SunSirs: Cost Strengthening and Supply Tightening, China ABS Market was Stable and Rose in January

In January, the domestic ABS market was stable in the first half of the month and rose in the second half, with the increase in spot prices of various brands concentrated in the latter half. According to the Commodity Market Analysis System of SunSirs, as of January 31st, the average price of ABS sample products was 11,037.50 RMB/ton, a decrease of +3.52% from the average price level at the beginning of the month.

In terms of supply: In January, the domestic ABS industry continued to bear the high load at the end of last year. Due to supply pressure, some companies were forced to reduce their load at the beginning of the month. In the second half of the month, some enterprises will undergo maintenance, and the load will continue to decrease, dropping from nearly 70% at the beginning of the month to around 62% at the end of the month. As the operating rate of ABS aggregation enterprises decreases, market supply gradually tightens, and inventory positions are being digested. Although the profit situation of the company did not improve within the month, the pressure on the supply side has improved.

In terms of raw materials: In January, the overall trend of ABS upstream three materials decreased and increased, with the acrylonitrile market consolidating after a decline. Although the price of raw material propylene continued to rise within the month, the cost support for acrylonitrile gradually increased. However, the supply of acrylonitrile is relatively loose, and the market has been buying coldly throughout the month. The pre holiday stocking volume is low, and the market supply is strong and demand is weak. After the price fell to the equilibrium point, it sideways consolidated.

The domestic butadiene market saw a significant increase in January. The foreign market led the rise, boosting the strong performance of domestic supplier prices. The mentality of the merchants is supported, and they are trying to quote higher. In addition, downstream pre holiday replenishment and stocking, as well as improved transaction follow-up, provide support for the market. At the end of the month, the downstream product market did not perform well, and some industries still showed inverted profits. After the butadiene market rose, it returned to consolidation.

The price increase in the styrene market in January was concentrated in the second half of the month. The price of raw material pure benzene has continued to rise due to the rise in crude oil, coupled with an increase in styrene unit maintenance within the month, leading to a contraction in market supply. At the same time, the market transaction is still good, and the price trend continues to be high.

In terms of demand: Within one month, 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. In the second half of the month, as the Spring Festival approaches, downstream enterprises have increased their holiday arrangements, and their procurement operations tend to be weak and meet the demand to maintain production. The midstream ships at high prices, with average spot circulation, and the demand side helps stabilize the market.

In January, the overall performance of the upstream three materials of ABS was relatively strong, which strengthened the support for the cost side of ABS. The petrochemical plant has seen a narrow decline in production, and the supply pressure is gradually decreasing. On the demand side, consumption is average, and merchants are reporting higher due to supply contraction and upstream rise. The market trading may gradually calm down before the February holiday in the future, and it is expected that the ABS market will operate sideways in the short term due to a decrease in market participants.

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