Costs Approach RMB14,000: ABS Operating Rates Fall to a New Low for the Year

The ABS (Acrylonitrile Butadiene Styrene) market is experiencing significant challenges as production costs approach RMB14,000 per ton, driven by geopolitical tensions and rising crude oil prices. By late October, the theoretical production cost for ABS had surpassed RMB13,900 per ton, a level not seen since early spring. This increase is attributed to a short squeeze in the pure benzene market, escalating geopolitical tensions, and a rise in crude oil prices, with WTI crude exceeding $100 per barrel.

As a result of these cost pressures, ABS operating rates have dropped to their lowest point of the year. By October 28, operating rates had fallen to approximately 51%, reflecting the industry's struggle to pass on increased costs amid weak demand. Despite a slight increase in domestic ABS production in October, the ongoing cost challenges have led to unplanned production cuts, as manufacturers face prolonged financial losses.

Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.