In May, the domestic ABS market first fell and then rose, with most spot prices of various grades fluctuating. According to the Commodity Market Analysis System of Shengyi Society, as of May 31st, the average price of ABS sample products was 10625 yuan/ton, with a price level increase or decrease of -0.93% compared to early May.
Fundamental analysis

Supply level: In May, the load of the domestic ABS industry first increased and then decreased, with the overall load level rising from 65% at the beginning of the month to 70% in the middle of the month, and then falling back to 61% by the end of the month. The weekly average production has synchronously fallen back to 110000 tons. Although the inventory level of aggregation enterprises is still at a high level, it has been reduced to a certain extent, and the on-site supply is still at a relatively sufficient level. At the same time, the recent release of new equipment capacity by two companies still has a certain suppressive impact on the industry’s supply support, and there is still some supply pressure in the market. Overall, the supply side has shown some improvement in support for ABS spot prices.
Cost factor: In May, the upstream three materials of ABS rose and then rebounded, which improved the cost support for ABS. In terms of acrylonitrile, domestic supply gradually contracted in the first half of the month, and spot resources were limited. Coupled with the rapid rebound of export orders for multiple terminal products, enterprises locked in profits by stocking up, and factories quickly responded by raising spot prices. As downstream substantive demand is met, the upward trend is hindered. In the long run, there will still be new production capacity being gradually put into operation, so the market will fluctuate and fall at the end of the month.
The domestic butadiene market price rose in May and then fell back. Boosted by macroeconomic factors such as mid month tariffs, the atmosphere in the spot market has strengthened. Some units are undergoing unplanned maintenance, coupled with tight port supply, resulting in a tight supply of butadiene in the market. The butadiene market is heating up, and after the price rises to a high level, the trading atmosphere in the market begins to fade. The downstream synthetic rubber futures market weakened in the latter half of the year, with weak market demand. The concentrated arrival of goods at ports in East China has led to a return to loose supply, resulting in a significant drop in butadiene prices.
At the end of May, the domestic styrene market rose and then consolidated. Affected by the consensus reached in the high-level economic and trade talks between China and the United States within the month, foreign pure benzene followed the rise in international oil prices, coupled with accelerated destocking of styrene ports, and market sentiment quickly improved. In the future, there will be an increase in arrivals from the main ports in East China, coupled with sustained high supply from South Korea leading to significant pressure to reduce inventory, resulting in a downward shift in price focus. Secondly, the high inventory of styrene downstream and weak demand, coupled with the early completion of maintenance for some facilities, have further suppressed the rise in styrene prices due to increased supply. It is expected that the styrene market will operate weakly in the short term.
On the demand side: As we enter May, the load of downstream ABS factories in the ABS terminal has generally flattened, and the purchasing logic tends to focus on buying at the bottom and supplementing orders for urgent needs, resulting in a lack of new orders and slow flow of goods. In mid month talks between China and the United States, both sides reached an agreement to reduce tariffs, which is beneficial for the commodity market and significantly boosts the export market in areas such as small household appliances and consumer electronics at the macro level. The export orders of ABS terminal factories rebounded rapidly, and the load also increased accordingly, leading to a surge in on-site trading volume. At the end of the month, the macro positive factors gradually dissipated, and the liquidity of the supply source cooled down. In addition, the inventory position was high, and there was a large space for on-site turnover, so there was no tight situation on the supply side. Overall, there was a slight rebound in demand support for the ABS market in May.

Future forecast
The domestic ABS market fluctuated in May. The prices of the upstream three materials first rose and then fell, and the production load of the ABS polymerization plant decreased. The comprehensive support of the cost and demand sides is still acceptable. Business analysts believe that the suspension of tariffs between China and the United States in the middle of the month and the resumption of export windows have led to a surge in spot prices in the middle of the month. However, as the market continues to heat up, businesses are returning to a cautious attitude. At the end of the month, under the dual pressure of cost and demand, ABS market is expected to continue to consolidate in the short term.