Recently, the domestic ABS market has experienced a downturn, with spot prices of various grades falling. According to the Commodity Market Analysis System of SunSirs, as of October 18th, the average price of ABS sample products was 11,625 RMB/ton, an increase or decrease of +0.98% compared to the price level on October 1st.
Supply level: In mid October, the load level of the domestic ABS industry remained flat. At the beginning of the month, some devices underwent maintenance, and the industry's operating rate dropped to around 61%. Since then, it has been running smoothly. During this period, the overall production and digestion of goods on site were roughly balanced. The supply remains at a sufficient level, with high inventory levels and minimal changes. At the beginning of the month, the macroeconomic atmosphere supported the release of partial short positions, but from the results, this positive news did not significantly reduce inventory. Overall, the current supply side has moderate support for ABS spot prices.
Cost factor: During the mid month of October, the overall trend of ABS upstream materials was weak, which had a poor support effect on the cost side of ABS. The consolidation of acrylonitrile market is the main focus. Although the market expects limited supply growth in October, downstream companies generally have sufficient inventory and the operating load of equipment has not met expectations, resulting in limited overall demand growth. The weak demand in the market makes it difficult for the trading center to rebound.
Recently, the domestic butadiene market has continued to decline. Although there has been some demand for replenishment after the holiday, which has boosted the market, the downstream synthetic rubber market has weakened, dragging down market purchasing sentiment and lacking demand support. The spot market sentiment is weak, and prices have generally declined. On the supply side, some shipments from the East China region arrived at the port this week, and there are expectations of loose supply in the market. Downstream pressure on prices is gradually rising, and the overall market atmosphere is weak.
The recent decline in the styrene market continues. Recently, remote crude oil has shown weak performance, coupled with loose supply of direct raw material pure benzene and poor cost support for styrene. The supply side is relatively abundant due to the arrival of cargo at the port and stable industry load, while domestic demand is relatively stable and new orders are average. The bullish trend in the market is difficult to materialize, and there may still be room for decline in the future market of styrene.
In terms of demand: In mid October, the main terminal demand for ABS has not yet shown the peak season level. The support of macroeconomic and policy factors in the early stage stimulated the market to fill short positions, but with the disappearance of the short position rush, the market has returned to the off-season trend, and there is a strong wait-and-see sentiment. Although the high-temperature holiday for home appliance manufacturers has ended, 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
In October, the price of ABS in China stopped rising and fell. The weak operation of the upstream three materials has provided poor comprehensive support for the cost side of ABS. The ABS polymerization plant is running smoothly, and the high inventory of finished products is being slightly digested. The situation of weak and rigid demand on the demand side has returned, and market trading is weak. The mismatch between supply and demand within the venue has not been effectively improved. Affected by multiple bearish factors, it is expected that the ABS market will mainly operate weakly in the short term in the future.
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