In early July, the domestic ABS market saw an increase at a low level, with some brands experiencing a narrow increase in spot prices. According to the Commodity Market Analysis System of Shengyishe, as of July 10th, the average price of ABS sample products was 11850 yuan/ton, a decrease of+0.21% from the price level on July 1st.

Fundamental analysis

Supply level: At the beginning of this month, the domestic ABS industry’s load was roughly 70% of the operating level at the end of last month. Within ten days, companies such as North Huajin and LG Yongxing will undergo varying degrees of maintenance and load reduction. However, due to the improvement in profitability and increased production in early June, the overall supply on site was abundant. Manufacturers tend to output confidence in their operations, resulting in a slight increase in product pricing. Merchants are offering price differentials and slightly increasing shipments. The overall inventory of the industry has been digested, and there is a speculative atmosphere in the market regarding the contraction of future supply. Overall, the supply side has increased its support for ABS spot prices.

Cost factor: In early July, the upstream three material trend of ABS may rise or fall, providing sufficient support for the cost side of ABS. The domestic market for acrylonitrile remains stagnant at a low level. The upstream raw material propylene market is fluctuating and consolidating, with average cost support. Downstream demand continues to be weak. With sufficient supply of goods on site and low profits. Acrylonitrile factories have a clear willingness to raise prices, and the focus of market transactions has limited changes. Most operators maintain the previous quotation as the main focus, and still maintain a cautious attitude towards the future market.

Recently, the domestic butadiene market has been on the rise, mainly due to the tight supply of goods in Shandong region, which has boosted the demand. Holders have a strong willingness to hold up prices. As prices rise, it becomes more difficult to shift profits downstream and the enthusiasm for entering the market weakens. The trading atmosphere on the exchange has cooled down to some extent, forming a generally sideways trend after the rise.

In early July, the market price of styrene slightly increased. The dominant factor is the significant digestion of styrene storage, while the low load of the unit leads to an expectation of further decrease in supply. Currently, styrene trading is active and the market momentum is good.

In terms of demand: Entering July, the main terminal demand for ABS is weak. Some home appliance manufacturers have closed down during the holiday, and the overall load position of downstream factories is low, with weak stocking operations and strong demand. Last week, traders were sheltered by producers and sold at high prices. The current market momentum has returned to calm, and the speed of goods circulation has slowed down. Overall, the demand side has not provided good market support.

Future Market Forecast

In early July, domestic ABS prices showed a narrow range of upward movement. The overall increase in upstream three materials is relatively small, and the cost support for ABS is generally strong and stable. The ABS polymerization plant is operating steadily with a slight decline, and there is ample supply of goods on site. There is an expectation of a slight contraction in future supply, but based on the overall production capacity loss, the changes in supply pressure may be limited. The demand side has weak demand, and the market trend is showing in the off-season, with weak trading. In summary, it is expected that the ABS market will maintain a consolidation trend in the short term.

According to the Commodity Market Analysis System of Business Society, as of July 9th, the average price quoted by domestic industrial grade 85% formic acid enterprises was 2680 yuan/ton, a decrease of 8.38% compared to June 9th.

Cost side: The domestic methanol market is mainly characterized by weak fluctuations and overall sufficient supply, resulting in a decrease in capacity utilization. The supply side of methanol is influenced by favorable factors.

Supply and demand side: On the supply side, the main manufacturers of formic acid are producing normally, and the market circulation of goods is relatively sufficient. On the demand side, the downstream purchasing atmosphere of formic acid needs to be improved, and the transaction orders are limited. Overall, both supply and demand have no positive support for the formic acid market.

Business Society formic acid analysts believe that the current formic acid market has sufficient supply and weak downstream demand. It is expected that in the short term, the formic acid market may continue to consolidate weakly, and more attention needs to be paid to downstream market demand.

Recently (July 1st to July 8th), the market price of butadiene rubber in East China has narrowed down. According to the Commodity Market Analysis System of Business Society, as of July 8th, the market price of butadiene rubber in East China was 15280 yuan/ton, a decrease of 0.20% from 15310 yuan/ton on July 1st. Narrow range consolidation of high prices for raw material butadiene; The production of butadiene rubber continues to remain low; Downstream tire production has been generally stable in recent days, but overall inquiries are cautious and slightly resistant to high priced sources. The futures of butadiene rubber have consolidated at a high level, and market trading is flat.

Recently (July 1st to July 8th), the price of butadiene has stabilized at a high level, and the cost support for butadiene rubber remains strong. According to the Commodity Market Analysis System of Shengyishe, as of July 8th, the price of butadiene was 13725 yuan/ton, an increase of 0.18% from 13700 yuan/ton on July 1st.

Recently (July 1st to July 8th), the production of domestic butadiene rubber plants remained at a low level, and as of July 7th, the production of domestic butadiene rubber was around 60%.

Demand side: Downstream tire production is temporarily stable, with demand facing strong support from the butadiene rubber market. Downstream inquiries are resistant to high priced sources, and the price of butadiene rubber is consolidating at a high level. As of July 7th, the operating load of semi steel tires for domestic tire enterprises is around 790%; The operating load of all steel tires for tire enterprises in Shandong region is about 6.2%.

