“The ABS market has been sluggish since the second half of the year, and 'Jinjiyinwang' is expected to fail. Downstream demand has led to oversupply, and at the end of October another 200,000-ton-a-unit plant was put into operation, bringing new pressure on the market. The current market price is almost equal to the year. At the low point, both manufacturers and traders are in a dilemma. "Marketers such as Jilin Yuanshun Chemical Trading Co., Ltd. Wang Junlong suffered a lot from reporters yesterday.
Outside the ABS also fell a piece. “Last week, the market price fell by nearly 30 US dollars (ton price, the same below), approaching the cost price of 1870 US dollars. The market situation of manufacturers is equally difficult and is in the same direction as the domestic market,†said Zhu Dangchang, the sales company of North China Petroleum Corporation.
The trend of upstream raw materials is mixed, and the market outlook will continue to be lower, and it is difficult to form a support for the ABS market.
Director Zhu said that since November, styrene has rebounded after falling. The market price once returned to a high of 13,000 yuan, and then it lingered around 12,900 yuan. However, as the favorable factors gradually digested, the domestic styrene is difficult to firm at high prices and will once again fall back.
The market price of acrylonitrile approached the cost, and manufacturers suffered a loss. Therefore, the price was very strong. The holders began to seal the market and the market price bottomed out. The entrants plundered the market and stimulated the market to go higher. However, the domestic overall spot inventory is high, the market volume is limited, and the price performance is high. The market outlook will still be low.
“The market for butadiene in Sinopec was substantially reduced by RMB 1,000 to RMB 14,800. After the price reduction window opened up, especially in the case of the influx of low-priced products from the external disk, the market did not find any signs of speculative positions. The middlemen believe that there is still some room for consolidation in the country. It is hopeless that butadiene will turn better after the market," said Zhu Zhuchang.
The sluggish demand is the fundamental reason that this year's ABS market is difficult to strengthen. Under the influence of unfavorable conditions such as the economic downturn, inflation, and real estate regulation, ABS, an important downstream automobile and home appliance industry, ushered in a more dismal year.
The first is the home appliance industry. For 43 A-share home appliance companies with comparable data, the inventory for the third quarter reached 43.734 billion yuan, while the inventory reported for the A-shares was 41.512 billion yuan. Despite the increase in sales volume in the third quarter, the fact that stocks have not declined, indicates that the effect of intensifying inventory removal by the household appliance industry is not obvious.
"A large amount of inventory tightens the capital chain, and companies must also pay high warehousing expenses for this purpose. On the other hand, the aging risk of household electrical appliances is also increasing the after-sales costs. The home appliances to rural areas policy will expire in January next year. Although the energy-saving subsidized air-conditioning array has been expanded again, the implementation effect is not expected and will not be too high, said Jilin Gome's home appliance sales manager.
The automotive market is slowing down. In September, domestic car sales were 1,671,400, a year-on-year decrease of 1.75%, and the monthly decline has been the first time since February of this year. According to the automotive industry sentiment index issued jointly by the Automobile Industry Association and the National Bureau of Statistics of China's Economic and Economic Monitoring Center, in the third quarter, the production and sales of automobiles grew steadily, and the industry boom was in the normal operating range. Affected by factors such as overcapacity, the auto industry is still in the de-stocking stage and its profitability is declining.
“The transcripts submitted by most car companies in the first half of the year are not optimistic, with only three of the country’s 24 major passenger car companies achieving the full-year sales target. As for the fourth quarter and next year, there are not many Fortunately, the positive growth of the auto market in the fourth quarter has been considered good.†said Zhang, a 4S shop manager in Jilin.
Sufficient supply, prices fell, manufacturers have to reduce production and rescue the market. At present, the average operating rate of ABS manufacturers has fallen by nearly 10% from last month, only 50%, and the daily output is about 4,305 tons. Some manufacturers even use inspections to avoid market risks.
For example, Taiwan Chi Mei lowered the operating rate of an ABS device to 70%; the plan, which was originally scheduled to increase the annual production capacity of the Zhenjiang plant to 150,000 tons in July, was postponed due to the sluggish market, and the operating rate was 60%. The Ningbo Unitization Plant's 150,000-tonne production facility for the New Year has not yet been put into production. Liao Tong Chemical (former Panjin Ethylene) has an annual output of 150,000 tons of ABS equipment, a total of two lines, one line to continue maintenance. The first phase of Jilin Petrochemical's annual production of 200,000 tons of ABS equipment produced qualified products by the end of October.
"For the ABS industry, it may be faced with reshuffling. The survival of enterprises with small scale and high cost will become increasingly difficult. At present, there is an apparent excess of abuses in domestic general materials, and transformation and development are imminent," said Wang Junlong.
It is understood that, as in China, some Asian manufacturers have begun to reduce production. It is reported that Styrolution will close its ABS plant with an annual output of 276,000 tons in Ulsan, South Korea, and maintain maintenance for three weeks from November to December. Its ABS device that restarts for nearly 20 days is expected to close in mid-November. Toray Plastics Japan plans to close its ABS production line with an annual output of 330,000 tons in Penang, Malaysia, and plans to overhaul it for one month or so.
However, at present, the ABS market has had little effect on reducing production and saving the market, and the downstream downturn is unlikely to improve. The market outlook remains predominantly bearish, and the low consolidation is almost certain.
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