SunSirs: In June, the Domestic ABS Market in China was Stable with a Slight Increase

In June, the domestic ABS market in China was stable with a slight increase, and the spot price of some brands increased to a reasonable level. According to the commodity market analysis system of SunSirs, as of June 16, the average price of ABS sample products was 10,650 RMB/ton, and the weekly price level rose by +0.83%, and the price level rose by +0.24% compared with the beginning of June.

Fundamental analysis

Supply level: In June, the load of the domestic ABS industry in China was generally stable, and the overall load level basically remained at 64% of the first half of the month. The average weekly output remained at around 120,000 tons, and the inventory position level of the polymerization enterprise was slightly digested, but it was still above 200,000 tons, and the supply on the market remained sufficient. At the same time, the recent Daqing Petrochemical new unit capacity is approaching, and the restart of some enterprises has suppressed the supply support of the industry to a certain extent. On the whole, the long-term loose supply pattern of the ABS market remains unchanged, and the supply side supports the spot price of ABS basically flat.

Cost factors: In mid-June, the three upstream materials of ABS rose and fell, and the support for the cost side of ABS was general. In terms of acrylonitrile, the commissioning plans of Zhenhai Refining and Chemical and Jilin Petrochemical have suppressed the market sentiment. At the same time, the capacity utilization rate of major downstream industries in China has not changed much, and the market supply is strong and demand is weak. The periodic demand in South China has delayed the decline to a certain extent, and the spot price has fallen and then consolidated.

In June, the domestic butadiene market rose first and then fell, and the overall decline was observed. At the beginning of last week, the previous small rise continued, but with the low downstream purchasing intention and lack of demand support, the butadiene market began to decline. Recently, with the weak trend of the downstream synthetic rubber futures market and the maintenance of the equipment, the market expects that the downstream demand will be weak, and the butadiene market has begun to decline due to the lack of downstream support.

Recently, the crude oil of the far-end raw material of styrene has rebounded strongly in the short term. Domestic styrene is greatly affected by crude oil and the price has strengthened. The profit of downstream 3S has been restored, and the demand is still acceptable. However, the restart of styrene units in the future market is concentrated, and the market inventory is high, and the supply pressure may increase. It is expected that the styrene market will fluctuate in the short term.

Demand: In mid-June, the load of ABS downstream factories in the ABS terminal was generally flat. The current market is gradually entering the traditional off-season, and the purchasing logic of terminal enterprises remains rigid demand to fill orders. However, the recent deterioration of geopolitics has pushed up international crude oil, and ABS is supported by remote raw materials. At the same time, the Sino-US talks released macro-positive news, and the sentiment in the market was restored, which led to the covering of some short orders, and the flow rate of goods improved slightly. However, the inventory position in the market is relatively high, the supply continues to be loose, and there is a large space for destocking in the market. On the whole, the demand side in mid-June has limited support for the ABS market.

Market forecast

In June, the domestic ABS market rose. The prices of the three upstream materials rose and fell, the production load of the ABS polymerization plant was flat, and the demand side warmed up slightly. Analysts from SunSirs believe that ABS has been mainly boosted by remote raw materials and macro news in the near future, but the industry's strong supply and weak demand pattern has dragged down the spot price for a long time, and coupled with the consumption off-season, it is expected that the ABS market will be limited in the short term.

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