Low demand in the off-season
July is the traditional off-season of ABS, and the sluggish demand has constrained the market. However, this year's ABS market is uncharacteristically. Since mid-July, it has begun to deter and rebound.
The industry believes that there is room for rebound in the ABS market, but as demand has not improved, the risk of falling prices has been accumulating.
Strong cost
Wang Chunming, general manager of Ruiyang Chemical Trading Co., Ltd. said that the raw material styrene plummeted in June, the ABS factory and social stocks were at a high level, and the Sino-US trade war warmed up, causing the price to fall rapidly, falling to 15,100 yuan in mid-July, a decrease of 7.93. %. However, since mid-July, the domestic ABS market has started to rise, with a rebound rate of around 300 yuan.
From the perspective of the market outlook, there is still room for improvement in the ABS market. The first is that the cost side is stronger, the profitable space of manufacturers is compressed, and the willingness of enterprises to increase their prices.
It is understood that last week, East China styrene closing price of 11,550 yuan, up 900 yuan, up 8.45%, early July; East China acrylonitrile closing price of 18,500 yuan, up 1800 yuan, an increase of 10.78%; Yuan, up 2,200 yuan from the beginning of July, an increase of 19.47%. ABS's three major raw materials oscillated higher, difficult to fall back, so that the theoretical profitability of ABS companies continues to narrow, providing support for the current market.
Supply reduction
Not only that, the overall operating rate of the ABS industry in the near future is as high as 95%. LG Huizhou, Tianjin Daxie, Zhangjiagang Shengyuao, LG Yuxing, Daqing Petrochemical, Jilin Petrochemical, Ningbo Taihua and other devices are fully loaded. But some enterprises in the later period have overhauled The plan will reduce the supply.
According to Zhang Xu, manager of Baoyuan Chemical Trading Co., Ltd., a large factory in East China plans to overhaul for a week. At the end of July, Daqing Petrochemical will start a one-month parking inspection. In addition, some enterprises also have a negative plan in August. The series of overhaul news has stimulated the news, and the ABS market is hard to cool down.
In addition, the continued depreciation of the RMB led to an increase in the cost of ABS imports. On July 30, the central parity of the RMB against the US dollar was reported at 6.8131, 189 basis points, the lowest since June 27, 2017. Wang Chunming believes that the cost of imported goods is high. No, it will affect the number of ABS imports, reduce the sales pressure in the domestic market, and form a positive for the market.
Low demand
However, demand is difficult to boost, becoming a good stumbling block to the ABS market.
The home appliance market is currently in the off-season, and the procurement of raw materials remains low. This is the biggest negative for the ABS market. Statistics show that from January to May this year, the total output of household refrigerators in China reached 32.686 million units. In the first five months of 2017, The output of household refrigerators in China was 39.496 million units; in the same period of 2016, the figure was 38.025 million units. Industry insiders said that the rapid growth of the refrigerator industry has become a past tense, and the market is basically based on inventory reduction. In addition, 6~8 Month is the off-season of production, the purchase of raw material ABS in this field is getting lighter, and it is difficult to form a support for the market.
Weak demand is also a long-standing crisis in the color TV industry. Fan Zhijun, vice president of Suning Retail Group, believes that color TV is being marginalized in the user's family, from the symbol of economic strength, to the family entertainment center, to the process of living room decorations. The CR8 index of the color TV industry dropped from 85% in 2013 to 79% in the first half of 2018. Zhu Yuanyuan, deputy general manager of Aowei Cloud's Black Power Division, predicted that the color TV industry's sales this year will be 159.7 billion yuan, down 2% year-on-year. 4. Downstream demand is weakening, and raw material ABS is bound to be affected.
'Traditional production off-season is coming, high temperature, heavy rain and environmental inspections all restrict downstream construction. Due to the relatively light demand side, the rebound space and intensity of the ABS market are open to question.' Zhang Xu said.