Consumption Shows No Improvement, ABS Prices Fall at Lower Levels in Early August

August 12th news

Since early August, the overall trend in the ABS market has been weak, with spot prices for some grades falling. According to the commodity market analysis system, as of August 12, the average price of ABS sample products in China was 10,250 CNY per ton, a change rate of -0.61% compared to early August.

Fundamental Analysis

Supply Level: Since August, the load of China's ABS industry has increased. At the beginning of the month, the Dalian Hengli plant restarted, and the pipeline cleaning task for the Tianjin Dagushan equipment was completed. The overall load level of the industry rose from 67% at the beginning of the month to over 71%, with a continuous easing on the supply side. The weekly average production approached 140,000 tons, and the inventory of polymer enterprises remained high at 220,000 tons, maintaining ample supply in the market. Overall, the long-term loose supply pattern of the ABS market remains unchanged, and the high industry inventory is temporarily manageable. In summary, the supply side provides weak support for the ABS spot price.

Cost Factors: In early August, upstream prices of ABS raw materials generally showed slight increases within a narrow range, providing limited support to the cost side of ABS. Within this period, propylene nitrile production at Zhejiang Petrochemical and Sinochem Quanzhou in East China was reduced, leading to a decline in industry capacity utilization rate and prompting market quotations to rise accordingly. Additionally, maintenance activities are still scheduled at enterprises such as Fushun Petrochemical, which will temporarily reduce supply and alleviate oversupply pressure. Meanwhile, downstream major manufacturers maintain stable contract demand, and leading producers expect prices to remain firm in the short term. However, considering the overall ample supply, spot buyers remain cautious, and upward price movements may still face resistance.

The Chinese butadiene market showed a slightly fluctuating trend with a small increase in early August. In terms of industry supply, there was a slight decrease as some plants that had reduced their load restarted, leading to a minor decline. Currently, the facilities in Shandong province have not yet started external sales, resulting in a generally tight supply. At the beginning of the month, demand saw a low inventory replenishment, and currently, overall demand has returned to the level of basic needs. The market is expected to mainly stabilize with a slightly weaker trend in the future, and the overall fluctuation may be limited.

In the styrene market, recent trends have been mainly characterized by fluctuations. The overall supply of raw material pure benzene has slightly contracted, with reductions in both petroleum benzene and hydrogenated benzene. However, the market has long been well-supplied, with ample inventory, which limits price increases. On the other hand, the operating rate of styrene has remained largely stable with minor adjustments, with some plants planning to restart or commission new facilities. Downstream demand lacks strong guidance, and it is expected that the styrene market in China will face pressure in the short term.

Demand Aspect: For a long time, ABS downstream factories have maintained moderate operating rates. Currently, the market is in the traditional off-season period, and end-user companies continue to purchase only to meet immediate needs and replenish existing orders. Since August, production scheduling in the electrical appliance casing industry has decreased, further shrinking consumption. Meanwhile, geopolitical concerns in Eastern Europe have triggered some market anxiety, adding a cautious atmosphere externally and slowing down the flow of goods. China's inventory levels remain high and stable, with continued ample supply and significant room for destocking within the market. Overall, demand-side support for ABS prices has not improved either.

Future Market Forecast

In early August, the Chinese ABS market continued to show a weak and consolidating trend. The upstream three materials saw two increases and one fluctuation, while the production load of ABS polymer plants was increased, with demand remaining at a low season level. Analysts believe that ABS has been dragged down by the supply-demand contradiction for a long time, making it difficult for the spot price to gain momentum. It is expected that the ABS market may maintain a consolidation pattern in the short term.