June 15 news
In the first half of June, the Chinese ABS market continued to decline, with spot prices for most grades being lowered. According to SpotCom data, as of June 15, the average price of ABS sample products was 9,266.67 CNY/ton, a decrease of 4.63% from the beginning of the month.
Fundamental Analysis
Supply Level: Entering June, the plant load in China's ABS industry has decreased, with the overall operating rate slightly falling to around 58%, and the current weekly average production is less than 125,000 tons. At the same time, the finished goods inventory has not decreased but instead increased, currently approaching 230,000 tons. The shipment situation from polymer plants has remained sluggish over the past half month. In the short term, the production trend is expected to be largely stable with a slight increase. Overall, the supply side of ABS in the first half of June provides moderate support for the spot price.
Cost Factors: Since June, there have been frequent reports of an initial peace agreement between the U.S. and Iran in the Middle East. As the middle of the month approached, high-level officials from both sides intensively released positive signals. Although it will still take time for shipping through the Strait of Hormuz to fully resume, the market now judges that the Middle Eastern conflict is easing, causing oil prices to plunge once again. As a result, the cost of the three upstream raw materials for ABS—also part of the petrochemical chain—has been dragged down. The cost of acrylonitrile has declined, while downstream consumption remains weak. However, the industry’s capacity utilization rate has fallen again, prompting continued reductions in supply. Low-priced spot resources within the market are gradually being absorbed. Buying interest in the spot market has picked up, stabilizing prices and marking a temporary bottom. Nevertheless, lacking strong positive guidance, the rebound momentum remains insufficient.
In the first half of June, the butadiene market in China consolidated and then declined. Although some companies carried out maintenance as planned, the profit margins for downstream end products were poor, and there was little increase in inventory buildup. Butadiene was also dragged down by the spot and futures prices of synthetic rubber, and it is expected that the butadiene market may continue to consolidate at low levels.
In the past half month, the styrene market has continued to decline. From the raw material perspective, although the price decrease of pure benzene has slowed down compared to the end of May, it still remains in a negative trend. Meanwhile, the supply of styrene in China has shifted from tight to balanced, and the consumption of styrene still lacks effective drivers, resulting in insufficient momentum for market growth. In the second half of the month, multiple styrene plants in China are scheduled to restart, and in the medium to long term, the supply and demand for styrene is expected to weaken, putting pressure on prices.
Demand Side: In the first half of June, the operating conditions of downstream ABS enterprises remained largely unchanged. The main end-use appliance industry has officially entered the off-season, resulting in weak demand for appliance housings and no improvement in the profitability of end-user companies. Market sentiment is characterized by a preference for buying at higher prices rather than lower ones, leading to a significant reduction in restocking and new-position-building activities. Meanwhile, traders are engaging in low-price sales to recover cash flow, while buyers remain highly reluctant toward high-priced supplies. Overall, demand-side support for ABS prices remains weak.
Future Market Forecast
In the first half of June, the ABS market in China continued to decline. The production load of polymer plants fluctuated slightly at a low level, but inventories accumulated, and the supply within the market remained ample. The overall cost of the three main raw materials was on a weak trend. Currently, the supply-demand contradiction for ABS remains prominent, with the spot price center loosening, and trading within the market is relatively quiet.
Technical Analysis
Analysts believe that according to the SpotCommodity display, during the first half of June, the 10-day and 20-day moving averages of ABS did not intersect, and the difference between them showed a trend of stabilization. Additionally, auxiliary indicators show that the 5-level price of ABS is at a recent mid-position and a distant low position. It is judged that in the short term, the possibility of a weak consolidation and downward movement in the spot price has increased. For future market conditions, it is recommended to closely monitor international crude oil and Middle East shipping situations.
