At the end of March, the domestic ABS market continued to trend weakly, with most spot prices of various grades falling. According to the Commodity Market Analysis System of Shengyi Society, as of March 24th, the average price of ABS sample products was 11337.5 yuan/ton, with a price level increase or decrease of -2.89% compared to the beginning of the month.
| Gamma-PGA (gamma polyglutamic acid) |
Fundamental analysis
Supply level: As we enter late March, the operating rate of the domestic ABS industry has shown significant fluctuations, with overall load slightly decreasing by 2% to around 71% compared to mid March. The average weekly production remains at a super high level of 120000 tons, and the inventory level of aggregation enterprises is at a high level of over 190000 tons, indicating that the supply of goods is still very abundant. There has been no improvement in petrochemical plant orders, and traders are lagging behind in terms of goods delivery. Actual orders continue to yield profits, and there are more occurrences of orders being shipped. Overall, the supply side has poor support for ABS spot prices during the ten day period.
Cost factor: In late March, there was no improvement in the trend of ABS upstream materials, and the support for ABS cost side was average. At present, the supply-demand contradiction in acrylonitrile has not eased, and over 80% of the industry’s high load has resulted in abundant supply on site. After the early decline, it has fallen to the theoretical production cost line, and the entry of terminal procurement at low prices has gradually strengthened its role in supporting the price of acrylonitrile. The market has hit the bottom temporarily, and the downward trend has slowed down. The acrylonitrile market is expected to remain stagnant and consolidate in the future.
At the end of March, the butadiene market was mainly consolidating horizontally. In the first half of the month, the on-site transactions were weak, and the market momentum was not good. However, the downstream synthetic rubber futures market has improved, coupled with the increasing number of mainstream enterprises in the East China region facing temporary shutdowns. Under long short hedging, some merchants have attempted to raise prices. The current atmosphere in the spot market is calm, and market prices may consolidate.
The weak operation of styrene was the main trend at the end of March. There are many imported sources of pure benzene raw materials, and the shipments of Shandong’s local refining enterprises have fallen short of expectations. At the same time, there has been an increase in downstream maintenance, and downstream demand for gas is average. Holders of goods are actively shipping, and prices continue to fall, dragging down the styrene market. However, the subsequent maintenance of styrene is increasing, and the supply is expected to tighten. Downstream demand support is essential, and profits have slightly recovered. It is expected that the short-term market will mainly focus on narrow consolidation and operation.
On the demand side: The terminal side continues the previous flat pattern, and downstream buying is still lagging behind at the end of March. The load of terminal factories is generally flat, and the purchasing logic tends to be weak in demand and bottom fishing. The atmosphere of on-site purchasing is sluggish, and the flow of goods is slow. Overall, the demand side has weak support for the ABS market.
Future forecast
At the end of March, the domestic ABS market fluctuated and fell. The performance of the upstream three materials is poor, and the comprehensive support for ABS cost is weak. The load of the ABS polymerization plant remains stable with a slight decrease, while the inventory level remains high. Weak consumption on the demand side and insufficient procurement by downstream enterprises. Business analysts believe that the ABS market will have strong supply and weak demand in the long term, and it is difficult to find any positive results. In the short term, the market will still be dominated by weak consolidation.
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