Market summary: This week, the operating rate of the acrylonitrile industry has increased, supply has increased, and some production enterprises have continuously lowered their factory prices, resulting in a slight decline in overall market prices. As of the weekend, the mainstream negotiation for container self pickup in East China ports is 9600-9750 yuan/ton, and the negotiation for short distance delivery in Shandong market is around 9350-9550 yuan/ton.

Supply side: As of December 20th, the capacity utilization rate of the domestic acrylonitrile industry reached 71.65%, an increase of 3.38% compared to the same period last week. The weekly output is 66300 tons, with a slight increase in supply. However, whether there will be a significant increase in supply in the later stage is still uncertain, and the industry inventory will continue to be low in the short term. As of December 20, 2024, the inventory of acrylonitrile plants was 29100 tons, an increase of+0.1 million tons from last week.

In terms of cost, the domestic propylene market as a whole showed a narrow range of fluctuations this week, with the mainstream closing in Shandong referring to 6880-7030 yuan/ton. The cost support is average.

In terms of demand, the capacity utilization rate of major downstream industries has not changed much, and overall demand is relatively stable. Among them, the ABS capacity utilization rate is 71.70%, which is the same as last week.

Market outlook: Currently, the domestic acrylonitrile market is deadlocked and weak. As the end of the month approaches, attention is being paid to the release of factory settlement prices. There are still expectations of a decline in spot prices, but the short-term space may be limited. At present, there is a continuous differentiation in supply between the north and south, and the supply in the East China region is still not abundant. At the same time, the industry inventory is low, and the market still has conditions for rising prices. The market has limited room for decline in the short term.

According to the monitoring of the commodity market analysis system of Shengyi Society, the magnesium ingot market in Shaanxi Province fell this week (12.16-12.20), with an average market price of 16333 yuan/ton at the beginning of the week and 16333 yuan/ton at the end of the week, with prices remaining stable.

This week’s market analysis

The transaction performance of the magnesium market has slowed down this week, mainly due to the impact of concentrated downstream procurement last week. At the same time, as Christmas approaches, foreign customers are gradually entering a vacation state, and the number of overseas inquiries has significantly decreased. In the domestic market, procurement is mainly based on essential needs, and overall demand is relatively stable.

Supply and demand side

This week, magnesium prices have remained relatively stable, mainly due to the support of factory costs and the stabilization of the ferrosilicon market. Meanwhile, the support of the storage policy also makes it difficult for magnesium prices to further decline. However, due to the overall accounting losses of factories, the market generally expects limited downward space for magnesium prices.

Due to the combined effects of loose supply and demand, factory cost support, and storage policies, it is expected that the magnesium market will be mainly stable next week. However, the market still needs to pay attention to demand follow-up in order to determine future market trends.

comprehensive analysis

This week, the transaction volume in the magnesium market has slowed down, mainly due to the impact of downstream centralized procurement and reduced demand in foreign markets in the early stage. It is expected that the market will remain stable next week, but attention still needs to be paid to the follow-up of demand.

According to the monitoring of the commodity market analysis system of Shengyi Society, the price of anhydrous hydrofluoric acid in China remained stable this week. As of December 19th, the benchmark price of hydrofluoric acid in Shengyi Society was 11583.33 yuan/ton, which was the same as the beginning of this week.

Raw material side: The price of raw fluorite remained stable at a high level this week. The current situation of the game in the domestic fluorite industry still exists. Overall, the operating rate of enterprises has not changed much. Upstream mining is tight, backward mines will continue to be eliminated, and new mines will be added. Mineral investigation work is still difficult. In addition, national departments need to rectify fluorite mines, and fluorite mining enterprises are facing increasingly strict safety and environmental protection requirements. Although the rectification action is coming to an end, the affected area has not narrowed. The difficulty of operating fluorite mines has increased, and the shortage of raw materials has limited the operation of fluorite enterprises. The supply of fluorite sources is still tight. According to the monitoring system of Shengyi Society, domestic fluorite prices have risen this week. As of December 19th, the benchmark price of Shengyi Society fluorite was 3678.75 yuan/ton, an increase of 0.10% compared to the beginning of this month (3675.00 yuan/ton).

Demand side: Maintain stability in the downstream refrigerant market. Some factories have offered price increases. Affected by quota management and maintenance plans, most units in the refrigerant industry entered a shutdown state in December, and the operating load gradually decreased, resulting in a continued cold atmosphere towards raw material procurement.

Market forecast: The market price of raw materials remains stable at a high level, and downstream purchases are mainly based on demand. We adopt a wait-and-see and cautious attitude towards high priced raw material purchases. It is expected that the price of hydrofluoric acid will remain stable in the later period.

The ABS market in China remained relatively strong in December, with spot prices of various grades increasing. According to the Commodity Market Analysis System of Shengyi Society, as of December 18th, the average price of ABS sample products was 11787.5 yuan/ton, with an increase or decrease of 2.61 yuan compared to the beginning of the month.

