SunSirs: Cost and Demand Weakened in June, China ABS Market Weakened

https://www.chemnet.com   Jul 02,2024 SunSirs

In June, the domestic ABS market fluctuated and fell, with most brands having lower spot prices. According to the Commodity Market Analysis System of SunSirs, as of June 30th, the average price of ABS sample products was 11,825 RMB/ton, a decrease of -2.67% from the price level on June 1st.

Supply level: At the beginning of this month, the domestic ABS industry's load will continue to follow the median pattern at the end of May. In the early stage, the profitability of the aggregation enterprise improved, and there was a significant increase in production, gradually revealing supply pressure. In June, the average operating rate of the domestic industry fluctuated from 65% to around 70%. The production has increased synchronously, and the supply of goods on site has also increased accordingly. Supply side support for ABS spot continues to weaken.

Cost factor: In June, the upstream three materials of ABS experienced two declines and one fluctuation, with a significant decline in acrylonitrile. In the first half of the month, supply increased while demand was weak. Although there was some stabilization at the end of the month due to the increase in raw material costs, the improvement in the loss situation of most production enterprises is limited. Currently, most business owners are mainly observing the settlement of large acrylonitrile factories, while maintaining essential procurement on site.

The domestic butadiene market remained volatile and firm in June. The supply side remained tight within the month, and the available spot resources in the market were limited. After a slight decline in prices within the range, it stimulated some downstream purchases and boosted the market atmosphere. At the end of the month, social inventory fell to a relatively low level, and some holders expressed reluctance to sell. Short term market expectations remain relatively strong.

The market price of styrene fluctuated and declined in June. In the past three months, the price of styrene has mainly fluctuated with fluctuations, and the decline in the market in June was greater than the increase. The reason for the decline is the fluctuation of international oil prices and poor cost support, while the styrene market has risen to a relatively high level. Spot demand is mainly in demand, and downstream demand is slightly resistant to high prices, resulting in a slight decline in the styrene market.

In terms of demand: The main terminal demand for ABS is weak, and the overall load position of downstream factories is low. The stocking operation is mainly focused on buying in demand. Traders often offer discounts and take orders, leading to an increase in low-end market offers and a decrease in the speed of goods circulation. The market momentum is weakening, and the demand side is not providing enough support for the market.

In June, domestic ABS prices showed a weak trend. The overall strength of the upstream three materials is weak, and most of the time there is poor support for the cost side of ABS. The construction of ABS polymerization plant has increased, and supply pressure is gradually increasing. The demand side has weak demand, and the market trend is obvious during the off-season, with weak trading. Overall, it is expected that the ABS market will remain weak in the short term.

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