Costs Decline, Consumption Weakens—ABS Prices Drop Sharply in April

May 1st News

Entering April, the Chinese ABS market saw a rise followed by a fall, with most grades experiencing a significant decrease in spot prices. According to SpotCom data, as of April 30, the average price of ABS sample products was 11,180 CNY/ton, a 12.43% decrease from the beginning of the month.

Fundamental Analysis

Supply Level: In April, maintenance in China's ABS industry was relatively concentrated, resulting in a significant overall reduction. In the first half of the month, production at companies such as Zhejiang Petrochemical and Yike Chemical was reduced. Mid-month, Dalian Hengli entered into maintenance, while Rongsheng Petrochemical increased its load. By the end of the month, the overall operating rate of the industry was around 60%, a decrease of nearly 10% within the period. The current weekly production is close to 130,000 tons, with finished goods inventory rising to nearly 210,000 tons. In the short term, there is still a small expectation of an increase in production, and the overall supply in the market is generally sufficient. Overall, the supply side of ABS in April provided decent support for the spot price.

Cost Factors: In early April, the situation in the Middle East remained volatile, leading to diverging sentiment among oil market participants. By mid-April, the market’s core logic had rapidly shifted—from the previous premium driven by geopolitical tensions to a scenario where expectations of easing negotiations were colliding with negative fundamental factors. Coupled with the IEA’s downward revision of supply-and-demand forecasts and the sharp increase in API inventories, international oil prices plummeted. As a result, upstream raw materials for ABS—also part of the petrochemical value chain—experienced a simultaneous decline. Among these, acrylonitrile saw low industry utilization rates throughout the month, with shipments arriving at ports at historically low levels. However, domestic demand in the market contracted sharply, and sluggish spot transactions dragged down the price center of gravity. The market thus exhibited a weak supply-and-demand dynamic, with prices trending downward.

The butadiene market continued its downward trend from March, with the magnitude of price declines significantly widening. The key driving factors are the loosening of cost support and weak downstream demand. Even though industry utilization rates within the range remain relatively low and spot supply as a whole remains tight, these conditions have proven insufficient to offset the downward pressure stemming from weak demand. As a result, the industry is experiencing a tug-of-war between strong supply and weak demand, leading to a temporary adjustment and decline in prices.

The styrene market continues to decline. From the perspective of raw materials, pure benzene has been generally stable this month. In the second half of the month, there will be a reduction in petroleum benzene, and imported supplies continue to decrease. The supply and demand pattern for pure benzene in China is becoming stronger, but it is difficult to offset the impact of the sharp drop in crude oil prices. Moreover, styrene consumption lacks effective drivers within the month, and the market lacks momentum to continue rising. However, with maintenance and production cuts planned at styrene supply facilities around the holiday period, it is expected that the styrene market may continue to show a high-level fluctuation trend.

Demand Side: As we entered April, the operating rates of downstream ABS enterprises showed a stabilizing trend. Consumption in the key end-market—electrical appliance casing industry—remained flat, and end-user companies’ profitability showed no signs of improvement. Market sentiment shifted from chasing price increases last month to entering a phase of sharp price declines. Inventory replenishment and position-building activities significantly decreased, and sellers were willing to offer discounts to lock in profits. During the month, ABS finished-product inventories rose, putting considerable pressure on companies’ ability to sell their goods. Buyers remained highly resistant to high-priced supplies, thereby exerting downward pressure on the price center of the trading range. At month-end, restocking volumes were limited. Overall, demand-side support for the ABS market remains weak.

Future Market Forecast

In April, the ABS market in China first rose and then fell. The production load of polymer plants has been reduced, but the supply in the market remains ample. The prices of the three main raw materials have all decreased. Currently, the ABS market is facing dual negative impacts from falling costs and weak demand. With a large production capacity base, concentrated maintenance has limited effect on inventory accumulation. At present, the spot price is declining from a high level, and the market transactions are 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 difference between the two averages tended to stabilize in the second half of the month. Additionally, the auxiliary indicators show that the 5 price levels of ABS are currently at recent lows and further out at moderate lows. It is judged that a short-term consolidation trend for spot prices has formed, and it is recommended to closely monitor international crude oil and Middle East shipping conditions for future market trends.