In early March, the domestic ABS market showed weak consolidation, with most spot prices of various grades experiencing a narrow decline. According to the Commodity Market Analysis System of Shengyi Society, as of March 10th, the average price of ABS sample products was 11162.50 yuan/ton, with a price level increase or decrease of -0.54% compared to the beginning of the month.
Fundamental analysis
Supply level: Since early March, the operating rate of the domestic ABS industry has been narrowly increased, and the load has fluctuated by around 2% to 74% in the first ten days. The average weekly production has increased to over 130000 tons, and the inventory level of aggregation enterprises is 180000 tons, slightly lower than the end of February, but the overall supply of goods remains abundant. The improvement of orders in petrochemical plants is limited, and traders are lagging behind in terms of goods delivery, resulting in a high incidence of discounted orders. Overall, the supply side’s support for ABS spot prices within ten days is average.
Cost factor: In early March, the upstream three materials of ABS showed weak trends, which did not provide good support for the cost side of ABS. The price of acrylonitrile has fallen to touch the theoretical production cost line, and the market downturn has slowed down recently. The high load of 89% in the industry has put pressure on the supply side, and the company’s profit situation is showing losses. Combined with the follow-up of new production capacity in the future, the rebound of acrylonitrile market still lacks momentum.
The butadiene market continued to fluctuate and show a weak trend within the next ten days. The overall market supply is relatively loose, and holders are unable to raise prices. The downstream synthetic rubber market trend is still weak, and under the weak supply-demand pattern, the butadiene market continued to delay its weak operation trend this week.
Styrene showed a significant decline in early March. The international oil prices in the remote upstream have fallen, and the support on the raw material side is poor. On the supply side, it is constrained by high port inventory, while downstream demand is hindered by increased production resistance. Currently, styrene continues to decline due to cost and demand constraints, and it is expected to consolidate and operate after a short-term market downturn.
On the demand side: On the terminal side, we will continue the previous flat pattern, and after the downstream buying stagnation in early March. The load increase of the terminal factory in the inquiry is not significant, and the purchasing logic tends to be weak in demand and bottom fishing. The atmosphere of on-site purchasing is sluggish, and the flow of goods is slow. Overall, the demand side has weak support for the ABS market.
Future forecast
The domestic ABS market fluctuated and fell in early March. The three upstream materials all fell, providing poor comprehensive support for the cost side of ABS. The load of ABS polymerization plant has slightly increased, and inventory has been slightly digested but still remains at a high level. The demand side expansion is still slow, and downstream enterprises have insufficient consumption. Business analysts believe that the ABS market has strong supply and weak demand, and is under pressure from a decrease in cost value. In the short term, the market will continue to be dominated by weak consolidation.
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