Following the ceasefire memorandum between the US and Iran, international crude oil prices plummeted repeatedly, putting the aromatics industry chain under widespread pressure; styrene prices also fell sharply in tandem. Consequently, high-cost pressure from the feedstock side has effectively eased, leading to a recovery in the profitability of key downstream enterprises.
A look at recent profit trends for key downstream sectors reveals the following: markets for feedstocks like styrene and butadiene have dropped sharply, while the acrylonitrile market has surged; ABS production costs have decreased, gradually narrowing losses; the EPS market saw a sharp decline followed by a slowdown—with an overall drop less severe than that of styrene—allowing producers to maintain slight profitability; and production costs for various PS grades have fallen significantly, theoretically improving profit margins. A short-term breakdown follows:
ABS: Despite the sharp, temporary drop in crude oil and chemical feedstock prices following the US-Iran agreement, ABS prices have shown resilience. Having previously been oversold—and with petrochemical producers successfully reducing inventories through production cuts and low-price sales—the willingness to continue slashing prices has weakened significantly. While theoretical profitability has improved markedly, producers still struggle to escape a loss-making position.
EPS: EPS prices entered a phase of accelerated decline in mid-to-late June, pressured by both inter-regional price competition and supply-demand dynamics. This downturn was compounded by the industry's off-season and adverse weather (high temperatures and frequent rain), increasing the pressure on inventory holders to offload stock and driving market transaction prices lower. A "buy-on-rise, not on-fall" mentality has dampened trading activity, while inventory pressure has forced producers to actively offer price concessions to move goods. In the short term, EPS profit margins may narrow slightly, fluctuating around the break-even point.
PS: Recently, the price of feedstock styrene plunged, causing the PS market—which had already been drifting downward—to accelerate its decline; however, tight supplies for certain grades persist, allowing for a gradual recovery in profitability. Looking ahead, as cost support weakens and the market is dragged down by sluggish supply-demand fundamentals, PS prices are expected to continue falling, potentially narrowing profit margins. In summary, the price fluctuation range for the raw material styrene has dropped significantly of late, easing high-cost pressures to some extent. ABS is expected to show strong price resilience, and while theoretical profit margins for producers may continue to improve, escaping the loss-making situation remains difficult. Amid inventory pressure, EPS producers are actively offering price concessions to move stock, likely causing profit margins to narrow slightly and hover around the break-even point. Meanwhile, PS is being significantly weighed down by supply-demand imbalances, suggesting a potential narrowing of profit margins for producers.
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