Since July, the ABS market has generally remained weak, with spot prices for some grades falling. According to the SunSirs Commodity Market Analysis System, as of July 31st, the average price of sample ABS products was 10,312.50 RMB/ton, a -2.94% change from the beginning of July.

Fundamental Analysis

Supply Level: Throughout July, the domestic ABS industry's load remained stable with minor fluctuations, with the overall load level fluctuating from 66% at the beginning of the month to around 67%. Weekly production stabilized at over 120,000 tons, and inventories at polymer companies exceeded 220,000 tons by month-end, maintaining ample supply. With Haijiang Chemical returning from maintenance at the beginning of the month and Liaoning Jinfa adding new production capacity, coupled with increased production at a number of factories, including Dalian Hengli, in the second half of the month, the industry's supply side continued to ease. Overall, the long-term loose supply structure in the ABS market remains unchanged, but fortunately, industry inventories remain relatively manageable. Overall, supply-side support for ABS spot prices remains weak.

Cost Factors: The market for the three upstream ABS materials fluctuated generally in July, providing limited support for ABS costs. The acrylonitrile market remained stagnant, with capacity utilization rates roughly in line with production. Although Shandong Haijiang's plant remains idle, Jilin Petrochemical's 260,000-ton acrylonitrile expansion unit is scheduled to start production at the end of July, and Liaoning Jinfa Technology's 260,000-ton acrylonitrile unit will also restart at the end of the same month. Expectations of increased supply continue to influence market sentiment. Overall downstream capacity utilization has declined significantly, with companies procuring raw materials on demand, leading to weakening overall demand. Coupled with slightly insufficient cost support, the acrylonitrile market is expected to remain stagnant in the short term.

The domestic butadiene market declined in the first half of July and then rebounded in the second half. Initially, due to insufficient demand, major producing areas actively exported, resulting in some unsold products and leading refineries to lower their ex-factory prices. In the second half of the month, insufficient port arrivals in East China, after inventory levels were reduced, boosted market sentiment, leading companies to shift to premium trading. Market fundamentals are expected to weaken the butadiene market overall, leading to a period of volatility.

Styrene prices fluctuated and declined throughout July. Upstream crude oil and benzene prices fluctuated, and although there was an upward trend towards the end of the month, support for styrene was lacking. On the supply side, port inventories continued to rise, losses at some downstream 3S companies increased, and production continued to be shut down under the pressure of high finished product inventories, weakening demand for styrene. The current weak fundamentals of the styrene market remain persistent, and a weak outlook is expected.

Demand: ABS downstream factories have maintained average loads over the medium and long term. The market is currently in its traditional off-season, and end-user purchasing strategies remain focused on replenishing orders based on immediate demand. Since July, market concerns stemming from the deteriorating geopolitical landscape in the Middle East have largely subsided. Instead, industry players are increasingly concerned about the uncertainty surrounding US tariffs and their impact on market demand. A cautious atmosphere prevailed in the market, and supply flow was slow. Domestic inventories remained high and sideways, supply remained ample, and there was ample room for market turnover. Overall, demand-side support for the ABS market remained unchanged.

Market Forecast

During July, the domestic ABS market continued to experience a period of weak consolidation. Prices of the three upstream raw materials are generally weak. ABS polymerization plant production loads remain stable with slight increases, and demand remains at off-season levels. Analysts at SunSirs believe that ABS spot prices have been dragged down by a prolonged supply-demand imbalance, making it difficult for market momentum to improve. They predict that the ABS market will likely remain in a consolidation pattern in the short term, with spot prices for some grades declining. According to SunSirs Commodity Market Analysis System, as of July 31, the average price of sample ABS products was 10,312.50 RMB/ton, a -2.94% change from the beginning of July.

Fundamental Analysis

Supply Level: Throughout July, the domestic ABS industry's load remained stable with slight fluctuations, fluctuating from 66% at the beginning of the month to around 67%. Weekly production stabilized at over 120,000 tons, and by the end of the month, polymerization plant inventories remained high at over 220,000 tons, with some increases, maintaining ample on-site supply. With Haijiang Chemical returning from maintenance at the beginning of the month and the commissioning of new capacity at Liaoning Jinfa's new facility, coupled with a series of production increases at companies like Dalian Hengli in the second half of the month, the industry's supply side continued to ease. Overall, the long-term loose supply structure in the ABS market remains unchanged, but industry inventories are relatively manageable. Overall, supply-side support for ABS spot prices remains weak.

Cost Factors: Prices for the three upstream ABS materials experienced a period of volatility and decline in July, providing limited support for ABS costs. The acrylonitrile market remained stagnant, with capacity utilization rates roughly in line with production. Although Shandong Haijiang's plant remains idle, Jilin Petrochemical's 260,000-ton acrylonitrile expansion unit is scheduled to start production at the end of July, and Liaoning Jinfa Technology's 260,000-ton acrylonitrile unit will also restart at the end of the same month. Expectations of increased supply continue to influence market sentiment. Overall downstream capacity utilization has declined significantly, with companies procuring raw materials on demand, resulting in weakened overall demand. Coupled with slightly insufficient cost support, the acrylonitrile market is expected to remain stagnant in the short term.

The domestic butadiene market declined in the first half of July, followed by a correction in the second half. Initially, due to insufficient demand, major producing areas actively exported, resulting in some unsold units and leading refineries lowering their ex-factory prices. In the second half of the month, insufficient arrivals after depletion of port inventories in East China boosted market sentiment, leading companies to shift to premium transactions. The butadiene market is expected to remain generally weak and volatile due to weak fundamentals.

Styrene saw a volatile decline during July. Upstream crude oil and benzene fluctuated, and although there was an upward trend at the end of the month, both provided little support for styrene. On the supply side, port inventories continued to rise, losses deepened for some downstream 3S companies, and continued production closures under pressure from high finished product inventories, weakening demand for styrene. The current weak fundamentals of the styrene market remain persistent, and a weak trend is expected in the future.

On the demand side, ABS downstream factories have maintained moderate loads in the medium and long term. The market is currently in its traditional off-season, and end-user purchasing strategies are primarily focused on replenishing orders based on immediate needs. Since July, market concerns stemming from the deteriorating geopolitical landscape in the Middle East have largely subsided. Instead, industry players are more concerned about the uncertainty surrounding US tariffs and their impact on market demand. This has led to a cautious atmosphere in the market, and slow supply flows. Domestic inventories remain high and sideways, with supply remaining ample, providing ample room for liquidation. Overall, demand support for the ABS market has not improved.

Market Forecast

During July, the domestic ABS market continued to consolidate, showing a weak trend. Prices of the three upstream raw materials were generally weak, while production loads at ABS polymerization plants remained stable with slight increases, keeping demand at off-season levels. Analysts at SunSirs believe that the prolonged supply-demand imbalance has dragged down spot prices for ABS, making it difficult for market momentum to improve. The ABS market is expected to maintain a consolidation pattern in the short term.

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