SunSirs: Continuous Supply-Demand Contradiction, China ABS Market was Weak

In mid December, the domestic ABS market continued to experience weak consolidation, with spot prices of various brands fluctuating. According to the Commodity Market Analysis System of SunSirs, as of December 18th, the average price of ABS sample products was 11,050.00 RMB/ton, with a decrease of -0.79% from the average price level at the beginning of the month.

In terms of supply: In mid December, the domestic ABS industry continued to bear the high load from the previous period, with an average operating rate of over 74% recently, which is relatively stable compared to the previous period. The production of the enterprise is stable, and inventory is steadily increasing. In addition, in the early stage, the new equipment and new goods of Ineos Benling continued to expand, leading to further filling of the on-site supply of goods. The company's loss situation continues, with high supply pressure. The supply side's drag on the spot market continues.

In terms of raw materials: In mid December, the trend of ABS upstream three materials was weak, with the acrylonitrile market basically stabilizing. Insufficient repair of raw material prices and average cost support for acrylonitrile; The main downstream construction is still stable, and the negative impact of the increase in load on the acrylonitrile unit has been exhausted. The on-site supply of goods has been tightened, and the on-site quotation is operating steadily.

In mid December, the domestic butadiene market experienced a significant decline. The main production enterprise Sinopec has significantly lowered its ex factory quotation, while the supply is relatively abundant. The main production enterprises in Northeast China are bidding to the outside world at lower prices, which has significantly dragged down the market atmosphere. The main downstream industries have not seen a significant improvement in production, and there is little positive news to boost demand in the short term. The domestic market price of butadiene has sharply declined.

The market price of styrene remained stagnant in mid December. The international oil prices are consolidating at a low level, with upward expectations. Due to its impact, pure benzene has seen a narrow increase, while the cost support for styrene has slightly increased. But the main downstream market is not good, and on exchange trading remains at the off-season level. Merchants are cautious in their quotations, and spot transactions of styrene are average, with limited expected increases.

In terms of demand: In recent times, downstream factories, including the home appliance industry, have shown a sustained lack of enthusiasm for stocking up on ABS's main terminals. The main logic revolves around digesting existing inventory. Enterprises tend to maintain production in their procurement operations, making it difficult to increase demand. Mid stream traders have a heavy wait-and-see attitude and low willingness to purchase goods, resulting in weak demand and dragging down the spot market.

In mid December, the overall performance of ABS upstream materials was poor, and the support for ABS cost was weak. The operation of petrochemical plants has generally maintained its early stage, with continuous increase in interval production and high supply pressure. The demand side consumption is poor, and merchants are often bearish about the future market. How much profit there is on the market, causing the price of ABS to be weak and difficult to improve. The main contradiction between supply and demand in the current market is expected to be difficult to ease in the short term, and the ABS market may have downward momentum. It is recommended to closely monitor the adjustment of supply side production capacity.

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