Asian Acrylonitrile Butadiene Styrene (ABS) prices fell in the initial half of May 2025 as a result of abundant supply and weak demand. However, towards mid-month cost-side pressures grew and downstream orders started showing signs of recovery.

In May, regional ABS makers in the local market boosted operating levels, as turnarounds at the likes of Yulong Petrochemical kicked in. Weekly output remained near record levels of around 130,000 tons, as producer inventory levels also remained elevated, though fluctuating marginally. Added production lines introduced later in the month continued to weigh on overall supply.

By the middle of May, the load factor dropped somewhat, reflecting the somewhat reduction of production activity. Nevertheless, the general supply situation remained sufficient, and no material relief was forthcoming for the supply-demand gap. The commentators noted that although the market had stopped deteriorating, the oversupply factor still weighed heavily on ABS spot prices.

Early May saw little movement in upstream commodities to offer modest support to ABS prices. Acrylonitrile prices are flat for the most part following a brief supply tightening over the May Day holiday. Butadiene prices also traded in a narrow range, with the mid-month drop partly negated by bargain purchasing by downstream firms.

Styrene markets portrayed this uncertainty, fluctuating inconsistently in the light of weak demand and imbalanced availability of benzene. Low port inventories contributed somewhat, but the lack of firm purchasing interest kept any significant price advance curbed.

However, upstream trends improved more favorably by mid-May. Acrylonitrile prices went up on reduced production rates and strong export demand. Butadiene prices surged on tighter supplies due to unplanned reductions in the operating rates and stronger market sentiment on macroeconomic events. Styrene also saw a dramatic turnaround, on the back of higher oil prices and positive trade sentiment following China-U.S. tariff-reduction talks.

This raw material bounce provided ABS with a firmer cost basis, which halted its earlier falling prices.

ABS end-users were cautious in early May and were only undertaking the absorption of existing inventories and the fulfillment of small, urgent orders. Weak confidence and lackluster trading pushed support for demand at bay, adding to the downside pricing pressure.

But the ABS market mood improved after May 12, when China and the U.S. agreed on a tariff reduction deal, which led to a surge in export orders, particularly for small appliances and electronics. That led to a noticeable rise in factory operating levels and trading activity. The change in purchasing behavior, from non-existent restocking to vigorous buying, stabilized the ABS market.

As per ChemAnalyst, Though the ABS market was particularly weak in early May, conditions trended toward stabilization by mid-month. Increased upstream prices and a short-term pick-up in demand helped to contain further losses. However, high levels of inventory and persistent supply pressure imply that any recovery will prove short-lived.

Market participants are also cautious, expecting ABS prices to consolidate in the near term against a still-biased supply-demand environment.