In the first half of April, the domestic ABS market fell from a high level, and the spot prices of most grades were lowered. According to data from Shengyishe Spot News, as of April 14th, the average price of ABS sample products was 12216.67 yuan/ton, a 4.31% decrease from the beginning of the month.
Fundamental analysis
Supply level: Entering April, the domestic ABS industry has relatively concentrated maintenance. By mid April, the overall operating level of the industry was around 59%, with an average weekly output of less than 130000 tons, and finished product inventory levels of over 195000 tons continued to accumulate. In the short term, there will be little change in production in the future, and the supply in the market will shift from tight balance to abundant. Overall, the ABS supply side provides moderate support for spot prices.
Cost factor: Since early April, the situation in the Middle East has been fluctuating, and the mentality of industry players has been divided. US crude oil inventories have accumulated beyond expectations, coupled with OPEC+’s firm stance on production cuts, causing crude oil futures to plummet simultaneously. The upstream three materials of ABS, which belong to the same petrochemical products, either remain stagnant or decline. The domestic demand for acrylonitrile in the market is gradually shrinking, and there is a shortage of spot buying gas. The sluggish transactions have suppressed the market’s continued upward trend, and negotiations in some northern markets have slightly declined. Under local sales pressure, there are downward expectations in the market.
The unilateral surge in the butadiene market has ended. Downstream enterprises such as butadiene rubber have reduced their demand for butadiene due to rigid procurement. Similar to acrylonitrile, the domestic market demand remains weak, and the tight supply and shortage of imported materials in some areas make it difficult for businesses to support high reporting. For the past half month, the price center of gravity has continued to decline. It is recommended to focus on tracking cost fluctuations, equipment production and maintenance progress, and downstream actual transaction follow-up changes in the future.
The styrene market fluctuated and fell. The geopolitical situation is fluctuating, and crude oil prices fluctuate after falling. Although overseas pure benzene facilities have reduced their load, the market mentality is divided. Downstream high price resistance is strong, and the cash flow of the 3S industry continues to suffer losses, resulting in a decrease in load. Currently, there is a lack of positive guidance in the market, and it is expected that styrene may follow the fluctuations in oil prices in the short term.
On the demand side: After returning from the small holiday in April, downstream ABS enterprises did not start as expected, and the consumption of the main terminal electrical shell industry was average. The profitability of terminal enterprises did not improve. The atmosphere of chasing price increases in the venue has slowed down, and there has been a reduction in replenishment and warehouse building operations. Merchants engage in profit taking operations that result in a downward trend, causing a drag on the price center of gravity. The current ABS finished product inventory position continues to rise, and the buyer camp’s resistance to high priced goods is expanding. Overall, the demand side has poor support for the ABS market.
Future forecast
The domestic ABS market fluctuated and fell in the first half of April. The production load of the aggregation plant has been reduced, but the on-site supply is still abundant. The cost and material market have weakened. The current ABS market is in a dual negative situation of high cost decline and weak demand. Under high production capacity, centralized maintenance has limited suppression on inventory accumulation. At present, spot prices are declining at a high level, and trading on the market is relatively quiet.
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