In the first half of May, the domestic ABS market experienced a high decline, with most brands experiencing a decrease in spot prices. According to the Commodity Market Analysis System of Business Society, as of May 14th, the average price of ABS sample products was 12375 yuan/ton, a decrease of -0.80% from the price level on May 1st.
| Gamma-PGA (gamma polyglutamic acid) |
Fundamental analysis
Supply level: At the beginning of this month, the domestic ABS industry took on a low load pattern in the early stage. After a four month upward trend, the price of ABS has risen to a high level, and the profitability of aggregation enterprises has improved. In the first half of May, there were operations to increase load and expand profits, and the average operating rate of domestic ABS enterprises increased by nearly 10% to over 62%. The production has increased synchronously, and the supply of goods on site has also increased accordingly. And there are still expectations for improvement in the future, with supply side support for ABS spot gradually weakening.
Cost factor: In the past half month, the trend of ABS upstream three materials has generally turned downward. Although acrylonitrile has the advantage of rising raw material prices, the concentrated resumption of maintenance equipment has a relatively negative impact on the acrylonitrile market overall. The current spot prices are fluctuating and falling, and it is expected that the acrylonitrile market may continue to be weak.
Recently, the domestic butadiene market has remained stable with some declines. Downstream follow-up is required after the holiday, and the pressure from suppliers is not significant. However, the external market prices have weakened, and the news of low-priced transactions has stimulated the domestic market. Buyers have a lower intention to inquire about prices, and the mentality of merchants is gradually weakening. The market supply and demand are deadlocked, and it is expected that the butadiene market may be weak and consolidate.
Since May, the styrene market has continued to decline. International oil prices fluctuate in the interval, with poor cost support. The spot demand is mainly for rigid demand, while the price of styrene was previously high. Downstream resistance to high-end offers has emerged, and it is expected that styrene will mainly fluctuate and decline in the future.
In terms of demand: The main terminal demand for ABS has remained stable with a slight decrease, and the overall load of downstream factories has remained generally stable. The stocking operation is mainly focused on buying in demand. Traders are flexible in their orders, leading to an increase in low-end market offers and a decrease in the speed of goods circulation. The market momentum has weakened, and the demand side has weakened its support for the market.
Future Market Forecast
In the first half of May, domestic ABS prices fluctuated and fell. From a fundamental perspective, the center of gravity of the upstream three materials of ABS is falling, which weakens the cost support for ABS. The construction of ABS polymerization plant has significantly increased, and supply pressure is gradually increasing. The demand side’s demand logic remains unchanged, and the support for spot goods is mediocre. In summary, it is expected that the ABS market may experience a weak downward trend in the short term.
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