China's ABS Market Strengthens Ahead of Spring Festival on Supply Tightening and Cost Support

Key Highlights

• Stable ABS Pricing: Consistent pricing across brands, with LOTTE's ABS at ₹158,000/MT (Black) and ₹142,000/MT (Natural).
• Demand Surge: Pre-Spring Festival demand in China rises, driving spot price increases despite a slight 3%-7% drop in production.
• Production Adjustments: ABS operating rates have declined due to maintenance activities at several plants, impacting supply.
• Market Outlook: Analysts predict short-term stability in the ABS market, reliant on inventory dynamics and raw material pricing.

Price Overview: Current ABS Pricing Trends

• The pricing for ABS across different brands and grades remains consistent across multiple locations. 
• LOTTE's SD-0150 (Black, K2007) is priced at ₹158,000/MT across Delhi, Mumbai, Kolkata, Hyderabad, Ahmedabad, Chennai, and Ghaziabad. 
• LOTTE's SD-0150 (Natural) is priced at ₹142,000/MT across Delhi, Mumbai, Kolkata, Hyderabad, Ahmedabad, Chennai, and Ghaziabad. 
• TAITA's 5000W (Natural) is also priced at ₹142,000/MT across Ahmedabad, Mumbai, Chennai, Kolkata, Ghaziabad, Hyderabad, and Delhi. 

Demand & Supply Dynamics: Market Activity Ahead of the Spring Festival

• Before the Spring Festival in January, the domestic ABS market in China exhibited a positive trend, with spot prices of various grades increasing. On the supply side, the operating rate of ABS production declined by approximately 3% to 7% compared to early January, mainly due to reduced load at Tianjin Dagu's plant. 
• Consequently, the average weekly ABS production fell to around 125.25 ktons, while aggregate enterprise inventories dropped to 160 ktons. Though the overall market remains well-supplied, reduced inventory pressure and completed pre-holiday sales have supported higher spot prices.
• On the cost side, upstream feedstocks—including acrylonitrile, butadiene, and styrene—have maintained stable pricing, ensuring steady production costs. Acrylonitrile remains strong due to low inventory, while butadiene supply tightness continues, though it may soften with expected capacity expansion. Styrene initially rose but later stabilized as port arrivals increased, easing supply constraints.

Market Updates: Recent Plant Shutdowns and Production Changes

• LyondellBasell has shut its POSM plant in Channelview, Texas, impacting PO (325,000 TPA) and SM (760,000 TPA) production.
• CNCEC has shut its 300,000 TPA MEG plant in Tongliao, China.
• Zhejiang Petroleum & Chemical (ZPC) has shut its 2.4 million TPA PX plant in Zhoushan, China, for maintenance.
• Haoyuan has reduced operating rates at its 300,000 TPA MEG unit in Anhui, China, for catalyst replacement.
• Sinopec Yangzi PC has shut its aromatics units in Nanjing, China, affecting benzene (170,000 TPA), toluene (580,000 TPA), and xylene (750,000 TPA) production.
• Idemitsu Kosan has restarted its 210,000 TPA SM unit in Chiba, Japan, after maintenance since January 17, 2025.

Expert Opinion: Future Trends and Market Stability Predictions

• The ABS market is expected to stabilize. With ongoing stockpiling activity and continued policy support for household appliances, demand should remain firm in the short term. 
• However, post-holiday trends will depend on inventory restocking and raw material price fluctuations. Business analysts anticipate a stable market outlook, with prices maintaining recent gains before transitioning into a post-holiday consolidation phase.