China ABS Market Sees Volatile May Amid Supply Pressure and Export-Driven Mid-Month Rebound

Key Takeaways

• Price Variation in India
  Natural TAITA and LOTTE ABS prices ranged from ₹1,31,000 to ₹1,42,500 per MT, varying by city and product grade.
   
• Chinese Market Volatility
  ABS prices in China dropped early May but recovered to end the month slightly lower, reflecting market uncertainty.
   
• Supply and Inventory Pressure
  Chinese ABS production peaked mid-month but eased later; inventories remain high, keeping supply ample.
   
• Feedstock Price Fluctuations
  Acrylonitrile, butadiene, and styrene costs rose early in May but fell due to oversupply and weak demand.
   
• Trade and Capacity Impact
  Tariff relief between China and the U.S. boosted exports temporarily, but new ABS capacity plans and macroeconomic caution temper market outlook.

ABS Price Dynamics

• In the Indian ABS market, current prices vary by brand and location. Natural TAITA ABS (5000W) is priced at ₹1,31,000/MT in Ahmedabad and ₹1,34,000/MT in Chennai. 
• Natural LOTTE ABS (SD-0150) is being offered at ₹1,34,250/MT in Delhi, while the Black LOTTE ABS (SD-0150 K2007) variant is priced higher at ₹1,42,500/MT in Delhi. 
• In May 2025, the Chinese ABS market exhibited a volatile trend—declining initially before recovering later in the month. 
• As per the commodity market analysis system, the average price of ABS sample products stood at RMB 10,625/ton on May 31. This represents a marginal decrease of 0.93% compared to the beginning of the month.

ABS Demand and Supply Dynamics: Chinese Production Start Declining

• Supply Side: The ABS production load across China started strong in May, peaking mid-month at 70%, before tapering off to 61% by month-end. Despite overall weekly output falling to around 110,000 tons, inventory levels at polymerization plants remained elevated, though there was evidence of gradual destocking. 
• Market supply remained ample. Additionally, announcements of new ABS capacities from two producers placed pressure on market sentiment, suggesting ongoing supply overhang concerns.
• Cost Side: Upstream feedstocks—acrylonitrile, butadiene, and styrene—saw price increases early in the month, providing cost support, but subsequently fell back due to oversupply and weakening demand.
  
  1. Acrylonitrile: Saw early gains due to tightening supply and strong export orders but corrected later in the month as demand normalized and expectations of new capacities emerged.
  2. Butadiene: Prices surged mid-month on the back of unplanned shutdowns and tight port supply, only to fall sharply as imports increased and downstream demand weakened.
  3. Styrene: Benefited from improved macro sentiment and lower port inventories mid-month, but faced downward pressure later due to high inventory, weak demand, and resumption of production units.
  4. Demand Side: Downstream ABS processing plants maintained steady operating rates. Purchasing remained largely need-based with occasional bottom-fishing. Mid-month improvements in U.S.-China trade relations, particularly tariff easing, boosted sentiment. 
   
• This led to a rise in export orders from ABS terminals—particularly in consumer electronics and home appliances—spurring a short-term demand recovery. However, by late May, the momentum cooled, and liquidity weakened, resulting in an overall mild demand support for the month.

ABS Market News: China-U.S. Tariff Cuts Boost Exports

• Zhejiang Petroleum & Chemical (ZPC) is planning to shut its No.3 Butadiene (BD) Plant on 23rd June, 2025 for planned maintenance work. The Plant is located in Zhejiang, China with a production capacity of 250,000 Tons/Year.
• Styrene Monomer prices assessed stable at US$ 870/- per MT FOB Korea basis.
• ABS prices closed stable at €1700/MT and PET at €1000/MT FD NWE basis.
• Trade Relief: A key driver mid-month was the announcement of reduced tariffs between China and the U.S., which significantly boosted ABS exports and spot market enthusiasm.
• New Capacity: Market sentiment remained cautious due to the expected addition of new ABS production capacity from two domestic companies, increasing long-term supply concerns.
• Macro Weakness: Towards the end of the month, the impact of strong macroeconomic news faded, and the ABS market settled into a more balanced, wait-and-watch mode amid high inventories and mild demand.

Expert Opinion: Inventory and Demand Balance Out

• The ABS market in China is expected to continue a consolidative trend in the near term. While short-lived gains were observed due to export revival and feedstock cost support, these were offset by high inventories and cautious downstream buying.
• With both cost and demand factors losing steam by month-end, the ABS market may remain range-bound or slightly weaker in the short run.