2019 ABS Market Overview and 2020 Forecast
In Q4, 2019, ABS market prices were expected to fluctuate downwards and hover around RMB 12,100-12,800/mt. The lowest price appeared in late October, while the highest one appeared in early October. The quarterly average price was predicted to be RMB 12,505/mt, up 2.22% from Q3, 2019 and down 10.39% from Q4, 2018. The decreased feedstock prices, weak demand and soft economic data hit the ABS market and market sentiment of participants. Thus, ABS market prices moved downwards in October. After the National Day holiday, a few traders cut offers initiatively, and ABS EXW prices also declined slightly. Market prices of styrene, acrylonitrile and butadiene collapsed, hitting the ABS price from the cost side. Sellers still reduced their offers, while buyers held a thick wait-and-see stance waiting for a further decrease in ABS prices. In end-October, the speculation demand and rigid demand for ABS were weak, amid thick risk-avoiding sentiment.
Generally speaking, the supply-demand fundamentals will determine ABS prices. ABS is mainly used for automobiles, home appliances and other durable consumer goods, and the export volume of those products is favorable. Therefore, the macroeconomic trend and the development of international trade environment will affect the changes in the industry development environment, and they will also have a prominent effect on ABS prices. In addition, the international crude oil prices will also guide the sales prices of the products in the styrene industrial chain. Influenced by multiple factors, there will be many uncertainties in China’s ABS prices.
There will be risks in the global economy, and the Sino-U.S. trade friction will still exert some impacts on the market. Moreover, the demand from the automobile industry will remain tepid, and the growth of the demand from the home appliance industry will slow down. Besides, most market participants hold that China’s ABS supply will continue to rise. Therefore, it is estimated that China’s ABS prices will decline in 2020. Therein, the monthly average prices of medium and high-end ABS in 2020 will hover at RMB 9,800-12,500/mt, and the annual average price will be about RMB 11,000/mt, down RMB 1,600/mt or 12.82% Y-O-Y. In 2020, the highest ABS price will reach RMB 12,500/mt, down RMB 891/mt or 6.65% from the high level in 2019, and the lowest ABS price will be RMB 9,800/mt, down RMB 1,200/mt or 10.91% from the annual average level in 2019.
Influenced by the supply-demand fundamentals, macro environment, commodity market trend, feedstock market, etc., there will be many uncertainties in China’s ABS market. Accordingly, China’s ABS prices will still fluctuate frequently. Only the 150kt/a ABS unit at LG Chem Huizhou Petrochemicals is estimated to be put into operation at the end of 2020, so the capacity growth will slow down. Accordingly, the supply-demand imbalance will alleviate somewhat. With the projects at Zhejiang Petrochemical and Dalian Hengli Petrochemical put into operation, the supply of acrylonitrile, butadiene and styrene will rise, and the profit from ABS production will improve supported by the ample feedstock supply and relatively low feedstock prices. Moreover, given the sluggish global economy and the limited growth of the home appliance and automobile industries, it is estimated that China’s ABS prices will hover at lows in 2020.
Please click "Read more" for more information
For more information please contact us at
