The ABS market in China remained relatively strong in December, with spot prices of various grades increasing. According to the Commodity Market Analysis System of SunSirs, as of December 18th, the average price of ABS sample products was 11,787.5 RMB/ton, with an increase or decrease of 2.61 RMB compared to the beginning of the month.
Supply level: In December, the operating rate of the ABS industry in China remained stable with small fluctuations, and the industry load level had limited changes compared to the beginning of the month. In the early stage, Hengli Petrochemical's AS plant was converted to ABS, and the Tianjin Dagu blowing task ended, gradually returning to production capacity. The overall operating rate of the industry has rebounded by 2% to around 71%, with a narrow increase in weekly average production of 120,000 tons. The inventory of aggregation enterprises has limited changes, with a flat position of 160,000 tons, and the overall pattern of abundant supply of goods remains unchanged. Overall, in mid December, the supply side provided average support for ABS spot prices.
Cost factor: Since December, the upstream three materials of ABS have shown a trend of one increase and two increases, with overall support for ABS costs being average. The domestic acrylonitrile market has maintained a high level of growth, while major factories in East China are operating at low loads, with tight supply remaining unchanged. At the same time, the low inventory position in the industry supports suppliers to continue to raise prices, and the market continues to remain strong.
Recently, the domestic butadiene market has remained stable after rising. The inventory of ports in East China is relatively low, and there is an expectation of tight supply in the spot market. The downstream synthetic rubber futures market has strengthened, once again driving up market sentiment. However, with the continuous rise in prices, downstream receiving capacity has gradually declined. Recently, the atmosphere in the spot market has begun to fade, and the market's upward momentum has weakened, and the market may return to balance.
In mid December, the styrene market fluctuated and consolidated. The performance of upstream crude oil in the far end is still acceptable, with the main focus on consolidating the price of pure benzene as the direct raw material. However, the cost side of styrene has largely exhausted its support for spot prices in the early stage. The changes in domestic industry operating rates are limited, and the situation of tight supply continues. However, in the future, there will be frequent restarts of production capacity, and expectations for a relaxed supply market will be met. At present, there is a lack of further boosting factors in the market, leading to a consolidation of the market.
In terms of demand, the purchasing power in the middle and lower reaches of December is still acceptable. In terms of terminal products, due to the continuous stimulation of the national subsidy policy for household appliances, sales of some terminal products have increased, and enterprise inventory has been digested. Due to the concerns of home appliance exporters about the remote market, some export demand has been pushed forward, the overall load position of factories has rebounded, terminal stocking willingness has strengthened, and procurement operations have increased synchronously. Merchants attempted to increase their offers, but the activity of supply circulation remained high. Overall, the demand side can still provide support to the market.
The ABS market in China is expected to strengthen and consolidate in December. The performance of the upstream three materials is still acceptable, but the comprehensive support for ABS cost side is average. The load of ABS polymerization plant has slightly rebounded, and finished product inventory continues to be digested. On the demand side, the demand is relatively strong, and the market continues to be guided by consumption and remains stable with some strength. However, the increase in demand for household appliances may overdraw future consumption, and businesses have concerns about the post holiday market. Business analysts believe that the uncertainty of ABS's forward trend may constrain short-term gains. After the recent short selling replenishment market is exhausted, the ABS market may return to a narrow consolidation trend.
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