ABS quotation continues high as strategy changed

In order to improve the profit, the petrochemical manufacturers have changed their strategy significantly after the festival. The low operating rate has given them the courage to support the price. Although the performance of downstream demand is not good, the market is still showing a volatile upward trend under the petrochemical’s firm offers. To the deadline, the prices of mainstream brands in Yuyao China Plastics City generally rise compared to the period before the festival.

The prices of mainstream brands in Yuyao China Plastics City are as follows：

High cost is one of theprice support factors

In terms of styrene, although the prices of international crude oil and pure benzene gradually climbed during the cycle, the downstream performance was poor, dragging down the upward pace of the market to a certain extent. The recent market is mainly more volatile.

Boosted by the high cost and the high outer disc, the atmosphere of the domestic butadiene market turns better, and production enterprises have significantly increased the quotations.

In terms of acrylonitrile, the downstream resumption of work after the Spring Festival lagged behind, and the demand support was weak. Fortunately, some production lines were suspended for maintenance, helping to offset the impact of weak demand. Coupled with tight supply in local regions, the price of acrylonitrile is holding to rise steadily.

Mainstream prices of monomers in domestic ports are as follows:

Firm offers from petrochemical manufacturers also boost ABS price

From the supply side, the price of styrene would remain high and volatile in the cycle. The pressure on the profit side is difficult to ease or eliminate. The offers from petrochemical manufacturers keep firm and the overall operating rate of the plants is also at a low level. The rhythm of the supply, therefore, is better than in the previous period. However, as the demand cools, there is no lack of profit-taking mentality among merchants on the floor.

From the demand side, the production of household air conditioners was 22.13 million units in March 2024, an increase of 25.2% year-on-year and 83.96% month-on-month. The refrigerator production was 8.37 million units, an increase of 8.4% year on year and 56.45% month on month; The production of washing machines was 6.44 million units, an increase of 5.4% year-on-year and 8.42% quarter-on-quarter. After the Spring Festival holiday, the production of home appliances increased significantly year-on-year and quarter-on-quarter, which also helped the spot market price rise.

In summary, the ABS market after the holiday has been singing all the way under the dual supporting roles of the cost end and petrochemical manufacturers. However, the contradiction between supply and demand is still the reef in the market, and industry insiders need to be cautious about it. For the market going forward, if the negative reduction operation of the major petrochemical manufacturers is still implemented in place and with the continuous price increase of styrene, the upside could still be triggered. If styrene falls sharply and the contradiction between supply and demand intensifies, the market may go down.