable. With the long-term rise of ABS, the cost pressure of downstream factories gradually increases at the end of the year. At present, the downstream purchasing operation is more resistant to high price goods. Business offers are stable, but price cuts are frequent.

ABS analysts believe that: in 2020, ABS has such a rise due to the demand side. The mutual achievement of ABS industry chain reflects the positive development of ABS and even rubber and plastic industry in China in 2020. SunSirs thinks that the ABS industry is developing well this year and the market can be expected in 2021.

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