ABS Price Fluctuated Upwards in March
In March, the ABS price showed a N-shaped trend, fluctuating frequently, mainly due to the changing crude oil prices, demand and market anticipation. Before March 8, as the crude oil prices rose greatly, the ABS price was pushed up to a yearly high. The prices of some grades were over RMB 15,000/t. However, from March 9, the price fluctuated downwards as the demand recovered limitedly and the crude oil prices dropped greatly. Meanwhile, the transportation was limited in South China (Shenzhen, Dongguan), East China (Jiangsu, Shanghai) and North China (Shandong, Hebei), leading to a growing pessimistic and risk-avoiding sentiment. Around March 18, the ABS market price was pushed up by the rising crude oil prices.
In Q1, the ABS price was greatly affected by the prices of crude oil and styrene. Meanwhile, the demand recovered slowly. The operating rates at medium and small-sized downstream enterprises were not high while those at large-scale ones were relatively stable.
In Q1, the main price drive was cost, and the downstream demand recovery was slower than expected. Therefore, the increment in the ABS price was smaller than that in the cost. In the short and medium term, the price will likely fluctuate within a certain range. The main price influencing factors are listed as follows:
Bullish factors:
1.The demand will recover with large-scale home appliance industry to enter the demand peak season.
2.The crude oil prices will fluctuate at highs and will not decline much.
3.The import volume will decline Y-O-Y due to the high overseas prices.
4.Shandong Haijiang Chemical, FCFC and Chi Mei will take overhauls.
Bearish factors:
1.The ABS profit will perform well, and the price will be flexible.
2.The ABS inventory stayed at a high level in H2 March. Therefore, the demand increment will be limited and the demand recovery in some areas will be curbed.
Currently, the demand both at home and abroad is sluggish, so the demand increment will be limited. As for the supply, more unit maintenance will be seen in April. In addition, the crude oil price will fluctuate frequently, which will exert certain impact on the price. In the following three months, the ABS price will fluctuate at highs first and then move down, mainly affected by the fundamentals. In April, the demand is expected to recover, while the supply will remain high despite the unit maintenance. Therefore, the price will increase limitedly. Form May to June, the price will likely trend down with the replenishment demand cooling down.
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