Both Costs and Consumption Weak, ABS Continues to Decline

April 23 news

Entering late April, the Chinese ABS market continues to decline, with spot prices for most grades gradually decreasing. According to Spotcom data, as of April 23, the average price of ABS sample products is 10,916.67 CNY/ton, a 14.49% decrease from the beginning of the month.

Fundamental Analysis

Supply Level: In mid-April, the Chinese ABS industry saw both maintenance and resumption of operations, with the overall level remaining low and stable. Previously, the operating load of Rongsheng Petrochemical increased, while Dalian Hengli entered maintenance in mid-month. The current overall operating rate of the industry has slightly increased to around 60%, with the weekly average production approaching 130,000 tons, and finished goods inventory rising to 200,000 tons. In the short term, there is still a small expectation for an increase in production, and the supply within the market is generally ample. Overall, the support from the ABS supply side for the spot price has remained flat.

Cost Factors: In early April, the situation in the Middle East remained volatile, causing divergent sentiment among oil market participants. Since mid-April, the market’s core logic has shifted rapidly—from the previous premium driven by geopolitical tensions to a scenario where expectations of easing negotiations are now colliding with negative fundamentals. Coupled with the IEA’s downward revision of supply-and-demand forecasts and the sharp surge in API inventory levels, international oil prices have plunged sharply. As a result, upstream raw materials for ABS—also part of the petrochemical value chain—have all fallen together. Among these, acrylonitrile, despite relatively low industry utilization rates and low levels of vessel arrivals, has seen sluggish spot transactions due to shrinking domestic demand, dragging down the price center of gravity. The market is now characterized by weak supply and weak demand, leading to declining prices.

The butadiene market has seen a significant decline. The gradual loosening of cost support and the lackluster boost in downstream demand have become the key factors driving market trends. Even though spot supply remains generally tight, it has proven insufficient to offset the downward pressure caused by weak demand. As a result, the industry as a whole is locked in a dynamic characterized by strong supply and weak demand, leading to temporary price corrections and adjustments.

The styrene market continues to decline. In the short term, there is an expectation of a reduction in petroleum benzene, especially with imports expected to decrease continuously. The supply and demand dynamics for pure benzene in China are becoming stronger, but this is not enough to offset the impact of the sharp drop in crude oil prices. Currently, styrene consumption lacks effective drivers, and the market lacks momentum to continue rising, leaving prices in a difficult position.

Demand Side: As we enter late April, the operating rates of downstream ABS enterprises have leveled off. Consumption in the key end-use sector—electrical appliance casing—remains sluggish, and end-user companies’ profitability shows no signs of improvement. Market sentiment has shifted from chasing price increases to selling off at lower prices, and inventory replenishment and position-building activities have significantly declined. Sellers, eager to lock in profits, are offering discounts, putting downward pressure on price levels. Currently, ABS finished-product inventories continue to rise, and buyers’ resistance toward high-priced supplies is growing. Overall, demand-side support for the ABS market remains weak.

Future Market Forecast

In early late April, the ABS market in China continued to decline. The production load of polymer plants remained largely stable, with ample supply in the market. The prices of the three major cost components all fell. The current ABS market is facing dual negative pressures from high costs falling and weak demand. Under the large production capacity, the impact of concentrated maintenance on inventory accumulation is limited. Currently, the spot price is declining from a high level, and trading in the market is relatively quiet.

Technical Analysis

Analysts believe that according to SpotCom, on April 15th, the 10-day moving average of ABS crossed below the 20-day moving average, and the negative mean difference showed a trend of widening. Additionally, auxiliary indicators show that the 5-tier price of ABS is currently at a recent low and a distant medium level. It is judged that a short-term downward trend in the spot price may form, and it is recommended to closely monitor international crude oil and Middle East shipping conditions for future market trends.