PS, EPS and ABS Prices May Shift into Volatility
Introduction: Recent price trends in the styrene chain have shown some divergence, with prices moving inconsistently. PS and EPS prices experienced phased increases, while the ABS market performed relatively weakly. In the short term, influenced by multiple factors including cost floor support and a weak supply-demand structure, the PS, EPS and ABS markets may exhibit a volatile trend.
Costs Fell Then Rose
Recently, price trends within the styrene chain have shown some divergence, with prices moving inconsistently. The upstream styrene market, disturbed by factors such as new plant commissioning, delayed maintenance, potentially high benzene imports, and sharp price increases in Europe and America, showed a trend of falling first and then rising. As the main feedstock for PS, EPS and ABS, the price of upstream styrene continued to decline. Although the price of PS, EPS and ABS also fell, their market performance still showed some differentiation due to changes in supply and demand and other disturbances.
Although styrene prices fell then rose, acrylonitrile average price increased narrowly, and the butadiene market stopped falling. The overall cost end showed a range-bound trend, lacking strong unilateral guidance. Coupled with factors like seasonal demand weakness and sustained wait-and-see sentiment among market players, the ABS market continued its weak trends recently, with mid-to-high-end grade prices continuing to decline. The PS market stabilized and rose, but the average price decreased slightly. This was mainly due to reductions in general material supply in East China, combined with subsequent strong gains in the styrene futures market. Influenced by cost trends, the EPS market showed a pattern of falling first and then rising.
Differentiated Changes in PS, EPS and ABS Operating Rate
This week, the weekly operating rates of the PS, EPS and ABS industries showed slight differences, with ABS and PS industry operating rates increasing, while only the EPS industry operating rate decreased. However, there is no significant spot supply shortage overall. In the ABS industry, one of North Huajin’s production lines restarted, alongside minor fluctuations at other local plants, leading to a slight increase in the overall industry operating rate. The PS industry saw its operating load increase this week, supported by resumed production after maintenance and slight load increases at a few lines. In the EPS industry, as demand for building insulation continued to shrink, some enterprises were not active in operations. Some plants in Northeast China, Northwest China, North China, and East China reduced loads or even underwent short shutdowns, causing the overall industry operating rate to continue declining.
Divergent Trends in PS, EPS and ABS Industry Profits
This week, profits in the styrene and downstream PS, EPS and ABS industries were mainly concentrated in the downstream segments, with the PS industry’s profitability continuing to improve. During the week, feedstock styrene prices fell first and then rose, while the supply of some general-purpose transparent PS and HIPS resources phased tightened. PS prices rose slightly and then stagnated, leading to a widening price spread and increased profits. In the latter part of the week, styrene prices strengthened, and PS prices followed the uptrend, but the increase was less than that of the feedstock, causing profits to shrink slightly. However, the weekly average profit still showed a small overall increase. In contrast, the weekly average profits in both the EPS and ABS industries declined compared to last week. The ABS industry, burdened by inventory accumulation pressure, saw ABS plants mainly cutting prices, with declines greater than the reduction in costs, worsening the industry’s loss situation. For EPS, as demand continued to shrink and the sustainability of new orders faced repeated obstacles, and price fluctuations did not completely synchronize with the feedstock end, the price spread between the two narrowed slightly.
PS, EPS and ABS Market May Experience Range-Bound Volatility
The upstream styrene market may face resistance to sustained sharp increases, but its bottom support role should not be overlooked. Coupled with continued pressure for significant improvement in supply and demand, risk aversion among players is unlikely to dissipate quickly, and the sustainability of new order volume may lack strength. Under the influence of multiple factors, the PS, EPS and ABS market may transition into a volatile trend in the short term, with the weekly average price expected to fluctuate by about RMB 50-100/mt.
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