SunSirs: Demand Slow Down, China ABS Market is weakly Stable in Mid February 2025

In mid February, the domestic ABS market consolidation was weak, and the spot prices of some grades were narrowly lowered. According to the Commodity Market Analysis System of SunSirs, as of February 18th, the average price of ABS sample products was 11,862.50 RMB/ton, with a price level increase or decrease of -0.11% compared to the beginning of the month.

Supply level: In mid February, there was limited change in the operating rate of the domestic ABS industry, and the load decreased by about 1% to 72% compared to the first ten days. The average weekly production within ten days is close to 130,000 tons, and the inventory level of aggregation enterprises has risen to over 180,000 tons. The overall pattern of abundant supply of goods remains unchanged. The post holiday orders of petrochemical plants are poor, and traders are lagging behind in terms of goods delivery, resulting in a rebound in the early month's price increase. Under the pressure of balancing costs, some production enterprises have plans to reduce their burden. Overall, the recent supply side has provided poor support for ABS spot prices.

Cost factor: Since mid February, the trend of ABS upstream materials has been stable with some weakness, and overall support for ABS costs has been average. The domestic acrylonitrile market is stagnant and declining. Although the low load situation in the industry continued in the early stage, with the spread of expected news of expanding supply in the future and the impact of new production capacity, the positive news on the supply side is gradually being digested. Fortunately, the inventory level in the industry is still low, and the price drop is relatively narrow. But downstream buying sentiment has weakened, and the overall market outlook may turn bearish in the future.

The butadiene market has loosened at a high level. Although the spot market continues the previous tight pattern, with the expected increase in industry load, supply will inevitably move towards abundance. In addition, due to the high spot prices in the early stage, downstream buyers have become increasingly resistant to receiving goods at high levels, resulting in a slight lack of market momentum and a stalemate between supply and demand sides. It is expected that butadiene may continue its weak consolidation trend.

In mid February, the styrene market was mainly characterized by sideways consolidation. The load of the styrene plant stabilized within ten days, while the market supply and demand remained basically stable. Upstream pure benzene is difficult to utilize in remote oil due to the easing of geopolitical relations, with prices stagnating at high levels and narrowly declining. The fundamental guidance of styrene is ambiguous, and it may continue to be organized and operated.

In terms of demand, the export demand for some front-end household appliances in the terminal sector has been fully released before the holiday, and downstream purchasing power has significantly weakened compared to the end of the lunar calendar after the holiday. The current resumption process of terminal factories is lagging behind, and the overall load position is slowly recovering. In addition, terminal enterprises still have inventory to digest, and the atmosphere of on-site purchasing is sluggish. Overall, the demand side has a slower pace in providing market support.

Future forecast

In mid February, the domestic ABS market remained stable with slight weakness. The weak and stable consolidation of the upstream three materials provides average comprehensive support for the cost side of ABS. The load variation of ABS polymerization plant is relatively small, and the inventory accumulation level remains unchanged. In the future, aggregation enterprises have plans to reduce their burden, and the pressure on the supply side may gradually decrease. The demand side expansion is still insufficient, and some downstream enterprises are slow to return to production. Business analysts believe that the ABS market has weak supply and demand, and in the short term, the market will continue to be dominated by weak and stable consolidation.

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