SunSirs: Negative Fundamentals, Continued Weakness in China ABS Market in mid November

In mid November, the domestic ABS market continued to exhibit a negative pattern, with spot prices of various brands generally decreasing. According to the Commodity Market Analysis System of SunSirs, as of November 20th, the average price of ABS sample products was 11,062 RMB/ton, an increase or decrease of -0.56% 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. As of the 20th, the domestic operating rate has increased by about 3% to 75% compared to the previous ten days. The production of the enterprise is stable, and Ineos Benzene has a new device put into operation. The total production is increasing in the middle of the year, and the inventory position is on the high side. 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 mid November, the three upstream ABS materials showed mixed ups and downs, with the acrylonitrile market showing a sideways trend after rising. Although the demand level is average, the expansion of domestic production capacity losses in the early stage, coupled with the delayed resumption of some devices, has reduced market supply and strengthened supply side support. Acrylonitrile Lido guidance still exists, and the price is firm.

Recently, the domestic butadiene market has been mainly flat. In the northern region, there is equipment maintenance, and port inventory has slightly decreased. There is some support for spot supply, and the performance of merchants' quotations is strong. The external market performance is weak, and the downstream product market performance is weak. The fundamentals of the future market lack positive support, and it is expected that the domestic butadiene market may turn weak.

The styrene market price fluctuated in mid November. The international crude oil price continues to weaken, and the rise of pure benzene market is hindered. While cost support has not been realized, downstream demand is also not strong. However, the overall inventory position of styrene is still at a low level, and it is expected that the decline in the future market may fluctuate slightly.

In terms of demand: In the middle of this month, downstream factories of ABS, including the main terminal home appliance industry, have low stocking enthusiasm, and overall focus is 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 mid 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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