SunSirs: Combination of Negative Factors, China ABS Market Continued to Decline in the first Half of April

In the first half of April, the domestic ABS market continued to decline, with most spot prices of various grades decreasing. According to the Commodity Market Analysis System of SunSirs, as of April 14th, the average price of ABS sample products was 11,112.50 RMB/ton, with a price level increase or decrease of -1.22% compared to the beginning of the month.

Supply level: As we enter April, the operating rate of the domestic ABS industry has decreased slightly, and the overall load has decreased by 5% to around 68% compared to the end of March, before stabilizing until mid month. The weekly average production has returned to below 130,000 tons, but it is still at a relatively high level. The inventory level of aggregation enterprises is above 190,000 tons, standing guard at a high level. In addition, the industry's short-term maintenance plan is relatively small, and the on-site supply is very abundant. Overall, there has been no improvement in the supply side's support for ABS spot prices.

Cost factor: In the first half of April, the upstream three materials of ABS showed signs of fatigue, which did not provide good support for the cost side of ABS. At the beginning of the month, some units in the East China and Shandong regions reduced their load or underwent maintenance, resulting in a periodic decrease in supply of acrylonitrile. Partial relief of industry inventory pressure. Thus providing market conditions for price increases. But around mid month, the acrylonitrile unit of Yulong Petrochemical was put into operation and discharged, which hindered the upward trend of the domestic acrylonitrile market. However, there may be a phased weakening trend on the consumer side, and the market as a whole is cautiously observing.

The domestic butadiene market has recently experienced a significant decline. Under the influence of international news such as equivalent tariffs, the crude oil and synthetic rubber futures markets have fallen sharply this cycle, and the cost and demand sides have had a significant impact on the butadiene market, dragging down the mentality of the spot market. The port arrival situation on the supply side is good, but the overall supply of butadiene is relatively loose. Overall, it is expected that stable to weak operations will be the main trend in the short term.

Recently, styrene has also been affected by international news such as equivalent tariffs, and the market has fallen in the first half of the month. On the cost side, pure benzene is experiencing a wide downward trend, while on the demand side, downstream 3S is dragged down by inventory, factories are reducing their burden, and demand side support is weakening. However, recently styrene has gradually entered the peak season for maintenance and supply tightening expectations. As of press time, styrene has stopped falling and stabilized. However, due to cost constraints, the rebound is hindered, and it is expected that there will still be a risk of decline for styrene in the future market.

On the demand side: In the first half of April, the load of ABS downstream factories in the ABS terminal side was generally flat, and the purchasing logic tended to buy at the bottom and supplement orders for urgent needs. The atmosphere of on-site purchasing was more cautious. With the exhaustion of initial demand orders at the beginning of the month, on-site trading has noticeably weakened, and the flow of goods has returned slowly. Overall, the demand side has poor support for the ABS market.

Future forecast

In the first half of April, the domestic ABS market almost fell across the board. The upstream three materials are weakly moving, which provides poor comprehensive support for the cost side of ABS. The load of the ABS polymerization plant remains stable with little fluctuation, and there has been no improvement in demand side consumption. Business analysts believe that although ABS has fallen to near cost price, the market will have strong supply and weak demand in the long term. Under the influence of international news such as equivalent tariffs, there is a heavy emphasis on pessimistic expectations for the future market, and it is difficult to find good news. In the short term, the market still cannot rule out the possibility of further decline.

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