In early May, the domestic ABS market experienced a decline following an initial uptick, with spot prices for certain grades being lowered. According to data from SunSirs' "Spot Connect" service, as of May 11, the average price for benchmark ABS products stood at 10,950 RMB/ton—a decrease of 2.06% compared to the beginning of the month.
Supply Levels: Entering May, maintenance activities within the domestic ABS industry remained relatively concentrated, resulting in a continued overall reduction in output. At the start of the month, production loads at Zhenjiang Chimei and Shanghai Gaoqiao were both reduced; additionally, scheduled maintenance at Tianjin Dagu and Zhangzhou Chimei facilities was implemented. Consequently, the industry's overall operating rate has dropped to approximately 57%, representing a further 3% decline from the end of last month. The current weekly average output is just under 130,000 tons, while finished product inventories have retreated to below the 200,000-ton mark. Polymerization plants reported robust sales prior to the holiday period; furthermore, expectations for a continued contraction in short-term production volumes suggest that, on balance, the supply side provided reasonably strong support for spot prices during early May.
Cost Factors: Since the beginning of May, news regarding a preliminary peace agreement between the U.S. and Iran has surfaced frequently, with high-ranking officials from both sides issuing a flurry of positive signals. Market consensus suggests a high probability that the conflict in the Middle East will de-escalate, paving the way for a potential resumption of shipping through the Strait of Hormuz and a gradual narrowing of supply deficits. Following the holiday break, the international crude oil market experienced a sharp sell-off; both WTI and Brent crude oil futures plummeted significantly, hitting two-week lows. Impacted by this downturn, the three upstream raw materials within the petrochemical chain—including those for ABS production—have all come under downward pressure. Domestic consumption continues to contract, resulting in weak spot-market buying interest and sluggish transaction volumes. However, persistent shortages in overseas acrylonitrile supplies have kept international market prices at elevated levels, thereby providing continued support for export-oriented sales. Coupled with the strong price trajectory of the raw material propylene, acrylonitrile prices have seen a modest upward adjustment driven by rising production costs.
In early May, the domestic butadiene market trended weakly downward, characterized by a generally lackluster trading atmosphere. The market exhibited a pattern defined by weakening cost support, relatively ample supply, and sluggish downstream demand. Bearish sentiment was pervasive among market participants; suppliers' price quotes continued to soften, while downstream buyers adopted a cautious stance—actively seeking price concessions—with most market transactions limited to small-volume purchases driven solely by immediate, essential needs. With overlapping auction supplies facing sluggish sales, the overall market is under significant downward pressure, and short-term trends are currently situated within a weak correction channel.
Regarding the styrene market, prices continue to decline. From the perspective of raw materials, pure benzene has recently experienced volatile fluctuations with a downward bias. Although imported supplies remain limited and the domestic supply-demand landscape for pure benzene appears relatively robust, these factors have proven insufficient to offset the bearish influence stemming from the sharp plunge in crude oil prices. Meanwhile, styrene consumption lacks effective drivers, resulting in insufficient upward momentum within the market. However, around the holiday period, the supply side of the styrene market has witnessed numerous instances of plant maintenance and reduced operating rates; consequently, future market declines are expected to be somewhat mitigated by these supply-side constraints.
Regarding demand: As May began, operating rates among downstream ABS enterprises showed limited change. Consumption within the key terminal sector—electrical appliance casings—remained lackluster, and the profitability of terminal manufacturers showed no signs of improvement. Market sentiment is characterized by a "buy-on-rise, hold-on-fall" mentality; furthermore, with pre-holiday inventories still requiring digestion, restocking and position-building activities have decreased significantly. Meanwhile, market participants holding profitable positions are offering price concessions to offload stock, while midstream traders—reacting to the drop in crude oil prices—are rushing to liquidate their holdings. Buyers exhibit strong resistance toward high-priced supplies, thereby dragging down the overall price center within the current trading range. In summary, demand-side factors are providing poor support for ABS market trends.
In early May, domestic ABS market prices reversed course, turning downward after an initial uptick. Production loads at polymerization plants continued to edge lower, keeping market supply within an ample range. Cost inputs—specifically the three key raw materials—traded within a weak, consolidating pattern. The current ABS market remains overshadowed by bearish factors, specifically falling production costs and weak demand. Consequently, the center of gravity for spot prices has softened, and market trading activity remains relatively sluggish.
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