SunSirs: Cost Strengthening & Supply Tightening, China ABS Prices Continue to Rise

Last week, the domestic ABS market continued to rise, with many spot prices of different brands increasing. According to the Commodity Market Analysis System of SunSirs, as of January 26th, the average price of ABS sample products was 10,862.50 RMB/ton, a +1.88% increase or decrease from the average price level at the beginning of the month

In terms of supply: In the early stage, the domestic ABS industry saw a high level of load reduction. Last week, some enterprises underwent maintenance, and the load continued to decrease. Recently, the operating rate of ABS aggregation enterprises has been lowered to around 62%, resulting in a decrease in weekly production and a decrease in inventory positions. Although the profit situation of the enterprise has not improved, there has been some improvement in supply side pressure.

In terms of raw materials, the recent trend of ABS upstream three materials is still good, with the acrylonitrile market mainly consolidating. The price of propylene, the raw material, continues to rise, providing sufficient support for the cost of acrylonitrile. In the early stage, the supply of acrylonitrile was relatively loose, and the current market is buying coldly. The pre holiday stocking volume is average, and the market is balanced between long and short positions, with prices mainly being sideways.

Last week, the domestic butadiene market remained stable and relatively strong. Recently, the prices of foreign and domestic suppliers have shown strong performance, supporting the mentality of merchants to offer. In addition, as the holiday approaches, downstream companies are gradually restocking and stocking up before the holiday, and transactions have followed up, which has boosted the market. However, the downstream product market is not performing well, with some industries still showing inverted profits. The butadiene market is mainly consolidating and observing.

Last week, the market price of styrene rose. The price of raw material pure benzene continues to rise, with strong cost support. The increase in maintenance of styrene units has led to a contraction in market supply. The transaction in the market is still good, and the market continues to rise.

In terms of demand: Last week, the main ABS terminals, including downstream factories in the home appliance industry, showed average stocking enthusiasm. The main logic revolved around buying in demand and digesting inventory. As the holiday approaches, downstream enterprises have increased their holiday arrangements, and their procurement operations tend to be weak and in need of maintaining production. The midstream ships at high prices, with average spot circulation, and the demand side helps stabilize the market.

Recently, the overall performance of ABS upstream materials has been relatively strong, providing increased support for the cost side of ABS. The petrochemical plant has seen a narrow decline in production, further reducing supply pressure. On the demand side, consumption is average, and merchants are reporting higher due to supply contraction and upstream rise. The trading in the future market may gradually weaken, but it is expected that the ABS market will be stronger in the short term due to various positive factors.

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