ABS Market Experiences Extreme Conditions in First Half as Supply-Demand Pattern Faces Deep Adjustment

In the first half of 2026, the ABS industry experienced extreme market conditions amid a turbulent geopolitical environment, with unit shutdowns and production cuts becoming the norm. The interplay of multiple factors—including high inventory pressure and year-on-year declines in downstream production and sales—posed significant challenges to the market.

On the capacity side, only a new 7.5-million-ton unit from Gaoqiao Petrochemical came online in the first half, bringing total effective ABS capacity to 11.23 million tons, with capacity growth slowing markedly. However, the launch of new units continued to intensify competitive pressure, and the bulk-process ABS sector—which had previously maintained relatively healthy supply-demand conditions—gradually began to show signs of oversupply.

Starting in the second quarter, cost pressures on ABS petrochemical enterprises became increasingly apparent. After entering May, losses gradually widened, with some mid-to-low-end producers facing theoretical losses of more than 2,000 yuan per ton. Amid deep losses, domestic ABS unit shutdowns and production cuts became particularly frequent in the second quarter, with most enterprises operating at low loads. By early June, the daily operating rate had fallen below 55%. Total ABS output in the second quarter was approximately 1.63 million tons, down about 240,000 tons quarter-on-quarter and about 50,000 tons year-on-year.

In terms of inventory, total domestic ABS petrochemical inventories fluctuated between 176,200 and 334,300 tons in the first half. In late April, inventories climbed to 334,300 tons, a record high. Under heavy inventory pressure, petrochemical producers were forced to cut prices to boost sales. Looking ahead, as the traditional peak demand season approaches, whether the market can stage a turnaround will still depend on actual improvements in end-user orders.