In early February, the domestic ABS market experienced a volatile downturn, with spot prices for most grades being adjusted downward. According to the Commodity Market Analysis System of 100ppi.com, as of February 9, the average price of ABS sample products was 9,187.50 yuan per ton, representing a decrease of 1.74% compared to the beginning of the month.

Fundamental Analysis
Supply Level: Since February, the operating load in the domestic ABS industry has remained largely stable with minor fluctuations, showing an overall slight decline. The Tianjin Dagu facility halted operations for purging tasks, leading to a reduction in the industry's overall operating rate by approximately 3% to around 64%. Weekly average production fell below 140,000 tons. Polymer enterprise inventories continued to decline, standing at around 190,000 tons, maintaining a tight supply-demand balance in the market. Overall, the supply-demand dynamics in the ABS market are not prominently staged, with the supply side providing increased support for ABS spot prices.

Cost Factors: In early February, the prices of the three upstream raw materials for ABS rose initially but later retreated, weakening their impact on ABS costs. Among them, acrylonitrile followed the upward trend of upstream materials at the beginning of the month. However, the commissioning of Yulong Petrochemical's new acrylonitrile facility increased supply in the northern market. Coupled with the approaching Spring Festival, spot buying sentiment weakened, leading to a significant decline in the acrylonitrile market after the initial rise.

Butadiene prices showed a trend of retreating from high levels. Last month, relatively high crude oil prices strengthened bottom support. However, as the Spring Festival approached, downstream pre-holiday restocking concluded, weakening rigid demand support. Additionally, the industry's operating load remained robust during the holiday period, with expectations of inventory accumulation in the future. The looser supply-demand structure drove the market into a weaker consolidation phase. Nevertheless, low inventory levels and favorable external market dynamics are expected to limit the downside potential for styrene prices.

Styrene prices also retreated from high levels. Earlier, the resumption of domestic industry operations fell short of expectations, while overseas styrene facility maintenance increased. This led to a rise in inquiries and actual transactions for Chinese styrene exports, further reducing port inventories. However, the recent return of some facilities has improved supply. Moreover, the supportive effect of Middle East tensions on crude oil prices has gradually diminished, and raw material benzene has remained range-bound at high levels, leaving styrene fundamentals lacking further guidance. It is expected that the styrene market may continue its consolidation trend during the Spring Festival period.

Demand Aspect: In early February, consumption in ABS's major downstream sector, electrical appliance casings, did not show significant growth, and profitability improvements for terminal enterprises remained limited. With the Spring Festival approaching, pre-holiday restocking has largely concluded, and buyers have limited willingness to further reduce inventories. Market trading has gradually entered a bottleneck phase, although some high-priced orders were still executed. Currently, merchant inventories are not high, and both enterprises and merchants maintain firm pricing. Overall, demand-side support for the ABS market has leveled off.

Market Outlook
Before the Spring Festival, the domestic ABS market is expected to experience weak consolidation. Polymer plant operating loads remain largely stable with minor declines, maintaining a tight supply-demand balance in the market. The prices of the three upstream raw materials have retreated after an initial rise. Analysts from 100ppi.com believe that while the supply-demand imbalance in the ABS market persists on a macro level, strong bargain-hunting orders at the beginning of the year have alleviated production and sales pressures. With pre-holiday restocking largely completed and previous price increases being relatively significant, buyers' acceptance of current prices has declined. It is anticipated that the ABS market may enter a period of calm consolidation in the near future.