Asian ABS Market Stagnates Amid Mixed Upstream Trends

Key Highlights

1. ABS Price Stability: Prices in India are uniform at ₹139,000/MT. In China, the average ABS price remains stable at 11,837.50 RMB/ton.
2. Supply Dynamics: Asian ABS plants increased production to 74% capacity, with inventory levels climbing to 170,000 tons.
3. Demand Trends: Downstream demand declined, with factory operations slowing. National subsidies for appliances may boost future demand.
4. Upstream Cost Impact: Acrylonitrile held steady, butadiene saw sharp price increases, and styrene rebounded slightly on crude oil recovery.

Stable ABS Prices Amid Mixed Market Signals

• As of January 8th, the price of ABS (Brand: Taita, Color: Natural, Grade: 5000W) is consistent across major cities in India, including Ahmedabad, Mumbai, Chennai, Kolkata, Ghaziabad, Hyderabad, and Delhi, at ₹139,000/MT.
• At the beginning of January, the domestic ABS market in China exhibited stability, with spot prices consolidating across various grades. As of January 7th, the average price of ABS sample products stood at 11,837.50 RMB/ton, remaining unchanged from the start of the month.

ABS Market Overview: Supply Up, Demand Weak

• The Asian ABS industry maintained a stable operating rate with a slight increase of 2%, reaching 74% load capacity. 
• Weekly production averaged 130,000 tons, while inventory levels climbed to 170,000 tons, indicating an abundant supply. 
• Overall, the supply side offered moderate support for spot prices.
• Downstream demand softened in early January, with terminal purchasing power declining. 
• Factory load levels dropped, and buyers were hesitant to stockpile inventory.
• However, the national subsidy policy for household appliances could bolster terminal product demand and facilitate inventory digestion in the coming months.

January ABS Market: Prices Hold Steady

• Upstream Cost Trends:
  1. Acrylonitrile: Maintained a sideways trend due to low inventory and tight supply, but news of resumed production at Zhenhai Refining and Chemical eased market tensions.
  2. Butadiene: Prices rose sharply due to tight spot market supply, but downstream resistance grew as prices escalated.
  3. Styrene: Rebounded slightly, influenced by recovering crude oil prices and steady downstream demand, though a consolidating phase is likely as supply constraints ease.
• Pre-Holiday Impact:
  The upcoming Spring Festival drove some pre-holiday purchasing, slightly improving the spot market atmosphere, though the overall impact remained limited.

Expert Opinion: Inventory Up, Demand Down

• The ABS market has entered a pre-holiday consolidation phase, with flat cost support from upstream materials and increasing inventory levels from polymerization plants. 
• Downstream demand is weak but could see some recovery with policy-driven support for household appliances. 
• Business analysts predict the market will remain weakly consolidated in the short term, with a rebound in market confidence expected post-holiday.