[Industry Focus]：ABS prices fall sharply in 2022, prices fall back to two years ago

ABS prices in 2022 fluctuated at the beginning of the year, reaching their highest point this year. After 15250 yuan/ton fell sharply on April 6, bottomed out at the end of August and fell back to this day after reaching a range high in early October. As of November 30, the price of ABS was 11800 yuan/ton, down 20.54 percent for the year, and the overall operation was weak, down sharply from the high in 2021, and the price of ABS has now fallen two years ago.

2022 ABS price movements are divided into four main phases:
Phase I: Oscillation Operation Phase. ABS at the beginning of the year, the price of 14850 yuan/ton. As of April 6, the annual high was 15250 yuan/ton, up 2.69 percent. At the beginning of the year, downstream companies were slow to resume work after the holidays, with long and short factors alternating rapidly and spot prices fluctuating. By the end of February, demand in the major downstream home appliance industries was delayed and ABS trading in the market improved. In addition, due to the impact of the European situation, crude oil prices rose at a high level, a variety of raw material products gradually strengthened, multi-party positive pull ABS price fluctuations.
Phase II: A sharp decline. ABS prices fell 23.28 percent from 15250 yuan/ton on April 6 to 11700 yuan/ton on August 31. At this stage, Liaoning Bora 600000 tons/year plant has been put into operation, and Lejin Huizhou's production capacity has increased to 450000 tons/year. In addition, in August, Taiwan Chemical, Jihua, Jianghai and other devices increased load, domestic supply is abundant, supply side pressure. In addition, due to the impact of the industry's off-season, demand support is insufficient. Due to favorable fundamentals, it is difficult to find, causing the price of ABS to fall in the past five months.
Phase III: Peak season recovery phase. As of October 10, ABS prices rose to a high of 13100 yuan/ton compared with 11700 yuan/ton at the end of August, up 11.97 percent. The traditional demand season is superimposed, and the downstream demand is large. At the same time, the upstream three material raw material prices are strong, together to promote a sharp rebound in the ABS market.
the fourth stage: the fall stage. As of November 30, the price of ABS was 11800 yuan/ton compared with 13100 yuan/ton on October 10, a decrease of 9.92. The range was mainly affected by the decline in demand at the end of the peak season, including the main terminal home appliance industry, downstream factory ABS enterprises continued to start high, supply pressure is difficult to solve, ABS back before the increase.

, overall, the 2022 ABS price trend is mainly affected by the following aspects:

1. Industry new production capacity concentrated rapid expansion
In recent years, China's ABS in the domestic total production capacity increase in the background, the industry continues to be in a long-term expansion cycle, ABS supply side pressure, price level decline.
According to the commercial agency, new capacity in 2022 is concentrated in the second half of the year. In the first half of the year, Lejin Huizhou's 150000-ton/year production line was upgraded to 450000 tons/year. In the second half of the year, Liaoning Baolai 600000 tons/year production line has been completed, Shandong Lihuayi 400000 tons/year production line and Zhejiang Petrochemical 400000 tons/year production line will be put into operation by the end of the year. The total domestic ABS production capacity is expected to increase by 3.5 million tons/year, and the supply-side pressure increase is obvious.

2. Inventory stability digestion rigid demand toughness
ABS home appliances, automobiles, office equipment, etc. are the main downstream consumer industries. In the ABS2022 year, domestic enterprises, except for the concentrated inspection and repair in July, have a load of more than 80% in the rest of the month, and have started work of more than 90% in four months of the year. ABS production can be said to be making great strides forward. Although downstream starts were delayed after the Spring Festival, demand continued to repair and release around March, and ABS demand support gradually emerged. However, in the latter part of the traditional peak season, a batch of downstream inventory forces of "Golden Nine and Silver Ten" ABS pushed spot prices to stop falling and rebound. In addition to the two concentrated trading volume ranges, domestic rigid demand also showed strong resilience, relatively effectively digesting such a high level of production. The total annual inventory remained at 172600 tons, and the inventory was further consumed in the second half of the year.

3. Raw material acrylonitrile long-term weakness ABS market blocked
As of November 30, the spot price of domestic acrylonitrile was 10500 yuan/ton, down 27.88 from 14560 yuan/ton at the beginning of the year, with a large decline at the beginning of the year and in the middle of the year. This year, acrylonitrile is also affected by industry expansion and high load. At the beginning of the year, due to the high start of equipment, Lihua Yixin equipment was put into operation, the supply side was under pressure, and the market declined rapidly. In the second half of the year, the supply of raw material propylene increased, market competition intensified, crude oil prices were weak, propylene prices fell all the way, and the unfavorable acrylonitrile market fell sharply in the middle of this year. ABS support is not good.

due to the 2022 ABS expansion is obvious, and concentrated at the end of the year. If each December. ABS If the new production line is put into operation on time, the consumption speed of the terminal enterprise will be difficult to follow up. At that time, the stage of overcapacity will deepen and supply pressure will inevitably reach its peak. At present, the US dollar continues to strengthen, international crude oil and upstream are expected to continue to fall, and ABS cost support is likely to continue to weaken. In addition, the construction of terminal enterprises at the end of the year tends to decline. To sum up, it is difficult for ABS to find favorable fundamentals in the short term, and the market may fall in the near future. In the long run, ABS in order to find a new balance between supply and demand, the price center of gravity or shock down.