Market Momentum Slows Down; Early September ABS Prices Likely to Decline at Lower Levels

September 15, News

In the first half of September, the overall trend in China's ABS market remained weak, with spot prices for some grades narrowly declining. According to the commodity price analysis system, as of September 15, the average price of ABS sample products was 9,962.50 CNY/ton, a change rate of -1.36% compared to early September.

Fundamental Analysis

Supply Level: In the past half month, China's ABS industry has seen a mix of load reductions and restarts, with overall capacity largely stable with minor fluctuations. At the beginning of the month, due to poor profit conditions for polymer plants, some companies conducted maintenance operations to reduce costs, although the scale was relatively small. Meanwhile, polymer plants such as Tianjin Dagang have seen capacity return, and overall plant dynamics in China have been limited, with the industry's operating rate fluctuating narrowly around 70%. The average weekly production has been around 135,000 tons, and inventories of polymer enterprises have gradually risen to above 240,000 tons, indicating ample supply in the market. Overall, the long-term pattern of loose supply in the ABS market remains unchanged, with inventory accumulation in the industry. Currently, there is still an expectation of increased supply, and thus, the supply side provides weak support for the ABS spot price.

Cost Factors: In the first half of September, upstream prices for ABS’s three key raw materials were generally weak, negatively impacting ABS costs. At the beginning of the month, acrylonitrile prices surged, driven primarily by reduced supply in the East China region. Meanwhile, amid ongoing cost pressures and expectations of pre-holiday restocking demand, suppliers continued to push for higher pricing. However, spot market transactions remained sluggish, while maintenance units in northern China gradually resumed operations. Coupled with the overall lack of significant demand growth, spot prices eventually halted their upward trend and began to decline as the month progressed. With mixed bullish and bearish market dynamics, the industry may once again find itself locked in a stalemate.

The Chinese butadiene market has been influenced by fluctuations in the downstream synthetic rubber futures market, with frequent volatility in the butadiene market at the beginning of September, although it generally maintained a range-bound trend. Over the past half month, the operation of butadiene plants in China has been relatively stable, with no significant changes overall. Downstream enterprises have been digesting inventory in an orderly manner. With no further positive guidance in the market and under the mentality of supply and demand bargaining, the market has given back the previous price increase. It is expected that the butadiene market will mainly maintain a narrow-range fluctuation trend in the short term.

In the first half of September, the styrene market mainly showed a volatile downward trend. At the beginning of the month, Chinese factories were operating at high levels, and the price of raw material benzene fell. Recently, some regions have implemented styrene plant maintenance plans, leading to a reduction in overall production. However, inventory accumulation at ports has become more pronounced. Additionally, the growth in downstream demand is limited. In the short term, without significant changes in the macroeconomic environment, the styrene market may continue to show a weak and volatile trend.

Demand Side: For a long time, downstream ABS factories have maintained modest operating rates. Currently, the market continues to exhibit clear seasonal weakness, with no noticeable improvement in purchasing activity among end-user companies—demand remains largely driven by essential, make-up orders. In the first half of September, consumption in the appliance casing industry remained sluggish, with no increase in production plans. Meanwhile, cautious sentiment persists in external markets, further slowing the pace of goods flow. Meanwhile, China’s inventory levels remain stubbornly high, keeping supply conditions comfortably ample and intensifying downward pressure on inventory clearance within the market. Overall, demand-side support for ABS prices shows no signs of improvement.

Future Market Prediction

In the first half of September, the ABS market in China showed a weak trend. The overall upstream raw materials were generally declining, with ABS polymer plants maintaining stable production loads with minor adjustments, and demand remained at the off-season level. Analysts believe that ABS has been dragged down by the long-term supply-demand contradiction, making it difficult for the spot price to improve. Currently, there is significant resistance to price increases in the ABS market, with merchants offering discounts to move inventory, and the sentiment is pessimistic. It is expected that ABS prices may continue to fall in the short term.