Market forecast: From a fundamental perspective, analysts from Business Society believe that the price of raw material butadiene is still at a high level, and the cost support for butadiene rubber is strong; The production of butadiene rubber remains low, and the market supply is tight; Recently, downstream tire companies have temporarily stabilized their production, but there is still a fear of high prices for butadiene rubber. Overall, the butadiene rubber market has remained strong in the near future under the support of cost and low production. We still need to pay attention to the downstream stocking situation in the future.

According to the commodity market analysis system of Shengyishe, the price trend of acetic acid in June first rose and then fell. As of June 30th, the price was 3080 yuan/ton, which was a decrease of 70 yuan/ton compared to the beginning of the month’s acetic acid price of 3150 yuan/ton, with an overall decrease of 2.22%.

As of the end of the month, the price details of acetic acid market in various regions of China in June are as follows:

Region/ June 3rd/ June 14th/ June 28th

South China region/ 3125 yuan/ton/ 3175 yuan/ton/ 3100 yuan/ton

North China region/ 3150 yuan/ton/ 3300 yuan/ton/ 3100 yuan/ton

Shandong region/ 3150 yuan/ton/ 3350 yuan/ton/ 3080 yuan/ton

Jiangsu region/ 3075 yuan/ton/ 3125 yuan/ton/ 2955 yuan/ton

Zhejiang region/ 3175 yuan/ton/ 3225 yuan/ton/ 3055 yuan/ton

The acetic acid market rose first and then fell in June. In the first half of the month, the main factories on site experienced frequent equipment failures, resulting in a reduction in market supply. The manufacturers had a positive attitude, and the price of acetic acid remained strong and rising; With the restoration of maintenance equipment, the mentality of manufacturers has weakened, coupled with a wait-and-see attitude of downstream and traders, the market trading atmosphere is weak. In the second half of the month, acetic acid manufacturers voluntarily lowered their prices. Later, as the supply of acetic acid in the market increased, manufacturers showed a clear intention to reduce inventory, and acetic acid prices continued to decline.

The methanol market on the raw material side is operating weakly. As of June 30th, the average price in the domestic market was 2554.17 yuan/ton, a decrease of 7.51% overall compared to the beginning price of 2761.67 yuan/ton. The overall supply of methanol in the market is sufficient, with downstream on-demand procurement being the main focus. The receiving sentiment is weak, and the market trading is poor. The weak consolidation of methanol prices is the main trend.

Market forecast: Business Society analysts believe that currently, many acetic acid enterprises are operating smoothly, with sufficient market supply. Enterprises are actively shipping, while downstream buyers are not very active. The market mentality is mainly wait-and-see, with limited on exchange trading. It is expected that the acetic acid market will be weak and stable in the future, with narrow price fluctuations. Specific attention will be paid to downstream restocking in the future.

According to the Commodity Market Analysis System of Business Society, from June 24th to July 1st, the domestic market price of butadiene increased from 13625 yuan/ton to 13700 yuan/ton, with a price increase of 0.55% during the cycle. The price of butadiene in the market fluctuated narrowly this week, with a weak trend in the East China region. This is mainly due to the weak trend in the downstream rubber industry. Affected by weak demand, prices in the East China region have weakened. Currently, the self pickup price in the East China region is at 13100 yuan/ton, a decrease of about 100 yuan/ton from last week. There are still some essential purchases in the downstream of Shandong region this week, but the overall transaction atmosphere is also weak, with market prices at 13600 yuan/ton, basically unchanged.

Cost side: During this cycle, crude oil prices have risen. On the one hand, the tense geopolitical situation has resurfaced supply risks, and the supply and demand situation is favorable for the oil market. On the other hand, the Chinese economy continues to rebound and improve, coupled with the arrival of the peak oil consumption season in North America, strongly supporting oil prices. As of June 28th, international crude oil futures closed lower. The settlement price of the main WTI crude oil futures contract in the United States was $81.54 per barrel, a decrease of $0.20 or 0.2%. The settlement price of the Brent crude oil futures main contract was reported at $85.00 per barrel, a decrease of $0.26 or 0.3%.

Supply side: The listed price of butadiene for various sales companies of Sinopec remains stable at 13800 yuan/ton. Fujian United and Zhejiang Petrochemical Unit 2 have not been restarted, and Dushanzi Petrochemical has shut down for maintenance. The comprehensive operating rate in China has not changed much this week, and the supply of butadiene is relatively stable.

Demand side: The downstream synthetic rubber market continued to weaken this week, but overall rigid demand support still exists. With the high volatility of raw material butadiene prices, some downstream entered the market for procurement, but overall transactions were biased towards rigid demand, resulting in insufficient market support and weak operation of the butadiene market.

On Friday, June 28th, the external market of butadiene remained mostly stable, with South Korea FOB trading at $1545-1555 per ton, unchanged; China CFR report 1575-1585 USD/ton, unchanged; European butadiene FOB Rotterdam closed at $1200-1210 per ton, with an increase of $30 per ton; FD Northwest Europe closed at 1075-1085 euros/ton, unchanged.

Market forecast: The overall supply of butadiene is expected to remain stable this week, with some cargo arriving at ports in the future. The market expects a slightly loose supply in the future. In terms of demand, downstream synthetic rubber enterprises have had weak demand recently, which has led to insufficient market support and an overall weak atmosphere in the spot market. Overall, the supply and demand side of the butadiene market is relatively weak, but the external prices remain strong, which provides some support for the market atmosphere. Based on the above, butadiene analysts from Business Society predict that the domestic butadiene market will maintain a high and volatile trend in the short term, with a focus on the arrival of cargo at ports in the future.