Since mid July, the overall ABS market has continued to consolidate weakly, with some grades experiencing a decline in spot prices. According to the Commodity Market Analysis System of SunSirs, as of July 21st, the average price of ABS sample products was 10,350 RMB/ton, with a price level increase or decrease of -2.59% compared to early July.
Supply level: Since mid July, the load of the domestic ABS industry has remained stable with small increases, and the overall load level has been raised from 65% to around 67%. The weekly average production has remained stable at over 120,000 tons, and the inventory position of aggregation enterprises is also stable and rising at over 200,000 tons. The on-site supply remains abundant. The return of maintenance in the early stage of Haijiang Chemical and the recent increase in construction in Dalian Hengli and Liaoning Jinfa have further relaxed the supply side of the industry. Overall, the ABS market is not in a long-term pattern of loose supply, but fortunately the industry inventory is relatively controllable. The future supply of goods tends to be loose, and the support for ABS spot prices from the supply side is average.
Cost factor: Recently, the overall trend of ABS upstream three materials has been declining and rising, which has limited support for the cost side of ABS. The acrylonitrile market remains deadlocked and weak, with enterprise capacity utilization and output basically leveling off. Although the Haijiang plant in Shandong is still in a shutdown state, the expansion of the 260,000 ton acrylonitrile plant by Jilin Petrochemical in the future is planned to be put into operation by the end of July, and the 260,000 ton acrylonitrile plant by Liaoning Jinfa Technology is planned to be restarted and restored by the end of July. The expected supply growth continues to affect market sentiment. The overall utilization rate of downstream production capacity has significantly decreased, and enterprises purchase raw materials on demand, resulting in a weakening of overall demand. In addition, the decline in raw materials and industry profits have made it difficult for the acrylonitrile market to see any positive results, and the weakness is difficult to change.
The domestic butadiene market has been fluctuating and rising recently, with insufficient port arrivals in East China and low inventory levels, boosting market sentiment. Mainstream refineries generally transact at a premium, driving market sentiment to further strengthen. The demand side has shown stable performance recently and urgently needs to replenish inventory. Overall, it is expected that the butadiene market will mainly operate steadily, moderately, and strongly supported by favorable supply side conditions.
Styrene has been fluctuating and falling recently. Upstream crude oil fluctuates, pure benzene consumption tends to be weak, and the support for styrene is poor, while supply side port inventories continue to increase. Under the pressure of expanding losses and high inventory of finished products, downstream companies in the Three S sector continue to stop and reduce their burden, resulting in a weakened demand for styrene. The current fundamentals of the styrene market are weak and difficult to change, and it is expected to operate weakly in the future.
On the demand side: In the medium to long term, the downstream factories of ABS have had average loads. The current market is in the traditional off-season range, and terminal enterprises maintain a strong demand for supplementary orders. Since the middle of the month, the market concerns caused by the deterioration of geopolitics in the Middle East have been basically digested, and industry players are more concerned about the uncertainty of US future tariff policies and their impact on market demand. The atmosphere of caution is pervasive in the market, and the flow of goods is slow. Domestic inventory levels remain high and sideways, with continued loose supply and ample room for on-site turnover. Overall, there has been no improvement in the demand side's support for the ABS market.
Future forecast
Since mid July, the domestic ABS market has continued to weaken and consolidate. The prices of upstream three materials are generally weak, and the production load of ABS polymerization plants is stable with small increases, while the demand side is at a low season level. Analysts from SunSirs believe that the long-term drag on spot prices of ABS due to supply and demand contradictions makes it difficult for the market momentum to improve. It is expected that the ABS market will maintain a consolidation pattern in the short term.
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