Asian ABS Market Struggles Amid Imbalance Demand-Supply in Late September

In late September, Acrylonitrile Butadiene Styrene (ABS) prices across Asia have been showing a weak trend, driven by a combination of ample supply, stagnant upstream costs, and sluggish demand. The cost side of the ABS market has been marked by relative stagnation in upstream material prices in the last week of September 2024.

The Chinese market, once hopeful for a recovery in the traditional "Golden September" season, continues to grapple with underwhelming terminal demand and cautious trading activity. The ABS industry has seen its operating rate rebound, following the resumption of capacity after scheduled maintenance. Supply levels have remained stable, with the overall availability of goods exceeding demand. Despite partial stocking ahead of the upcoming National Day holiday, the market has been slow in digesting on-site inventory, which has remained elevated. The finished product inventory has seen a slight decrease. However, this reduction has done little to alleviate the high supply levels, providing only moderate support for the ABS prices.

The feedstock including Acrylonitrile, Styrene, and Butadiene, offered limited cost support in the ABS market throughout September 2024. Acrylonitrile prices have stabilized after an initial decline, with some improvement in spot trading activity. The overall market sentiment remained cautious, with no significant upward pressure anticipated in the near term. However, the feedstock Butadiene prices trending upward due to strong demand from the synthetic rubber market and pre-holiday stockings. In contrast, the Styrene market remained volatile. Although crude oil prices have rebounded, the lingering weakness in pure benzene prices has kept cost support for Styrene muted.

The anticipated peak in demand during September has yet to materialize. The post-summer recovery in downstream sectors of ABS, particularly home appliances, has been slower than expected. Although high-temperature holidays have ended for many manufacturers, their production levels are only gradually improving. Terminal ABS demand remained weak, and traders seem uncertain of market conditions and are hesitant to restock inventories in Asia. This has led to slower market circulation and further added to the already cautious outlook in the ABS market.

As per ChemAnalyst, the ABS market in Asia is expected to remain weak as the supply-demand imbalance is likely to persist. While upstream cost factors show no strong signs of a rebound, and supply remains abundant, demand from key sectors is unlikely to see significant improvement in the short term. The lackluster "Golden September" season, combined with bearish market sentiment, suggests that ABS prices will continue to face downward pressure in the coming weeks.