Shipping Pressure Continues, ABS Market Prices Still Decline

November 24, News

At the end of November, the Chinese ABS market continued to show a weak trend, with spot prices for some grades being reduced. According to the commodity price analysis system, as of November 24, the average price of ABS sample products was 8,620.00 CNY/ton, a change rate of -5.74% compared to early November.

Fundamental Analysis

Supply Level: Since November, the operating rate of China's ABS industry has fluctuated, with minor adjustments. In the early period, the load in Shandong region increased, and the scale of maintenance at the end of the month was relatively small, keeping the overall operating level of the industry stable at 72%, with an average weekly production of over 145,000 tons. The supply within the market remains ample, with the inventory of polymer enterprises holding firm at a high level of nearly 260,000 tons. Overall, the long-term loose supply pattern of the ABS market remains unchanged, and the support from the supply side for the ABS spot price continues to be weak.

Cost Factors: At the end of November, upstream propylene-based raw material prices for ABS remained largely stable, exerting a relatively weak upward influence on ABS costs. Meanwhile, the fundamental outlook for acrylonitrile has shown no significant improvement yet, leading to sideways price movements in the market. Key contract-grade factory inventories remain manageable, allowing producers to maintain their pricing stance. Additionally, unexpected demand is emerging in the Shandong market, bolstering industry sentiment. However, overall supply conditions remain ample, and the market is expected to trade within a narrow range in the near term.

At the end of November, the butadiene market in China first rose and then fell, with an overall increase. During this period, the follow-up by downstream factories was acceptable, and local supply digestion pushed up the spot price. However, from an overall supply perspective, it remained relatively loose. As prices rose, the enthusiasm of downstream buyers to enter the market noticeably decreased, and coupled with the recent weak trend in the synthetic rubber market, butadiene prices showed a stagnation and then a decline.

Recently, the styrene market has been mainly fluctuating. The price of raw material pure benzene in China was driven up by the rise in the foreign market, but the fundamental weakness remained unchanged. After a brief increase, the price dropped, providing limited support to styrene. On the other hand, Quanzhou Sinochem unexpectedly shut down for maintenance, leading to an unplanned reduction in supply. Demand from overseas saw a slight boost, but its sustainability is limited. Domestic demand in China is currently in the off-season, with downstream operations remaining stable. Overall, it is expected that the styrene market will continue to consolidate and fluctuate in the short term.

Demand Side: Downstream demand for ABS remains flat, with factory utilization rates staying moderate. At the terminal level, businesses continue their cautious inventory strategies, primarily focusing on fulfilling immediate needs rather than building up large stockpiles, leading to slow-moving product flows. Meanwhile, traders are also holding onto high inventory levels, and as pressure mounts to clear these stocks within the market, both manufacturers and retailers are continuing to offer discounts to facilitate sales.

On a broader front, weakening profitability among end-user companies and ongoing volatility in external markets have dampened consumer activity in the key downstream sector of appliance casing production, resulting in no increase in near-term production plans. Additionally, the mid-month e-commerce shopping festival provided only limited support to industry consumption, while both domestic and international markets remain cautious, further weighing down industry momentum.

Overall, demand-side factors show no signs of improving support for ABS market conditions.

Future Market Prediction

At the end of November, the ABS market in China continued to decline. The production load of polymer plants remained largely stable with minor adjustments, and consumer demand remained low and flat. Analysts believe that the long-term contradiction between ABS supply and demand has been troubling the market, dragging down the spot price. At the same time, the upstream raw material market is stagnant, and the sentiment among industry players is generally negative. With a lack of positive guidance in the short term, it is expected that the downward pressure on ABS will still exist.