In mid-May, the domestic ABS market trended lower, with spot prices for certain grades seeing downward adjustments. According to data from SunSirs' "Spot Connect" service, as of May 19, the average price of benchmark ABS products stood at 10,700 RMB/ton—a decline of 4.29% compared to the beginning of the month.
Supply Levels: During the middle of May, the domestic ABS industry witnessed a mix of plant maintenance shutdowns and restarts. The industry's overall operating rate currently exceeds 58%, representing a slight increase in total production load. The current weekly average output is just under 130,000 tons, while finished product inventories have retreated to below the 200,000-ton mark. Shipments from polymerization plants have slowed down compared to pre-holiday levels; looking ahead, a slight increase in production volume is anticipated in the short term. Overall, the supply side of the ABS market provided reasonably effective support for spot prices during mid-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 sending out a flurry of positive signals. Consequently, the market generally expects the conflict in the Middle East to de-escalate. However, the resumption of shipping through the Strait of Hormuz will still take some time, and the risk premium driven by the geopolitical standoff between the U.S. and Iran remains in effect. Coupled with the accelerated depletion of global oil inventories, these factors drove a rebound and surge in oil prices during the middle of the month. Nevertheless, the impact of this oil price rally on the three upstream raw materials—which form the petrochemical chain leading to ABS—has been poorly transmitted. Regarding acrylonitrile, although overseas supply remains tight, domestic plants that had undergone maintenance are gradually resuming operations, leading to expectations of easing supply. Simultaneously, downstream consumption has not shown any significant increase in volume; as a result, acrylonitrile prices have been consolidating within a weak range.
In mid-May, the domestic butadiene market experienced narrow, sideways fluctuations. While the market showed signs of weakening cost support, the bearish sentiment that had prevailed earlier in the period has largely dissipated. On the other hand, industry operating rates have been lowered, leading to expectations of a contraction in supply. Furthermore, operating rates in downstream sectors—such as synthetic rubber—have begun to recover, resulting in a modest improvement in previously sluggish terminal demand. It is anticipated that the butadiene market may soon establish a price floor.
As for styrene, market prices continued their downward trend. From the perspective of raw materials, the rebound in crude oil prices has failed to effectively transmit positive momentum to the pure benzene market. Styrene consumption currently lacks any effective driving forces, leaving the market with insufficient momentum to rally. However, expectations of a contraction in styrene supply persist; consequently, any further declines in the styrene market are expected to be limited in the near term. Regarding demand: During the mid-May period, there was limited change in the operating rates of downstream ABS enterprises. The major end-use sector—the electrical appliance industry—gradually entered its off-season; consequently, demand for appliance casings remained lackluster, and the profitability of end-users showed no signs of improvement. Market sentiment was characterized by a "buy-on-strength, avoid-on-weakness" mentality, leading to a significant reduction in inventory replenishment and position-building activities. Furthermore, traders holding profitable positions from earlier periods engaged in "sell-low-to-cash-out" operations, while buyers exhibited strong resistance toward high-priced supplies. Overall, demand-side factors provided weak support for ABS market trends.
In mid-May, domestic ABS market prices softened. Production loads at polymerization plants continued to edge upward slightly, ensuring that market supply remained ample. Raw material costs trended sideways with a downward bias. The current ABS market remains overshadowed by bearish pressure stemming from weakening demand. Consequently, the center of gravity for spot prices has shifted lower, and market trading activity remains relatively sluggish.
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