SunSirs: The Sales Peak Season is not Prosperous, and the Rise of China ABS is Hindered

https://www.chemnet.com   Nov 04,2024 SunSirs

In October, the domestic ABS market rose and then fell back, with spot prices of various grades basically falling back to pre holiday levels. According to the Commodity Market Analysis System of SunSirs, as of October 31st, the average price of ABS sample products was 11,475 RMB/ton, a decrease of -0.33% compared to the price level on October 1st.

Supply level: The load level of the domestic ABS industry rebounded after a decline in October. At the beginning of the month, some devices underwent maintenance, and the industry's operating rate dropped to around 61%. In the second half of the month, some maintenance facilities such as Huajin in the north and Dagu in Tianjin resumed work, and the industry's operating rate increased by 5% to nearly 67%. The overall amount of goods produced within the month is slightly more than consumed. Maintain a sufficient level of supply. Combined with the macroeconomic atmosphere at the beginning of the month, the positive effects of filling short orders have been exhausted, and the destocking effect is limited. The inventory position remained relatively high at over 180,000 tons during the month. Overall, the supply side provided moderate support for ABS spot prices during the month.

Cost factor: During October, the upstream three materials of ABS showed two declines and one rise, which provided average support for the cost side of ABS. The acrylonitrile market rebounded after a decline. In the first half of the month, there was supply pressure in the market, which led to a pullback after a weak consolidation. In the latter half of the year, some regions experienced a contraction in spot supply, prompting producers to raise prices accordingly. The increase in operating rates of downstream products has also raised demand expectations, and acrylonitrile prices have basically returned to the price level at the beginning of the month.

During October, the domestic butadiene market experienced a weak decline, with a drop of over 10%. After the first ten days of the holiday, the opening of the market was affected by the strengthening of the downstream synthetic rubber market, resulting in a slight increase in spot market prices. However, due to insufficient follow-up from downstream demand, a wait-and-see atmosphere gradually emerged in the market, and the fundamentals weakened. At the same time, due to the loose supply in the mid market, it dragged down the mentality of holders and accelerated the decline of market prices. At the end of the month, while the downstream market gained profit transfer from butadiene, consumer power also laid the foundation for the butadiene market. The current spot market is balanced by long and short positions, with prices generally stable and fluctuating slightly.

The styrene market experienced a narrow rebound after a decline within the month. The performance of crude oil in the far end of the range has weakened from strong to weak, coupled with loose supply of direct raw material pure benzene and poor cost support for styrene. On the supply side, it is relatively abundant due to the arrival of cargo at the port and stable industry load, while domestic demand is relatively stable, resulting in a wide decline in prices. In the latter half of the month, the basis difference of styrene futures continued to strengthen, and the inventory of ports such as Jiangsu was digested, causing the styrene market to turn from a decline to an increase. At the end of the month, there were many inquiries in the market, and actual orders were cautious. Overall, there was more decline than increase in the previous month.

In terms of demand, the main terminal demand for ABS in October has not yet shown the peak season level. With the decline of stocking up and short selling after the beginning of the month, the market has returned to the off-season trend, and there is a strong wait-and-see sentiment. The high-temperature holiday for home appliance manufacturers has basically ended, but the overall load position of downstream factories is slowly recovering. The recovery of terminal demand is slow, and stocking operations are mainly based on weak demand to maintain production. Traders lack confidence in the future market, their willingness to build warehouses decreases, and their offers are subject to market conditions, resulting in a slower flow of goods. Overall, the demand side is not providing strong support to the market.

In October, the domestic ABS market was hindered from rising and prices rebounded. Upstream three materials showed mixed ups and downs, providing average comprehensive support for ABS cost side. The load of ABS polymerization plant has slightly increased, while the high inventory of finished products remains unchanged. The weak demand on the demand side is difficult to change, and market trading is weak. 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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