PS/ABS/EPS: Inventory Showed Different Trends amid Traditional Demand Slack Season
In August, some PS/ABS/EPS producers controlled their output and the downstream consumption slowed down amid the traditional demand slack season. The overall inventory remained at a relatively high level.
In August, with the traditional demand slack season and high temperature, the overall downstream demand was sluggish. The PS inventory increased first and then declined. That of ABS trended down notably, while that of EPS fluctuated within a narrow range.
As of August 26, the PS inventory index was 84.15, down 3.12 from July 30. In H1, China’s PS operating rate was at a low level, so the supply was tight and the inventory showed a downtrend. Later, with the profit turned from negative to positive, the operating rate improved notably. Meanwhile, the downstream operating rate trended down due to the high temperature. Therefore, the inventory rebounded slightly.
As of August 26, the EPS inventory index was 51.65, up 0.19 from July 29. On the one hand, purchases were limited in H1 amid falling prices, so the sales were slow. On the other hand, the rising prices improved the purchases and the sale accelerated.
In August, the ABS inventory index declined. As of August 25, it was 79.25, down 7.75 from July 30. From July to H1 August, producers lowered their operating rates and some conducted pre-sales in July, so previous orders were delivered in August and the overall inventory declined.
In September, the operating rate is expected to increase limitedly. The inventory will be mainly affected by the downstream demand. As for ABS and PS, it will be the traditional demand peak season in September. Currently, the overseas demand lacks momentum to rise and China’s domestic demand is average. The overall downstream operating rate may improve limitedly. Therefore, the fundamentals may trend weak. As for EPS, with the upcoming demand peak season in September, the demand from northern building insulation market will improve. However, some newly added units are expected to come online, so a cautious and wait-and-see sentiment may be seen.
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