In early July, the domestic ABS market saw an increase at a low level, with some brands experiencing a narrow increase in spot prices. According to the Commodity Market Analysis System of SunSirs, as of July 10th, the average price of ABS sample products was 11,850 RMB/ton, a decrease of +0.21% from the price level on July 1st.
Supply level: At the beginning of this month, the domestic ABS industry's load was roughly 70% of the operating level at the end of last month. Within ten days, companies such as North Huajin and LG Yongxing will undergo varying degrees of maintenance and load reduction. However, due to the improvement in profitability and increased production in early June, the overall supply on site was abundant. Manufacturers tend to output confidence in their operations, resulting in a slight increase in product pricing. Merchants are offering price differentials and slightly increasing shipments. The overall inventory of the industry has been digested, and there is a speculative atmosphere in the market regarding the contraction of future supply. Overall, the supply side has increased its support for ABS spot prices.
Cost factor: In early July, the upstream three material trend of ABS may rise or fall, providing sufficient support for the cost side of ABS. The domestic market for acrylonitrile remains stagnant at a low level. The upstream raw material propylene market is fluctuating and consolidating, with average cost support. Downstream demand continues to be weak. With sufficient supply of goods on site and low profits. Acrylonitrile factories have a clear willingness to raise prices, and the focus of market transactions has limited changes. Most operators maintain the previous quotation as the main focus, and still maintain a cautious attitude towards the future market.
Recently, the domestic butadiene market has been on the rise, mainly due to the tight supply of goods in Shandong region, which has boosted the demand. Holders have a strong willingness to hold up prices. As prices rise, it becomes more difficult to shift profits downstream and the enthusiasm for entering the market weakens. The trading atmosphere on the exchange has cooled down to some extent, forming a generally sideways trend after the rise.
In early July, the market price of styrene slightly increased. The dominant factor is the significant digestion of styrene storage, while the low load of the unit leads to an expectation of further decrease in supply. Currently, styrene trading is active and the market momentum is good.
In terms of demand: Entering July, the main terminal demand for ABS is weak. Some home appliance manufacturers have closed down during the holiday, and the overall load position of downstream factories is low, with weak stocking operations and strong demand. Last week, traders were sheltered by producers and sold at high prices. The current market momentum has returned to calm, and the speed of goods circulation has slowed down. Overall, the demand side has not provided good market support.
In early July, domestic ABS prices showed a narrow range of upward movement. The overall increase in upstream three materials is relatively small, and the cost support for ABS is generally strong and stable. The ABS polymerization plant is operating steadily with a slight decline, and there is ample supply of goods on site. There is an expectation of a slight contraction in future supply, but based on the overall production capacity loss, the changes in supply pressure may be limited. The demand side has weak demand, and the market trend is showing in the off-season, with weak trading. In summary, it is expected that the ABS market will maintain a consolidation trend in the short term.
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