SunSirs: Weak Demand, China ABS Market Continued to be Weak in Early November

In early November, the domestic ABS market fluctuated and adjusted, with spot prices of various brands adjusting and operating. According to the Commodity Market Analysis System of SunSirs, as of November 12th, the average price of ABS sample products was 11,175 RMB/ton, a +0.45% increase or decrease compared to the average price level at the beginning of the month.

On the supply side, the recent high load in the ABS industry has continued, with an average weekly operating rate of around 72% as of the end of last week. The production of the enterprise is stable, with a slight increase in weekly total production and a significant increase in inventory positions. The on-site supply of goods is abundant, and the profitability of the enterprise is poor. The drag on the spot market by the supply side has expanded, resulting in high supply pressure.

In terms of raw materials: In early November, the three upstream ABS materials showed mixed fluctuations, with the acrylonitrile market continuing its previous strong trend. Although the demand level is average, the price of propylene at the raw material end has surged, and the cost support for acrylonitrile has increased; In addition, due to the expansion of domestic production capacity losses in the early stage, there are now delays in resuming work on individual devices, resulting in a decrease in market supply and increased supply side support. Acrylonitrile leads to bullish guidance and price increases.

Recently, the domestic butadiene market has been mainly flat. Last week, crude oil prices saw a broad decline, which was negative for petrochemical chain products. In addition, the high price of butadiene has compressed downstream profits, resulting in a decrease in the smoothness of domestic shipments. However, the supplier's operation tends to operate at a relatively high price, so the butadiene market has been able to maintain significant stability and minor fluctuations.

From the figure below, it can be seen that the styrene market price fell in early November. The main reason for the decline is also the decline in international crude oil prices and the weak market for pure benzene. At the same time as cost support weakens, downstream demand is also weak, resulting in poor transactions. Fortunately, the overall inventory position of styrene is low, and it is expected that the decline in the future may be narrow.

In terms of demand: In the early part of this month, downstream factories of ABS, including the main terminal home appliance industry, showed low stocking enthusiasm, and overall focused on digesting existing inventory. The operation of enterprises tends to maintain production, making it difficult for demand to increase, causing a drag on price trends.

In early November, the overall performance of the upstream three materials of ABS was mixed, and overall support for the cost side of ABS was average. The petrochemical plant has maintained its early stage of operation, and supply pressure continues. Demand side consumption is poor, and merchants are often bearish about the future market. It is expected that the ABS market will struggle to overcome the supply-demand contradiction in the short term, or it will maintain a weak consolidation market.

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