SunSirs: The Market is Weak, China ABS is under Pressure and Consolidating in the First Half of August

https://www.chemnet.com   Aug 14,2024 SunSirs

After a slight increase in the domestic ABS market in the first half of August, the market has been consolidating and operating, with most spot prices of various grades stabilizing slightly. According to the Commodity Market Analysis System of SunSirs, as of August 31st, the average price of ABS sample products was 12,050 RMB/ton, an increase or decrease of +0.42% compared to the price level on August 1st.

Supply level: In the first half of August, the domestic ABS industry's load was generally at 65% of the operating level at the end of last month. The load of enterprises such as Tianjin Dagu and Zhejiang Petrochemical in the interval has slightly increased, and the total output has also increased. While the supply increases, the overall inventory increase is limited. In addition, due to the decline in raw material prices, the profitability of manufacturers has slightly improved, while pricing operations tend to remain firm. Overall, the current supply side has moderate support for ABS spot prices, and the future supply pressure may show an increasing trend.

Cost factor: In the first half of August, the overall trend of ABS upstream materials was weak, which weakened the support for ABS cost side. The domestic acrylonitrile market continued to decline. The upstream raw material propylene market is fluctuating downward, with insufficient support. Although several acrylonitrile factories have reduced their load and production in the past half month, the substantial impact on the site is not significant. On site consumption is insufficient, supply remains abundant, and many businesses are bearish on the future market, leading to a bias towards low-end transactions.

The domestic butadiene market continued to operate weakly in the first half of August. The main downstream synthetic rubber enterprises have seen a decline in profits and a weak willingness to stock up. The market trading atmosphere is relatively weak, dragging down the downward trend of offers. However, the number of offers from on-site merchants has increased compared to the previous period, and the market supply is loose with narrow demand. Overall, butadiene has shown weak supply and demand in recent times, and it is expected that there may still be room for further decline in the short term.

The styrene market was weak in the first half of August. The price of pure benzene is consolidating at a low level, with poor cost support. However, the spot demand for styrene is mainly driven by rigid demand, and the market lacks upward momentum. However, recently there have been many inspections of the styrene plant, and the inventory at Jiangsu ports has decreased. There is a mix of long and short positions in the market, and it is expected that the styrene market will have limited decline and mainly fluctuate and consolidate.

In terms of demand: As we enter August, there has been no improvement in the main terminal demand for ABS. Some home appliance manufacturers are maintaining holiday and shutdown, and 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.

In the first half of August, domestic ABS prices experienced a narrow increase and then remained stagnant. Upstream three materials fell and consolidated, weakening support for ABS cost side. The load of ABS polymerization plants within the range is stable with some increase, and coupled with weak demand on the demand side, the market has not yet deviated from the off-season trend. Although the increase in social inventory is limited, it is expected that the pressure on future inventory supply will increase. Overall, it is expected that the ABS market will face downward pressure in the short term.

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