ABS Market in a Tale of Two Halves: Navigating Divergence Amid High Supply and Weak Demand

The ABS resin market in China in 2025 is undergoing profound changes in its supply and demand structure. On one hand, the industry is experiencing a surge in capacity expansion, with supply reaching historic highs; on the other hand, demand from the major downstream home appliance sector remains weak. This "high supply, weak demand" pattern is pushing the ABS industry into a new stage of development, where the focus of competition among enterprises is shifting from scale expansion to technological breakthroughs and differentiated development.

Capacity expansion enters a substantive stage.

In 2025, China's ABS industry a genuine "expansion year." From January to August, China's total ABS output reached 4.394 million tons, a significant year-on-year increase of 26%, with an increase of over 900,000 tons. In August alone, the monthly output reached 613,000 tons, and the industry's operating rate improved to over 70%. This high level of supply is not accidental, but rather a necessary result of the concentrated implementation of planned production capacity in the previous period.

Particularly noteworthy isOntologyABSBreakthrough. For a long time, the domestic ontology law...The ABS production capacity is stable but the output is limited, mainly concentrated in established companies such as Gaoqiao Petrochemical and Huajin Chemical. However, this situation will change in the second half of 2025.Yike Chemical Phase IThe 225,000 tons/year plant successfully launched and achieved stable production.This marks the ontology law of China.The ABS industry has entered a true expansion phase. Following this,Jilin PetrochemicalA new 200,000-ton facility is also scheduled to start production in October.At that time, domestic ontology lawThe total production capacity of ABS will surge to 1.095 million tons. Looking ahead to 2026, new facilities such as those of Gaoqiao Petrochemical and Zhejiang Petrochemical will continue to advance, further expanding the capacity base.

The weak downstream demand drags down the market.

The latest data from AVC reveals the grim situation in the air conditioner market.：In October, the total production volume of the air conditioning industry declined by 17.1% year-on-year, with domestic production dropping by 19.8% and export production decreasing by 14.7%. On one hand, this is due to the high market base in the same period in 2024 stimulated by policies, which puts pressure on this year's year-on-year growth rate. On the other hand, the current national subsidy policy is in a transitional hiatus, leading to cautious production and purchasing decisions by companies and consumers. Although corporate inventories have fallen to a safe level, this can only provide a minor buffer against the decline in production, making it difficult to reverse the overall downward trend.

Reflected inOn the demand side for ABS, the traditional peak season of "Golden September and Silver October" has not materialized. Analysis indicates that in early to mid-September, the ABS market experienced a slow downward trend with a lackluster trading atmosphere. Despite it being the traditional production peak season for Christmas export orders and domestic "Double Eleven" stockpiling, the advancement of some demand and high inventory levels of finished products in the downstream have led to an insignificant increase in the operating rates of downstream factories. As a result, their procurement of ABS remains strictly demand-driven, with a severe lack of confidence in stockpiling."Golden September" was not as promising as expected, causing the ABS market to miss a crucial demand boost opportunity.

The upward price space is limited, and internal industry differentiation intensifies.

Under the pressure of supply and demand imbalance,Since February, ABS prices have entered a downward trend, with prices of some general-purpose grades falling below 9,000 yuan/ton, a decrease of 14%-18% compared to the beginning of the year. The cost side lacks support as prices of main raw materials such as styrene weaken. The industry maintains a state of marginal profit, which instead encourages companies to keep high operating rates, forming a "low profit-high output-weak price" cycle.

At the same time, within the marketThe trend of differentiation is becoming increasingly evident.General levelThe ABS market has fallen into a brutal "involution" price war due to relatively low technical barriers and severe oversupply. In contrast, high-end ABS (such as high-performance, low-odor, and environmentally-friendly grades) still rely on imports and have insufficient production capacity, resulting in strong brand premium capability and relatively firm prices. In September, the price gap between ordinary and high-end grades in USD further widened, clearly indicating that the path of relying solely on cost competition is becoming increasingly narrow.

In 2025, the ABS market is experiencing the growing pains brought about by the mismatch between the production cycle and the demand cycle. High supply has become an irreversible new normal, while the recovery of downstream household appliance demand still faces uncertainty. In the short term, ABS prices will continue to be under pressure, with limited upward potential. In the medium to long term, development needs to shift from capacity expansion to value enhancement, achieving high-quality development through technological innovation and differentiation strategies.

Author: Specialized Vision Market Research ExpertZhao Hongyan