ABS Market Faces Weak Demand and Price Stability Challenges in Mid-August 2024

The ABS (Acrylonitrile Butadiene Styrene) market consolidated weakly in mid-August, and the spot prices were stable with small fluctuations in the Asian and US markets. In mid-August, the ABS market experienced subdued activity as supply, cost, and demand factors collectively pressured prices downward.

The Asian ABS industry saw a slight increase in production load compared to the previous period. Despite this, manufacturers' shipments remained average, with inventory levels continuing to rise, resulting in limited supply-side support for ABS spot prices in the region. On the cost side, the overall trend of ABS's three key upstream materials, acrylonitrile, butadiene, and styrene remained weak in mid-August, further eroding cost support for ABS prices. Acrylonitrile prices have been on a continuous decline, driven by oversupply and the ability of large producers to maintain operations due to profits from co-producing MMA products. The butadiene market also showed signs of weakness. The upcoming shipments may increase supply pressure, while downstream demand remains lackluster, as synthetic rubber producers maintain only minimal inventory replenishment due to squeezed profits. The styrene market saw a period of consolidation, with narrow price declines in pure benzene resulting in poor cost support. While port inventories have increased, and downstream demand has remained steady.

On the demand side, the ABS market has struggled with weak terminal demand since the beginning of August. Mid-month saw some home appliance manufacturers still on high-temperature holidays, keeping downstream factory load levels low. The slow recovery in terminal demand, coupled with weak stocking activities and sluggish goods circulation, has provided little support to the market, leading to a challenging environment for ABS prices.

In the mid-week of August 2024, the price of ABS in the US market exhibited a downward trend with the latest dip of 0.5%, due to low demand from the automotive and home appliance industry.  From the cost side, the feedstock Styrene prices were stable this week while decreasing crude oil costs. U.S. crude oil prices declined by over 1%, settling below USD 75 per barrel as the market continued to reverse gains made earlier in the week due to concerns over potential supply disruptions in Libya. West Texas Intermediate (WTI) October contract prices were assessed at USD 74.52 per barrel, down USD 1.01, 1.34%. Brent October contract prices were assessed at USD 78.65 per barrel, down 1.13%. The weak fundamentals in the export sector, coupled with ongoing supply-side pressures, suggest that the ABS market will struggle to find stability in the near term.

As per ChemAnalyst, the ABS market is anticipated to remain weak in the short term in the US and Asian markets. Meanwhile, U.S. crude oil inventories decreased by 800,000 barrels for the week ending August 23, while gasoline stocks fell by 2.2 million barrels, according to the Energy Information Administration. The key upstream materials have largely stabilized, providing only moderate support for ABS costs.