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Looking Back At Domestic ABS Market In 2018
- Jan 11, 2019 -

In 2018, the domestic ABS market showed a downward trend of turbulence. Taking Jilin Petrochemical 0215A in Yuyao market as an example, the price range was 12600-16500 yuan/ton.

First Quarter (January-March): The History of Continuous Drops and Falls

In view of the sharp drop in the domestic ABS market after the Spring Festival of 2017, the enthusiasm of the downstream stock reserve before and after the Spring Festival of 2018 is not as good as expected. Although ABS petrochemical factories control sales to limit the market decline, their bearish sentiment towards the market after the Spring Festival does not diminish. With the approaching of the Spring Festival, downstream work and holidays have been suspended one after another, and the volume of transactions has been shrinking significantly, and the operators are not interested in fighting, waiting for the arrival of the Spring Festival The bargaining centre of gravity was shaking down. Until the announcement of the preliminary anti-dumping ruling results of styrene, the ABS market appeared a tentative rally after the Spring Festival. Due to over-hype, the announcement of the preliminary anti-dumping ruling results of styrene did not make the ABS market continue to rise. After a brief rally in late February, the sharp fall followed. Raw materials, especially styrene and acrylonitrile, have weakened sharply. In addition, downstream construction has not recovered well after the Spring Festival. ABS manufacturers are weak in shipment, inventory has gradually climbed to a high level. The spread of bad news has aggravated the pessimistic atmosphere of the market. Businessmen have let profits go one after another, and the market has fallen rapidly and deeply. They have reproduced the market prices of the same period in 2017.

Second Quarter (April-June): After a successful counter-attack in March and May, it fell.

Influenced by the sharp decline in inventory, raw material styrene magic reappearance, crazy pull-up, once a high 14500 yuan/ton in the plate, coupled with acrylonitrile also showed a sharp rise trend, leading to a substantial increase in ABS theoretical production costs. In addition, in May, Jilin Petrochemical entered the overhaul period, China Petroleum Corporation in major regions rose significantly, good incentives, ABS petrochemical manufacturers have pushed up prices, driving up the market speculation atmosphere, trading. The pitching rhythm has improved. With the rising price of ABS market, high price conflicting sentiment upstream, slow purchasing rhythm, and the end of Jilin Petrochemical overhaul, ABS inventory rose again. In addition, raw material styrene plummeted and butadiene declined, which deprived ABS market of cost support. Businessmen became bullish, low-price delivery and stop-loss operations increased, further dragging down the market focus. Despite the publication of the final anti-dumping ruling on styrene, it has no impact on the ABS market and the weak trend is difficult to improve.

Third Quarter (July-September): N-type trend shows the main tone of stalemate and slow decline

In the third quarter, domestic ABS manufacturers'inventory remained at a high level, coupled with the poor trend of raw materials, price reduction operation remained the mainstream. In addition, in the off-season of traditional production, high temperature and rainstorm affected downstream construction. Businessmen were more pessimistic, and low-price transactions continued to emerge. By mid-July, the focus of market negotiations was close to the previous low level. With the upstream styrene, butadiene and acrylonitrile showing an upward trend, ABS production costs have risen, some plant overhaul or production reduction news came frequently, plus after a long period of decline, downstream and intermediaries'bottom-reading mood has become strong, and so on, stimulated by good stimulation, ABS manufacturers continue to raise the delivery price, turnover volume is obvious. However, despite the upward trend of raw materials, ABS production costs remain high, but affected by the Sino-US trade war, in the "golden nine" traditional production season, downstream orders are not expected, coupled with high inventory of domestic air-conditioning enterprises, production reduction operations have emerged, ABS supply digestion is slow, circulation stock accumulation to a high level, merchants shipment pressure, since mid-August. The upside-down operation became normal, forcing ABS enterprises to sell at a lower price.

Fourth Quarter (October-December): Panic is constantly refreshing as a result of a sharp fall

The return of the National Day holiday, part of the downstream market replenishment, for the domestic ABS market brought some warmth, the focus of discussion slightly upward. However, with the pressure of bad news on the periphery and the sharp fall of raw materials such as styrene, butadiene and acrylonitrile, the inventory of ABS production enterprises continues to rise, price reduction operations come in succession, the panic in the field intensifies, businesses sell at low prices, the bargaining center keeps falling, and new lows refreshing in the year. However, with the good news from the G20 in early December stimulating commodities to explode, downstream purchases to market, ABS petrochemical manufacturers orders rose rapidly, inventories fell rapidly, ABS market stopped falling slightly rebound. However, the good times are not long, downstream demand follow-up is weak, market fatigue is becoming more and more obvious, but the decline of tight support is limited.