SunSirs: Inventory partially Digested, China ABS Market rebounded in a Narrow Range

Recently, the domestic ABS market has rebounded in a narrow range, with spot prices stabilizing after a slight increase. According to the Commodity Market Analysis System of the Business Society, as of June 19th, the average price of ABS sample products was 10400 yuan/ton, a decrease of -0.24% compared to the average price level at the beginning of the month.

On the supply side: Last week, the load of the ABS industry remained almost flat, with an increase in early enterprise maintenance and independent load reduction. The current industry operating rate is about 77%. The on-site spot supply is abundant, and the pressure on the supply side has slightly eased. The overall inventory continues to be consumed due to short supply and oversold, and supply side support for the spot market has rebounded.

In terms of raw materials, the overall performance of ABS upstream three materials has been average recently. The supply of raw material acrylonitrile is still loose, coupled with the continued weakening of demand and low consolidation of cost, it is expected that the acrylonitrile market will be weak and volatile in the short term; It is recommended to closely monitor the industry's operating rate.

Last week, the domestic butadiene external market continued to decline, which had a certain drag on the domestic spot market. Despite the restart of Bora and the production of Sanjiang, the supply side news remains weak. As the price of butadiene drops to a low point, the profits in the industrial chain move downward, and downstream positions are filled with bargains, providing some bottom support to the market. However, the strength is limited, and the butadiene market is still mainly characterized by a stalemate and consolidation.

From the figure below, it can be seen that the recent decline in styrene market prices has led to a pullback. International oil prices have rebounded strongly, with good cost support. The styrene market is trading on dips and has a strong mentality. It is expected that the styrene market may rise mainly in the short term.

In terms of demand: Currently, downstream factories, including the main terminal home appliance industry, have average stocking enthusiasm, and the operating rate is generally at the off-season level. The manufacturer has a cautious wait-and-see attitude, but there are some low-priced short selling operations in the market, but overall demand improvement is limited.

Recently, the stalemate among the three upstream materials of ABS has been weak, providing poor support for the cost side of ABS. The construction of petrochemical plants has decreased compared to the beginning of the month, and the market inventory has been partially digested. However, the demand side support is limited, and the overall weak and rigid demand pattern is maintained. It is expected that China ABS market may continue this stalemate.

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