Recently, the domestic ABS market has been stable with some weakness, and spot prices of various grades have fluctuated. According to the Commodity Market Analysis System of Shengyi Society, as of October 30th, the average price of ABS sample products was 11500 yuan/ton, an increase or decrease of -0.11% compared to the price level on October 1st.
Fundamental analysis
Supply level: At the end of October, the load level of the domestic ABS industry slightly increased. Recently, some maintenance facilities in northern Huajin and Tianjin Dagu have resumed work, and the industry’s operating rate has increased by 5% to nearly 67%. The overall amount of goods produced on-site is slightly more than digested. The supply remains at a sufficient level, and the macroeconomic atmosphere in the early stage has stimulated some short positions. The current situation is basically exhausted, and the effect of destocking is limited. Currently, the inventory position remains at a high level of over 180000 tons. Overall, the current supply side’s support for ABS spot prices has weakened.
Cost factor: During late October, the upstream three materials of ABS showed two increases and one flat trend, which eased the drag on the cost side of ABS. The acrylonitrile market continues to rise. Some regions experienced a contraction in spot supply within the next ten days, prompting producers to raise prices accordingly. At the same time, the overall inventory position of the industry is moderate, providing ample room for the market to rise. The increase in operating rates of downstream products has also raised demand expectations, and it is expected that the acrylonitrile market will continue to rise.
Recently, the domestic butadiene market has been consolidating sideways, and the good news of replenishing inventory after the holiday has been completely digested. At the same time, the industry’s production has increased and supply has increased, resulting in a decrease in supply and demand, and the market is under pressure. However, as downstream markets such as synthetic rubber shift profits from butadiene, consumer power also builds a bottom for the butadiene market. The current spot market is balanced by long and short positions, with prices generally stable and fluctuating slightly.
Recently, the styrene market has continued to rise. The current basis continues to strengthen, and monthly negotiations are mainly focused on exchanges. Styrene inventory has decreased in Jiangsu ports and in South China ports. Combined with last week’s decline in industry operating rates, the styrene market has shifted from a decline to an increase. There are many inquiries in the current market, and actual orders are cautious. It is expected that the styrene market will slightly strengthen and consolidate in the short term.
In terms of demand: At the end of October, the main terminal demand for ABS has not yet shown the peak season level. With the decline of stocking up and short selling after the beginning of the month, the market has returned to the off-season trend, and there is a strong wait-and-see sentiment. The high-temperature holiday for home appliance manufacturers has basically ended, but the overall load position of downstream factories is slowly recovering. The recovery of terminal demand is slow, and stocking operations are mainly based on weak demand to maintain production. Traders lack confidence in the future market, their willingness to build warehouses decreases, and their offers are subject to market conditions, resulting in a slower flow of goods. Overall, the demand side is not providing strong support to the market.
Future forecast
At the end of October, the domestic ABS prices showed weak consolidation. Upstream three materials saw two increases and one leveling off, providing comprehensive support for the cost side of ABS to stabilize. The load of ABS polymerization plant has slightly increased, while the high inventory of finished products remains unchanged. The weak demand on the demand side is difficult to change, and market trading is weak. The mismatch between supply and demand within the venue has not been effectively improved. It is expected that the ABS market will mainly operate weakly in the short term in the future.
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