Fundamental analysis

Supply level: In December, the operating rate of the ABS industry in China remained stable with small fluctuations, and the industry load level had limited changes compared to the beginning of the month. In the early stage, Hengli Petrochemical’s AS plant was converted to ABS, and the Tianjin Dagu blowing task ended, gradually returning to production capacity. The overall operating rate of the industry has rebounded by 2% to around 71%, with a narrow increase in weekly average production of 120000 tons. The inventory of aggregation enterprises has limited changes, with a flat position of 160000 tons, and the overall pattern of abundant supply of goods remains unchanged. Overall, in mid December, the supply side provided average support for ABS spot prices.

Cost factor: Since December, the upstream three materials of ABS have shown a trend of one increase and two increases, with overall support for ABS costs being average. The domestic acrylonitrile market has maintained a high level of growth, while major factories in East China are operating at low loads, with tight supply remaining unchanged. At the same time, the low inventory position in the industry supports suppliers to continue to raise prices, and the market continues to remain strong.

Recently, the domestic butadiene market has remained stable after rising. The inventory of ports in East China is relatively low, and there is an expectation of tight supply in the spot market. The downstream synthetic rubber futures market has strengthened, once again driving up market sentiment. However, with the continuous rise in prices, downstream receiving capacity has gradually declined. Recently, the atmosphere in the spot market has begun to fade, and the market’s upward momentum has weakened, and the market may return to balance.

In mid December, the styrene market fluctuated and consolidated. The performance of upstream crude oil in the far end is still acceptable, with the main focus on consolidating the price of pure benzene as the direct raw material. However, the cost side of styrene has largely exhausted its support for spot prices in the early stage. The changes in domestic industry operating rates are limited, and the situation of tight supply continues. However, in the future, there will be frequent restarts of production capacity, and expectations for a relaxed supply market will be met. At present, there is a lack of further boosting factors in the market, leading to a consolidation of the market.

In terms of demand, the purchasing power in the middle and lower reaches of December is still acceptable. In terms of terminal products, due to the continuous stimulation of the national subsidy policy for household appliances, sales of some terminal products have increased, and enterprise inventory has been digested. Due to the concerns of home appliance exporters about the remote market, some export demand has been pushed forward, the overall load position of factories has rebounded, terminal stocking willingness has strengthened, and procurement operations have increased synchronously. Merchants attempted to increase their offers, but the activity of supply circulation remained high. Overall, the demand side can still provide support to the market.

Future forecast

The ABS market in China is expected to strengthen and consolidate in December. 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 rebounded, and finished product inventory continues to be digested. On the demand side, the demand is relatively strong, and the market continues to be guided by consumption and remains stable with some strength. However, the increase in demand for household appliances may overdraw future consumption, and businesses have concerns about the post holiday market. Business analysts believe that the uncertainty of ABS’s forward trend may constrain short-term gains. After the recent short selling replenishment market is exhausted, the ABS market may return to a narrow consolidation trend.

According to the Commodity Market Analysis System of Shengyi Society, the domestic natural rubber spot market has been rising and then falling recently (12.1-12.17). As of December 17, the spot rubber market price in China’s natural rubber market was around 17284 yuan/ton, up 1.51% from 17027 yuan/ton on December 1, and the highest point during the cycle was 17740 yuan/ton. Recently, the price range of raw materials has fluctuated; Domestic Tianjian inventory continues to increase slightly; Downstream tire factories tend to stock up on demand to support the demand for natural rubber, but they have some resistance to high priced sources, and the natural rubber market is consolidating in the high range.

December is currently the peak production season in major overseas production areas, and there is an expectation of seasonal increase in raw material output. But at the beginning of the month, there was more rainfall in southern Thailand, which restricted the development of rubber cutting work. In the middle of the month, as the weather improved, rubber cutting work gradually returned to normal, and raw material prices fell slightly from high levels. As of December 17th, the price of Thai glue was 75.00 baht/kg, a significant increase from 69.00 baht/kg on the 1st; As of December 17th, the purchase price of state-owned and gold rubber water-based concentrated latex raw materials in Hainan production area was around 17400 yuan/ton, slightly adjusted from 17500 yuan/ton on the 1st.

Natural rubber inventory continues to show a state of accumulation. As of December 15, 2024, the total inventory of Tianjiao bonded and general trade in Qingdao area was 452000 tons, an increase of 17300 tons compared to the previous period.

The downstream tire production is basically stable, and the downstream tires mainly provide support for the natural rubber market’s demand. As of December 13th, the operating load of semi steel tires in domestic tire enterprises is around 7.9%; The operating load of all steel tires in tire enterprises in Shandong region is about 5.7%.

Market forecast: The current domestic and international supply of raw materials is gradually increasing, and the prices of raw materials are slightly falling from high levels; The tire market supports the demand for natural rubber, but is resistant to high priced sources of goods; The inventory of Tianjian has slightly increased; Overall, it is expected that the natural rubber market will mainly fluctuate within a range in the short term.