The ABS market in China remained stable and organized in January, with spot prices of various grades showing small fluctuations. According to the Commodity Market Analysis System of Shengyi Society, as of January 14th, the average price of ABS sample products was 11875 yuan/ton, with a price level increase or decrease of+0.32% compared to the beginning of the month.
Fundamental analysis
Supply level: In January, the operating rate of the ABS industry in China remained stable with a slight decrease, and the industry load level saw a narrow decline of about 1% to 73% compared to the beginning of the month. Mainly due to the decrease in load of the Tianjin Dagu plant. However, the weekly average production within the range is still close to 130000 tons, and the inventory level of aggregated enterprises is close to 170000 tons, both of which are in a high horizontal trend. The overall pattern of abundant supply of goods remains unchanged. Overall, there was no improvement in the supply side’s support for ABS spot prices in mid January.
Cost factor: Recently, the three upstream materials of ABS have shown mixed trends, with overall support for ABS costs being average. The domestic acrylonitrile market has maintained a sideways trend recently. In the early stage, the industry maintained low load operation, and it will take time for supply to return. In addition, the industry’s inventory position is low, and prices are running steadily. But downstream buying sentiment has weakened, and the overall market is adopting a wait-and-see attitude.
Recently, the butadiene market has also remained strong at a high level, and the available supply of goods in the spot market has remained relatively tight. Holders of goods have a strong mentality of raising prices. But with the continuous rise of spot prices in the early stage, the downstream high-level receiving ability gradually declines. At the same time, with the expectation of increased production capacity in the future, it is expected that butadiene may enter a weak consolidation market.
In terms of styrene, it fell in early January, but recently the market has fluctuated and rebounded narrowly. Entering January, it is common for styrene plants to restart, and the tight supply situation has become more relaxed, resulting in a weakened market. However, in recent times, upstream crude oil prices have risen, coupled with low styrene prices and stable downstream demand, resulting in a narrow rebound in prices.
On the demand side: In January, the purchasing power in the middle and lower reaches was weak, and the demand for export of some front-end home appliances in the terminal sector was exhausted. At the same time, as the Lunar New Year holiday approached, terminal factories gradually closed, and the overall load position fell. Downstream enterprises gradually completed stocking. Overall, the demand side provides average market support. However, the extension of the national subsidy policy for household appliances will stimulate the market, and terminal products may continue to receive policy support in the future. There is hope for enterprise inventory digestion, and market confidence is expected to remain stable.
Future forecast
The ABS market in China in January was mainly sorted out. The performance of the upstream three materials is still acceptable, but the comprehensive support for ABS cost side is average. The load of ABS polymerization plant has slightly decreased, with limited changes in the supply side. The demand on the demand side is weak, and the demand on the market is becoming weaker. Business analysts believe that the ABS market may enter a pre holiday period and stabilize.
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