At the end of October, the domestic ABS market continued to be weak, with most spot prices of various grades lowered. According to the Commodity Market Analysis System of SunSirs, as of October 27th, the average price of ABS sample products was 9,287.50 RMB/ton, with a price level increase or decrease of 5.71% compared to early October.
Supply level: Since October, the overall operating rate of the domestic ABS industry has remained stable with small fluctuations. Recently, except for Haijiang in Shandong, which has reduced its load to 60%, there have been no announced maintenance tasks for other polymerization plants. Later, Zhejiang Petrochemical planned to increase production, while Huajin Chemical planned to restart the front line. The industry load level has slightly decreased by 0.2% to around 72.8%. The average weekly output remained stable at over 140,000 tons, while the inventory level of aggregation enterprises remained stable at a high level close to 260,000 tons, and the on-site supply remained abundant. Overall, the long-term loose supply pattern in the ABS market remains unchanged, and the supply side's support for ABS spot prices continues to be weak.
Cost factor: At the end of October, the overall trend of ABS upstream three materials was weak, and the impact on the cost side of ABS did not improve. Among them, the fundamental changes of acrylonitrile are limited, the overall supply is loose and there is no expectation of reduction in the short term, while the demand remains overall. Buyers mainly purchase on demand, and acrylonitrile manufacturers continue to lower prices. In addition, the cost support has also weakened recently, and the market may continue to move downwards.
Recently, the domestic butadiene market has fluctuated and declined. The enthusiasm for entering the downstream synthetic rubber market is low, and the purchasing intention for raw material butadiene is weak. The actual transaction performance in the market is poor, and there is a lack of demand support. In addition, due to the restart of some domestic facilities, the overall supply side is relatively loose. The market lacks favorable factors to boost, so it is recommended to focus on downstream procurement demand.
Styrene stopped falling at a low level at the end of October and rebounded slightly. The main port in East China for raw material pure benzene maintains a pace of destocking, but the market mentality is weak and the market continues to weaken and decline. Recently, although there has been a slight decrease in styrene port inventory, there is significant resistance to price increases due to the drag of the decline in crude oil prices. The main downstream consumption is expected to remain stable with moderate growth, and there are no signs of large-scale volume expansion. It is expected that the styrene market will operate weakly in the short term.
On the demand side: In the medium to long term, the downstream factories of ABS have had average loads. In October, the aggregation plant experienced double inventory accumulation and increased shipping pressure. On the other hand, terminal enterprises are affected by the macro market environment, resulting in weakened sales and profitability. The consumption of the main downstream electrical appliance shell industry is still in a dormant state, and there is no increase in production scheduling. The cautious atmosphere in the external market remains unchanged, and the industry's export situation is poor. The overall stocking logic still maintains the urgent need for replenishment, and the flow rate of goods is slow. The inventory position of merchants is also high, and under the increasing pressure of on-site sales, both enterprises and merchants are offering discounts and taking orders. Overall, there has been no improvement in the demand side's support for the ABS market.
Future forecast
At the end of October, the domestic ABS market maintained a downward trend. The overall weakness of the upstream three materials is due to the high and stable production load of the ABS polymerization plant, with little fluctuation, and no increase in consumer demand. 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. The bullish fundamentals in the future are difficult to show, and this year's ABS peak season has been falsified, causing many industry players to have a bearish attitude. It is expected that there will still be downward pressure on ABS in the short term.
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