In early March, the domestic ABS market experienced an epic rise, with significant increases in spot prices for all grades. The market atmosphere shifted from a post holiday calm to a hot one. According to the Commodity Market Analysis System of Shengyi Society, as of March 9th, the average price of ABS sample products was 14233.33 yuan/ton, with a price level increase of 59.45% compared to the beginning of the month. Some grades even saw a weekly increase of over 3000 yuan/ton, setting a record for the highest increase in recent years.
Fundamental analysis
Supply level: coexistence of start-up recovery and maintenance expectations
Since returning after the holiday, the load of the domestic ABS industry has fluctuated and increased. In early March, the production capacity of enterprises such as Zhenjiang rose at a low level, and the overall operating level of the industry increased by about 6% to 70%. The weekly average output rebounded to 150000 tons, and the inventory position of aggregation enterprises was digested to 187000 tons. However, there is a 45 day maintenance plan for the midstream of Yingshili benzene, and Zhangzhou is expected to experience a decrease in load from March to April due to insufficient upstream raw material supply. Coupled with the impact of the atmosphere of reluctance to sell and speculation in the domestic market, the on-site supply is more inclined towards tight balance. Overall, despite the ongoing supply-demand imbalance in the industry, the short-term supply side provides strong support for ABS spot prices.
Cost factor: Geopolitics triggers upstream three materials, with unprecedentedly strong cost support
In early March, due to the Middle East conflict affecting oil and gas production and supply, the escalation of the US Iran standoff, and the risk of the closure of the Strait of Hormuz, directly triggered market panic over energy and raw material supply. The upstream three materials of ABS, which belong to the same petrochemical product, were simultaneously subjected to severe impact.
Acrylonitrile: The price increase of acrylonitrile in the market is expanding, and the cost push is gradually increasing. Industry players are concerned about the continued supply of raw materials. Under the pressure of losses and expectations of supply variables, the market has a strong bullish atmosphere, and major suppliers have significantly increased their quotes. However, in the short term, the overall market supply is still relatively abundant, and attention should be paid to the degree of raw material acceptance under the squeeze of downstream product profits.
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