PetroChina’s New Jilin ABS Plant Set to Pressure Markets

Asia’s acrylonitrile butadiene styrene and styrene monomer markets are poised for a reshape with the startup of a major new production unit by PetroChina Jilin in northeastern China, adding significant supply to already well-stocked chains and heightening expectations of downward pressure on spot prices, according to industry sources.

The company’s new 600,000 metric tons per year ABS plant at Jilin City is scheduled to begin operations by mid-November, according to people familiar with the matter.

The downstream push complements an upstream build-out — a new 1.2 million mt/year ethylene plant and a 600,000 mt/year SM facility in Jilin which began production on Oct. 20, following the cracker startup in early September. There are three other SM lines at the same site, with a combined nameplate capacity of 460,000 mt/year. However, two smaller units totaling 140,000 mt/year have been idled indefinitely, while the largest remains in operation, data from Chemical Market Analytics by OPIS shows.

Together, these investments mark PetroChina’s most ambitious downstream expansion in years, aiming to capture greater margins from value-added plastics while securing feedstock integration across its new facilities.

Supply Wave

The ABS market, already seeing weaker margins due to sluggish demand from consumer electronics and automotive sectors, could face additional pressure as fresh volumes from Jilin enter the market.

With the recent launches — including a 300,000 mt/year plant by Shandong Yulong Petrochemical in early May, a 200,000 mt/year plant by Daqing Petrochemical & Chemicals in late June, and a 225,000 mt/year unit by Shandong Yike Chemical in late July — the marginal load for ABS in northeast Asia is rising.

At the same time, domestic operating rates for ABS have declined slightly, from around 73% in mid-October to around 71.5 % by early November, according to market sources.

“With this new ABS capacity, China’s exports will likely rise,” said a China-based trader. “Producers across Northeast Asia will have to contend with lower prices, at least through early 2026.”

Spot ABS prices in Northeast Asia are already “under pressure”, according to market participants. Some traders expect prices to soften further as inventories build and downstream orders remain tepid.

Impact on Styrene

The integrated startup at Jilin is also expected to influence SM dynamics. The new plant, fed by the site’s new cracker, is expected to boost PetroChina Jilin’s total styrene nameplate capacity to around 920,000 mt/year.

Styrene spot prices in East China have dropped over 10%, with the midpoint of the OPIS ex-tank assessment falling from 6,958 yuan/mt ex-tank on Sep. 26 to 6,231 yuan/mt ex-tank by Nov. 11.

Market participants said the net addition of around 460,000 mt/year of Jilin’s new SM capacity would keep China’s styrene balances long through 2025, particularly as downstream ABS and polystyrene sectors face weak demand recovery.

Competitive Landscape

PetroChina’s move underscores the continuing push by Chinese producers to integrate upstream and downstream value chains amid a slowdown in domestic consumption growth. Competitors, including Sinopec and private-sector players such as Ineos Styrolution’s China JV, are also ramping up ABS capacity, intensifying regional competition.

“PetroChina’s new ABS unit is likely to run at reduced rates initially, but even a partial load will alter the regional balance,” added the China-based trader. “We’re looking at a potentially oversupplied ABS market through next year.”

Outlook

While integrated players like PetroChina can leverage feedstock advantages to weather thinner margins, independent producers may struggle. Market players expect sustained downward pressure on both styrene and ABS spreads into early 2026 unless downstream demand in appliances and autos rebounds meaningfully.

For now, traders are bracing for a flood of new Chinese exports. “Once Jilin’s ABS line stabilizes, we’ll likely see more offers into Southeast Asia and India,” a Southeast Asia-based trader said. “The next few months could test just how much supply the region can absorb.”

–Reporting by Hazel Kumari, hkumari@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com