In late August, the domestic ABS market was weak, with some grades experiencing a drop in spot prices. According to the Commodity Market Analysis System of Shengyi Society, as of August 27th, the average price of ABS sample products was 11850 yuan/ton, a decrease of -1.25% compared to the price level on August 1st.
Fundamental analysis
Supply level: Recently, the domestic ABS industry has experienced high and stable loads, with some enterprises entering maintenance. Last week, the overall operating rate slightly decreased by about 2% to 65% compared to the previous period. The weekly output is about 107000 tons, a decrease of 2500 tons compared to the previous month. The overall shipment situation of manufacturers remains unchanged, with some factory prices lowered and inventory continuing to accumulate. Overall, the current supply side has moderate support for ABS spot prices.
Cost factor: In late August, the overall trend of the three upstream materials of ABS was mainly consolidated, which provided moderate support for the cost side of ABS. Among them, the acrylonitrile market remained stable last weekend, with some spot prices rebounding slightly. Suppliers were reluctant to sell at low prices and tended to prefer contract trading. The positive support for the week mainly comes from the supply side, with the unplanned shutdown of the Jieyang plant in Jihua releasing some external procurement demand. The tightening of supply in southern China has provided support for market sentiment. At the same time, the price of acrylonitrile has reached a historical low range, and there is an intention to buy at the bottom and replenish the market. Coupled with the approaching end of the month, the enthusiasm of middlemen for spot sales is not high, which has pushed up the focus of local negotiations.
In late August, the butadiene market experienced narrow fluctuations, with a slight rebound in market prices, but the magnitude was limited. Last week, some companies in Shandong suspended their export plans, which led to a slight rebound in spot market prices in the region and indirectly affected the slight increase in market quotes in East China. But the downstream market demand has always been lukewarm, providing little support for the market atmosphere. Overall, the butadiene market has shown weak supply and demand in recent times, and it is expected to maintain a stable, moderate, and weak trend in the short term.
In late August, the styrene market prices fluctuated and consolidated. From the above chart, it can be seen that the price of styrene has mainly fluctuated in the past three months, with little recent market volatility. The pure benzene market is consolidating at a low level, with poor cost support. Although the styrene inventory in Jiangsu ports has decreased, the spot demand for styrene is mainly driven by rigid demand, making it difficult to stimulate the market. Recently, the rise in styrene has been weak, and it is expected that there may still be a slight decline in the future market..
In terms of demand: As the end of August approaches, there is still no sign of the peak season market starting for ABS’s main terminal demand. The high temperature holiday for home appliance manufacturers is expected to last until the end of this month, and as a result, the overall load position of downstream factories is relatively low. The recovery of terminal demand is slow, and the stocking operation is mainly based on weak demand. Traders follow the market and the flow of goods is relatively slow. Overall, the demand side is not providing strong support to the market.
Future forecast
The domestic ABS prices in the second half of August are trending towards a softer trend. The weak consolidation of the upstream three materials is the main factor, and the cost support for ABS is average. The load of ABS polymerization plants in the interval is stable with a slight decrease, and the weak and rigid demand situation on the demand side continues. The peak season consumption in the market has not yet started. The social inventory is rising, and the supply-demand contradiction has not eased. Overall, it is expected that the ABS market will maintain a weak consolidation trend in the short term.
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