The domestic ABS market rose in early December, with spot prices of various grades increasing. According to the Commodity Market Analysis System of Shengyi Society, as of December 11th, the average price of ABS sample products was 11750 yuan/ton, with a price level increase or decrease of+2.29 compared to the beginning of the month.
Fundamental analysis
Supply level: In early December, the operating rate of the domestic ABS industry remained stable with small fluctuations, and the industry load level had limited changes compared to the end of November. The resumption of maintenance and work within ten days has been mutually observed, with the overall industry operating rate decreasing by 2% to around 69%, and the weekly average production of 117000 tons slightly declining. Inventory has also been digested, with a decrease of nearly 20000 tons to around 160000 tons, but the overall pattern of abundant supply remains unchanged. Overall, the supply side provided average support for ABS spot prices in early December.
Cost factor: Since December, the trend of ABS upstream three materials has either consolidated or increased, and overall support for ABS cost side performance is still acceptable. The domestic acrylonitrile market remains at a high level with an upward trend, while the supply in the East and South China regions remains tight and unchanged, making it difficult to achieve significant growth in the short term. With low inventory support, suppliers continue to raise prices, and the market continues to rise, with prices remaining firm and upward.
The domestic butadiene market has steadily rebounded slightly within the range. In the early stage, the arrival of cargo in the East China region was poor, and the supply expectation in the spot market was tight. In addition, the ex factory prices of suppliers have risen recently, and spot market offers have generally increased. Downstream demand remains weak, procurement intentions are poor, and insufficient demand support may make it difficult to maintain upward momentum in the future market. Overall, the price increase of butadiene may be limited.
In early December, the styrene market fluctuated and consolidated. The upstream crude oil in the far end has slightly loosened, and the price of pure benzene, the direct raw material, has fallen after rising. The cost support of styrene is struggling. The operating rate of domestic industries has limited changes, and the tight supply situation continues. Combined with the decline in imports expected at the end of the previous month, the current bullish trend dominates the market, but the expectation of weakened supply and demand in the future has led to cautious operations by businesses.
On the demand side: Although the downstream wait-and-see sentiment remained strong in December, the terminal side of home appliances products made efforts. Due to the continuous stimulus of the national subsidy policy for household appliances, sales of some end products have increased, and demand has slightly risen. 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 continue to digest inventory, try to increase their offers, and increase the activity of source circulation. Overall, the demand side is helping to heat up the market.
Future forecast
The domestic ABS market strengthened in early December. The performance of the upstream three materials is still acceptable, providing strong comprehensive support for the cost side of ABS. The load of ABS polymerization plant has slightly decreased, and finished product inventory continues to be digested. The demand side is becoming stronger, and the market is stable and strong under the guidance of consumption. However, the supply contraction within the venue is limited, and coupled with the fear of overdrawn demand for household appliances, future consumption may be affected. Industry players are concerned about the future market, and analysts from Business Society believe that the uncertainty of ABS’s forward trend may constrain short-term gains. In the near future, the ABS market may return to a narrow range consolidation trend.
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