SunSirs: Poor Market Dynamics, China ABS Market Runs Weak

Recently, the domestic ABS market has continued to be weak, with spot prices of various brands fluctuating. According to the Commodity Market Analysis System of SunSirs, as of December 25th, the average price of ABS sample products was 10,662.5 RMB/ton, with a decrease of -4.26% from the average price level at the beginning of the month.

In terms of supply: In the early stage, the domestic ABS industry had a high load, but recently, due to supply pressure, some enterprises have seen a decrease in load. But the decline in average operating rate is narrow, and the current industry load is still above 73%. The production of the enterprise is relatively stable, and the inventory position has decreased due to some new contracts. The improvement of the company's loss situation is limited, and the supply pressure is relatively high. The supply side's drag on the spot market continues.

In terms of raw materials, the recent trend of ABS upstream three materials is still good, with the acrylonitrile market basically stabilizing. The price of raw materials remains stable with minor fluctuations, and the cost support for acrylonitrile is average; The main downstream construction is still stable, and the load of the acrylonitrile unit is horizontal. The on-site quotation is running smoothly.

After the recent decline in the domestic butadiene market, it has been consolidating and fluctuating. As the price of butadiene drops to a relatively low level, some downstream orders are buying on dips, and the overall market focus has shifted upwards. It is expected that the butadiene market will tend to be strong in the short term, with consolidation being the main trend.

Recently, the price of styrene in the market has risen and remained sideways. The current international shipping capacity is declining, and due to its impact, various bulk commodities upstream of styrene are strengthening, with increased cost support. In addition, due to the depletion of on-site supply in the early stage, the current spot situation is tight, and the downstream market is still acceptable. The merchant's offer is firm.

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.

Last week, the overall performance of the upstream three materials of ABS was still good, and the support for the cost side of ABS rebounded. The petrochemical plant has experienced a narrow decline in production, with limited improvement in supply pressure. The demand side consumption is poor, and merchants have weak confidence in the future market. The easing of the main contradiction between supply and demand in the market is not obvious, and the ABS market may still have downward momentum. It is recommended to closely monitor the adjustment of supply side production capacity.

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