After a consolidation of the domestic ABS market in May, it fell, with most brands experiencing a decrease in spot prices. According to the Commodity Market Analysis System of Business Society, as of May 30th, the average price of ABS sample products was 12150 yuan/ton, a decrease of -2.61% from the price level on May 1st.

Fundamental analysis

Supply level: At the beginning of this month, the domestic ABS industry took on a low load pattern in the early stage. After a four month upward trend, the price of ABS has risen to a high level, and the profitability of aggregation enterprises has improved. In the first half of May, there were operations to increase load and expand profits, and the average operating rate of domestic ABS enterprises increased by nearly 10%, to around 65%. The production has increased synchronously, and the supply of goods on site has also increased accordingly. In the second half of the month, the industry load remained generally stable, and the supply side’s support for ABS spot goods gradually weakened.

Cost factor: In May, the trend of ABS upstream three materials generally weakened, with concentrated resumption of acrylonitrile maintenance equipment and lagging downstream consumption follow-up. There is a certain supply-demand contradiction in the market, and spot prices continue to decline. The current acrylonitrile market is bearish.

After a decline in the domestic butadiene market in May, it rebounded in the latter half of the year. In the early stage, supply was relaxed, and external prices continued to weaken. The news of low-priced transactions stimulated the domestic market, and buyer inquiries were low. In the second half of the month, there was an increase in business maintenance, supply tightened, and suppliers actively increased, resulting in a significant rebound in the market.

In May, the market price of styrene first fell and then rose, and the increase was greater than the decline. The reason for the decline in the first half of the year was due to increased supply expectations, poor spot demand, weak styrene transactions, and a slight decline in the market. In the second half of the month, the United States entered a peak season for crude oil demand, with international oil prices rising and the raw material pure benzene market rising, and cost support improving. At the same time, the inventory of styrene at the port has been continuously decreasing, and downstream enterprises have followed up with an increase, warming the market atmosphere.

In terms of demand: The main terminal demand for ABS has not improved, and the overall load of downstream factories is generally stable, with stocking operations mainly focused on buying in demand. Traders are flexible in their orders, leading to an increase in low-end market offers and a decrease in the speed of goods circulation. The market momentum is weakening, and the demand side is not providing enough support for the market.

Future Market Forecast

In May, domestic ABS prices showed a weak trend. From a fundamental perspective, the upstream three materials of ABS have been fluctuating, with mixed ups and downs. Most of the month, there has been poor support for the cost side of ABS. The construction of ABS polymerization plant has significantly increased, and supply pressure is gradually increasing. On the demand side, the demand for goods is weak, and the support for spot goods is not good. In summary, it is expected that the ABS market will be mainly weak and consolidating in the short term.