At the beginning of November, the domestic ABS market remained stable with small movements, and the fluctuation range of spot prices for various grades was relatively narrow. According to the Commodity Market Analysis System of Shengyi Society, as of November 6th, the average price of ABS sample products was 11500 yuan/ton, basically returning to last week’s price level.
Fundamental analysis
Supply level: In early November, the operating rate of the domestic ABS industry continued to rise, and the load level continued to increase. Following the resumption of work at the Huajin and Tianjin Dagu facilities in late October, the load of Tianjin Dagu and Jilin Petrochemical also increased last week, and the industry’s operating rate rose by 2% to nearly 69%. Recently, the overall production of goods has exceeded the digestion pattern, with a weekly output of over 110000 tons and inventory levels remaining at a high level of over 190000 tons. Overall, in early November, the supply side’s support for ABS spot prices improved and declined.
Cost factor: Recently, the three upstream materials of ABS have shown mixed trends, with overall support for ABS costs being average. The acrylonitrile market saw a slight increase. Last week, the No.1 acrylonitrile unit of Zhejiang Petrochemical entered maintenance, resulting in a decrease in production capacity utilization rate in the East China region and a tightening of supply. At the same time, the price constraint is formed by the supply gap between the north and south of China, and the domestic acrylonitrile market is expected to remain strong.
In early November, the domestic butadiene market continued to decline. Due to the continued loose market supply, the confidence of holders has been dragged down, and there has been an increase in discount orders. The profit transfer in downstream markets is limited, and the bottoming out effect of consumer power is average. In the short term, the concentration of imported goods at the port, coupled with the decline in foreign prices, has jointly impacted the spot market prices. The current bearish guidance in the spot market makes it difficult to be optimistic about the future market.
Last week, the styrene market fluctuated and rose. The performance of crude oil in the far end of the range has rebounded, but the supply of pure benzene as the direct raw material has remained loose, and the cost support of styrene is average. On the supply side, the support for the spot market is still acceptable due to the low inventory levels in various ports and the low industry load. However, businesses are concerned about the impact of the off-season on consumption, and although there are many inquiries in the market, actual orders tend to be cautious.
In terms of demand, the main terminal demand for ABS remained weak in early November. With the traditional peak season of stocking up during the previous “Golden September and Silver October” coming to an end, the mentality of consumers has fallen to a low point. Entering this month, there is still a strong wait-and-see sentiment in the venue. The overall load position of downstream home appliances and other factories has limited recovery, and the willingness of terminal stocking is not strong. Purchasing operations are mainly based on weak demand to maintain production. Merchants have insufficient willingness to establish warehouses, and their offers are subject to market conditions, resulting in a slowdown in the flow of goods. Overall, the demand side is not providing strong support to the market.
Future forecast
At the beginning of November, the domestic ABS market remained weak and organized. Upstream three materials showed mixed ups and downs, providing average comprehensive support for ABS cost side. The load of ABS polymerization plant continues to rise slightly, and the inventory of finished products remains high. The weak demand on the demand side is difficult to change, and market trading is sluggish. The mismatch between supply and demand within the venue has not been effectively improved. It is expected that the ABS market will mainly operate weakly in the short term in the future.
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