Supply Eases, ABS Prices Reduced in Early December in China

December 11th, news:

Since December, the Chinese ABS market has continued to show a weak trend, with spot prices for most grades being reduced. According to the commodity price analysis system, as of December 10, the average price of ABS sample products was 8,375.00 CNY/ton, a change rate of -2.36% compared to the end of November.

Fundamental Analysis

Supply Level: Since early December, the operating rate of China's ABS industry has increased. During this period, Jilin Petrochemical raised its load, and some plant maintenance tasks at Zhejiang Petrochemical were completed. The overall operating level of the industry is around 70%, with weekly production exceeding 145,000 tons. The supply in the market remains ample, with polymer enterprises' inventory levels holding firm at a high of around 260,000 tons. Overall, the long-term supply surplus in the ABS market remains unchanged, and the support from the supply side for the ABS spot price continues to be weak.

Cost Factors: In early December, among the three upstream feedstock materials for ABS, prices fell more often than they rose, exerting a predominantly negative impact on ABS costs. Specifically, the capacity utilization rate in the acrylonitrile industry remained above 80%, leading to an oversupply and rising inventories, which triggered volatile downward price movements in the market. Meanwhile, downstream users maintained ample inventory levels and showed only moderate purchasing interest, resulting in sluggish spot market transactions. In the short term, prices are still expected to continue declining; however, cost pressures persist and continue to limit the room for further price declines.

Within the ten-day period, the butadiene market trend in China was similar to that of acrylonitrile, with ample supply and persistently weak downstream demand. Under the dual negative impacts, the overall butadiene market was characterized by a weak and volatile trend. At the same time, there was no significant improvement in the downstream synthetic rubber market, lacking positive support. It is expected that the butadiene market in China will continue to exhibit a predominantly weak and fluctuating trend, with a focus on inventory digestion.

At the beginning of this month, the styrene market in China saw an increase. Although the demand for raw material benzene was constrained, leading to obstacles in its price rise, recently there have been more unplanned shutdowns of styrene plants, gradually strengthening the supply side. At the same time, with some recovery in downstream profits, operations have picked up, and demand has steadily followed. In the future, the supply and demand for styrene in China may continue to be in a tight balance, with prices likely to fluctuate within a range.

Demand Side: In the earlier period, consumption in the ABS downstream sector—primarily the electrical appliance casing industry—softened, leading to unsatisfactory profit margins for end-user companies. As a result, production schedules for the future show no signs of expansion. Downstream demand for ABS remains subdued, and buyers continue to adopt a strictly conservative inventory strategy, placing only essential replenishment orders, which has resulted in slow turnover of goods. Merchants’ inventory levels remain stubbornly high, and under increasing pressure to reduce inventories within the market, both manufacturers and traders continue to offer discounts and promotions to secure sales. According to customs data, the export market has largely remained flat, providing limited support for industry consumption. Both domestic and international markets maintain a cautious atmosphere, and overall industry momentum remains weak. Taken together, there is no sign of improvement in demand-side support for ABS prices.

Future Market Prediction

In early December, the ABS market in China continued to decline. The production load of polymer plants slightly increased, while consumer demand remained low and stable. 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 prices of the three upstream raw materials showed one increase and two decreases, leading to a negative sentiment among industry players, who are willing to reduce prices to facilitate transactions. With a lack of positive guidance in the short term, it is expected that the downward pressure on ABS will still persist.