In May, the domestic ABS market continued its volatile downward trend, with spot prices for most grades seeing reductions. According to data from SunSirs' "Spot Connect" service, as of May 31, the average price for benchmark ABS products stood at 9,900 RMB per ton—a decline of 11.45% compared to the beginning of the month.
Supply Levels: Entering May, the domestic ABS industry witnessed a mix of plant maintenance shutdowns and restarts. Throughout the month, overall industry operating rates fluctuated at a low level, stabilizing at around 59% by month-end. Current weekly average production stands at just under 130,000 tons, while finished product inventories hover near the 200,000-ton mark. Shipments from polymerization plants gradually slowed down over the course of the month; looking ahead, a slight increase in production is anticipated in the short term. Overall, the supply side of the ABS market provided reasonably effective support for spot prices during 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. Although it will take some time for shipping operations in the Strait of Hormuz to fully recover, market consensus suggests that the conflict in the Middle East is highly likely to de-escalate. The geopolitical standoff between the U.S. and Iran triggered sharp fluctuations in risk premiums; consequently, oil prices surged in mid-May only to suffer a steep decline again in the latter half of the month. Impacted by these trends, the cost values of the three upstream raw materials—all integral to the petrochemical chain—were dragged down. Throughout the month, overseas supplies of acrylonitrile remained tight; however, as domestic plants undergoing maintenance gradually resumed operations, expectations for an easing of supply began to emerge. Simultaneously, downstream consumption volume remained limited, resulting in acrylonitrile prices consolidating within a weak range.
In May, the domestic butadiene market experienced a volatile, softening trend. Although the market showed signs of weakening cost support, some enterprises remained in a state of shutdown for maintenance; consequently, there was no net increase in industry supply, and midstream traders maintained their willingness to hold up prices. Furthermore, in the latter half of the month, operating rates in downstream sectors—such as synthetic rubber production—began to recover, leading to a partial improvement in end-user demand. It is anticipated that the butadiene market may soon begin to establish a price floor.
Regarding styrene market trends, the overall trajectory was one of volatile decline. From the perspective of raw materials, pure benzene prices consolidated before trending downward at the end of the month. Styrene consumption continued to lack effective driving forces, leaving the market with insufficient momentum for an upward rebound. However, expectations for a contraction in styrene supply persist; consequently, it is anticipated that any further downside in the styrene market may be limited in the near future. Regarding demand: During the month of May, there was limited change in the operating rates of downstream ABS enterprises. The key terminal sector—the home appliance industry—gradually entered its off-season; consequently, demand for appliance casings remained lackluster, and the profitability of terminal manufacturers showed no signs of improvement. Market sentiment was characterized by a "buy-on-rally, sell-on-decline" mentality, leading to a significant reduction in restocking and position-building activities. Furthermore, traders holding profitable positions from earlier periods engaged in "sell-low-to-cash-out" operations to realize gains, while buyers exhibited strong resistance toward high-priced supplies. Overall, demand-side factors provided weak support for ABS market trends.
Throughout May, domestic ABS market prices continued their downward trajectory. Production loads at polymerization plants fluctuated within a narrow range, ensuring that market supply remained ample. Raw material costs underwent a weak, consolidative adjustment. The current ABS market remains overshadowed by bearish pressure stemming from weakening demand. At present, the center of gravity for spot prices has shifted lower, and market trading activity remains relatively sluggish.
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