The ABS market may end sadly

In December, the domestic acrylonitrile-butadiene-styrene copolymer (ABS) market price began to bottom out after
hitting a new low in the year.
Up to now, the mainstream offer price of domestic sources in the East China ABS market is 10850~11650 yuan (ton price, the same below), up about
300 yuan from the end of November.

"In the future market, the release of new production capacity is superimposed on insufficient demand, and the foundation for the rise of ABS this time is not firm
.
Shrouded in bearishness, this year's ABS market may end sadly
.
Jinlianchuang analyst Chu Caiping made the above analysis
.

Overall supply increased

In mid-to-early December, Tianjin Dagu plant was temporarily stopped for maintenance unplanned, the market speculation atmosphere was strong, coupled with the ABS price fell to a low level, and there was a bottom entry into the market downstream, and the overall transaction was better
.
In addition, the annual sales task was basically completed, and some ABS petrochemical manufacturers stored a certain amount of control operations, resulting in a short-term tension in the market circulation and supply, driving the price of ABS to rise
slightly.

However, with the increase in the operating rate of the ABS industry, the favorable supply side has gradually weakened
.
From the current point of view, the average operating rate of domestic ABS units is 89.
81%, an increase of 5.
34 percentage points
from the previous month.
Guangxi Changke ABS plant was converted to production; The cleaning pipeline of the No.
2 production line of Jilin Petrochemical ABS plant was stopped for a short time, and production is currently resumed; The load of Zhenjiang Chimei ABS device increased to 890%; The load of Zhangzhou Chimei ABS equipment is maintained at about 70%.
Liaoning Kingfa ABS device load is about fifty percent; The remaining manufacturers maintained normal production
.

From the perspective of inventory, the current inventory of domestic ABS petrochemical manufacturers is 139,500 tons, down 06,500 tons
from the previous month.
After the announcement of the "New Ten Rules" for optimizing epidemic prevention, logistics and transportation have been accelerated, superimposed on some downstream and middlemen before the holiday, the pace of shipments of ABS manufacturers has accelerated, and the inventory level has decreased
.

"On the whole, Shandong Lihuayi Phase II 200,000 tons/year ABS plant has been put into trial production in late November, and the product may soon enter the market, coupled with the starting load of Liaoning Jinfa ABS plant will increase, other ABS petrochemical plants basically maintain full load operation
.
" The overall supply of ABS is not decreasing, the bearish sentiment is strong, and the ABS market is 'warm' Or quickly disperse, maintaining weak operations
.
Chu Caiping analyzed
.

Cost support weakened

The upstream raw material of ABS styrene has recently been affected by the speculation of individual device news, coupled with the recovery of crude oil prices, the market has a strong price mentality, and ABS cost support is strong
.

"However, at present, the styrene market is well supplied, the overall performance of the demand side is not good, the downstream buying interest is lacking, and the styrene market may be
deadlocked.
" Longzhong information analyst Wang Chunyan analyzed
.

Another raw material butadiene market first rose and then fell, mainly in small range
shocks.
Shenghong Refining did not release production as expected, coupled with the impact of bearish sentiment in the previous period, the inventory of downstream and some middlemen was low, and some just needed to replenish positions in stages, which once drove the spot price of butadiene higher
.
However, with the feeding of Shenghong refining and chemical equipment, the restart of Yangzi petrochemical plant, the recent planned restart of Zhejiang Petrochemical and Fujian joint maintenance equipment, and the increase in port inventory, the butadiene market may come under pressure
.

In addition, the raw acrylonitrile market as a whole does not fluctuate much
.
Fundamentals remain weak, and acrylonitrile prices have insufficient
momentum.

In view of the weakening of the cost side, the lack of support for the ABS market price, but to a certain extent, its cost pressure is reduced, and the risk of loss of ABS enterprises is not large
.

Downstream demand is sluggish

The automotive industry is an important downstream segment
for ABS.
Since the beginning of this year, the downward trend of automobile production and sales has been obvious, and the overall performance has been less than expected
.

According to official data, in November, China's automobile production and sales reached 2.
386 million and 2.
328 million units, respectively, down 8.
2% and 7.
1% month-on-month, and down 7.
9%
year-on-year.
In January ~ November, China's automobile production and sales reached 24.
628 million units and 24.
302 million units, respectively, a year-on-year increase of 6.
1% and 3.
3%, respectively, and the cumulative growth rate slowed down, narrowing by 1.
8 and 1.
3 percentage points
from January ~ October.

"The dividends of the new energy vehicle subsidy policy will expire, which will also affect
its production and sales.
" Wang Chunming, general manager of Shandong Ruiyang Chemical Co.
, Ltd.
, said
.

According to the Notice on the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles in 2022 jointly issued by the four ministries and commissions, the financial subsidies, local financial subsidies, vehicle purchase tax exemption and other policies implemented by the state will end
on December 31.
As the last year of the subsidy policy, the production and sales of new energy vehicles will be booming in 2022, which has greatly increased the amount of ABS by the ontology method, and its price was once higher than the price
of some emulsion ABS.
But this positive will soon be history
.

From the perspective of other downstream industries, the output of air conditioners, refrigerators, TVs, and washing machines this year has risen and fallen year-on-year and month-on-month, and the impact on the raw material ABS market is limited
.

In short, the downstream performance is not satisfactory, and the transmission to raw materials is also one of the
important factors that cause the ABS market to be greatly weakened.