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SunSirs: Cost Side Weakens, China ABS Market Continues Shock Callback

January 14 2021 10:54:42     SunSirs (Selena)

According to the data of SunSirs, China domestic ABS market was weak and volatile in early January, and the spot prices of various brands were down. As of January 12, the mainstream offer price of general ABS was about 15,450 RMB/ ton, down 1.90% from the average price level in early January.

ABS upstream Styrene Market finishing up slightly. In the first ten days of this year, the international crude oil price went up, the pure benzene was benefited, the external ethylene rose, the spot offer was strengthened, and the styrene cost support surface was strengthened. In January, the inventory of northern styrene enterprises decreased, the impact on East China arbitrage weakened, the price of production enterprises rose again, the cost support and some downstream market replenishment transactions supported the market to open higher. It is expected that there is still space for price rise of styrene in the short term.

Butadiene market continued to be weak in the near future, with a large decline. According to the monitoring of SunSirs, as of January 12, the average price of the sample data was 7,170 RMB/ ton, down 7.50% from the average price at the beginning of the month. With the gradual release of production after the restart of some domestic units, the market supply side has increased significantly. In addition, the external price has been declining and the supply pressure is still there. In the first ten days of January, the butadiene market was obviously weak due to the supply side drag. At present, the supply price of Sinopec, the main producer, continues to decline, and the market confidence is weak, generally bearish. Short term domestic butadiene market may be difficult to improve.

In the first ten days of January, China domestic ABS market continued its downward trend, the upstream butadiene fell a lot, and the cost support weakened. The domestic ABS supply is relatively stable, and the spot stock begins to decrease. The current time point is close to the Spring Festival, and the medium and long-term demand is empty. The market atmosphere is not strong, and the transaction price is low. However, recently, downstream factories have been buying at bargain hunting, and there are stock operations before the festival, which, to a certain extent, banefit the market price.

SunSirs analysts believe that: in early January, the ABS market was weak, and the prices of various brands fell. The overall ABS cost side is bad, and the cost side support is weakened. At present, in addition to the individual terminal stock hot brands in short supply, ABS spot supply is relatively sufficient. The market is about to turn into the off-season because of Spring Festival holiday, and it is expected that China domestic ABS price will continue to decline in the near future.


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