The year 2020 will be a special year, and the rubber and plastic industry is no exception. As a representative rubber and plastic product with large output and strong demand, the challenges and opportunities in this year’s market naturally attract attention from both inside and outside the industry. According to the monitoring data of business agency, in 2020, the domestic ABS market will first restrain and then rise, and the price will increase by 24% at the end of the year compared with the beginning of the year. Several inflection point market point full load, the business agency takes you one by one inventory and analysis.
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Cause analysis
In the first quarter, just at the beginning of the epidemic, the shutdown had a wide impact on the industrial chain. ABS upstream three material market is all depressed, styrene market is affected by the bad news of crude oil chemical industry, domestic styrene price fell accordingly, and directly reflected in the end of the quarter, the weak trend of cost side, dragging down the price of styrene. Foreign panic increased, external market prices fell sharply. The regional price gap is widening, there is room for arbitrage, and there are some hedging operations in China, which aggravates the pressure on the basis of weak market conditions. Acrylonitrile was also affected by the negative news of crude oil chemical industry, and there were new production capacity after the resumption of work, with obvious negative effects in the field. There is a situation of load drop and demand shrinkage in the downstream. Butadiene market also had a big decline, the market lack of new orders to follow up. The spot supply of external disk and tank farm is abundant, and even some enterprises’ products are exported. The high inventory of rubber industry, the high inventory of synthetic rubber industry at the middle end of the industrial chain is under pressure, and the spread of low-price transaction news in the domestic market has dragged down the overall butadiene market. Upstream overall negative ABS cost side, after the Spring Festival holiday, spot prices opened a downward channel. Market bearish factors dominated, and the peripheral news is short, ABS fell all the way to the end of March.
One belt and one helmet
The turning point of the market appeared in April, and the effectiveness of epidemic prevention LED production and life. Although the upstream three material support ambiguous cost, but somehow has stopped falling and stabilized. ABS returns to normal law of supply and demand price, but downstream factories still have considerable inventory to digest. What broke the deadlock was the “helmet fever” that began at the end of April. The security guard action of “one helmet and one belt” deployed by the traffic control bureau of the Ministry of public security has activated the potential consumption of helmets. The prices of helmets on e-commerce platforms have doubled, and the prices of some businesses have even increased by 500%, accompanied by the phenomenon of being reluctant to sell them. According to the survey by ABS Data Engineer of business club, there may be more than 200 million helmets in the society at that time, and the market scale is close to 10 billion. Netizens jokingly call helmets the inheritors of “meltblown cloth phenomenon”. ABS, as the main material of helmet outer layer, has a rapid growth. In May, the operating rate of ABS petrochemical plant in China was almost full load operation, and the industry operating rate was nearly 98%. For a time, the atmosphere of speculation rose everywhere, and the spot price rose by more than one third. It was not until June and July that the ABS rally slowed down, but it did not mean that the market was out of the blue. Business agencies believe that the continued supply shortage pattern in the second half of the year is inseparable from the outbreak of ABS demand in the second quarter.
In August, after more than a month of consolidation of the market, ABS spot shortage pattern not only did not improve, but intensified. In addition, the rebound of overseas epidemic situation led to the decrease of import goods arrival in Hong Kong, and the production of some polymerization plants was hindered by extreme weather. Although the operating rate of ABS petrochemical plant in China remains at a high level, the supply situation is tightened by multiple factors. So that the low inventory of ABS more and more supply, market prices rose. The resistance of merchants to ship is reduced, and the low price order is reduced. And the strong market into the traditional peak season, “gold nine silver ten.”.
Extended season
This year’s traditional peak season performance can be described as standard and satisfactory. Before the double festival, there was a tide of goods preparation, and after the festival, the downstream goods were still more active. Terminal demand, ABS peak season is very prosperous. In particular, the consumption of major domestic appliance enterprises and the automobile industry has remained at a high level, aggravating the tense situation of market supply. Although the lower reaches are resistant to high price goods, the demand side is stable, and the “golden nine silver ten” in 2020 can also be upgraded to an extended version. With the long-term rise of ABS, the cost pressure of downstream factories gradually increases at the end of the year. At present, the downstream purchasing operation is more resistant to high price goods. Business offers steady but the situation of the decline is frequent, the price center of gravity height is cut alternately by the clear and the dark.
Year end overview
ABS analyst of business agency thinks: in 2020, ABS can increase so much under the increasingly fierce competition of domestic polymerization plants. Of course, the main force is not the demand side. Whether it is the demand of “helmet fever” or the steady consumption of household appliances, automobiles and other industries, all reflect the mutual achievements of ABS industry chain, and the positive development of ABS and even rubber and plastic industry in China in 2020. The business agency thinks that the ABS industry is developing well this year and the market can be expected in 2021.
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