Analysis of the Acetic Acid Industry Chain

From the May price rise and fall list of the acetic acid industry by Shengyi Society, it can be seen that acetic acid and downstream products are generally weak and consolidating. The rise in raw material methanol prices has increased the cost pressure on acetic acid, but due to poor demand, the acetic acid market has declined, with a 3.08% decrease within the month. The main downstream products, acetic anhydride, have experienced a significant decline, while the market for ethyl and butyl esters has narrowed.

Acetic acid: According to the commodity market analysis system of Shengyishe, the price of acetic acid first rose and then fell in May, with a slight rebound at the end of the month. As of May 31, the price was 3150 yuan/ton, a decrease of 100 yuan/ton compared to the beginning of the month’s acetic acid price of 3250 yuan/ton, and an overall decline of 3.08%. After the holiday, the price of acetic acid tends to rise strongly, leading to an increase in downstream demand for on-demand replenishment. The trading atmosphere on the market is improving, and coupled with the Tianjin Alkali Plant’s equipment failure and load reduction, enterprises have a strong intention to raise prices, resulting in a continuous increase in market trading; In late May, there was gradually resistance from downstream towards high priced sources of goods, and the market trading atmosphere was weak. At the same time, as the acetic acid plant resumed its initial load, manufacturers’ willingness to ship increased, and the focus of acetic acid trading continued to shift downwards; At the end of the month, some facilities in East China were shut down, and the company’s quotation slightly increased.

Acetic anhydride: The downstream acetic anhydride market rose first and then fell in May. On May 31st, the quotation was 5437.50 yuan/ton, a decrease of 3.33% from the beginning of the month’s price of 5625.00 yuan/ton. After the holiday, the upstream price of acetic acid increased slightly, and the cost support for acetic anhydride was positive. The demand for acetic anhydride remained stable, and the price of acetic anhydride rose accordingly; In the mid to late period, the price of acetic anhydride weakened and declined, with upstream acetic acid falling and cost support weakened. The acetic anhydride market was clearly bearish, and the price trend declined.

Ethyl acetate: In May, the market situation of ethyl acetate was sorted out and operated, with price trends rising first and then falling. According to the commodity market analysis system of Shengyishe, as of May 31, the average production price of ethyl acetate was 6290 yuan/ton, an increase of 0.48% compared to the price of 6260 yuan/ton at the beginning of the month. After the holiday, the market price of ethyl acetate increased significantly, with the main upstream acetic acid market rising and raw material support being positive. The price of ethyl acetate was slightly stronger and increased; In the middle and late stages, as the upstream market weakened and cost support was insufficient, the upstream market transmitted to the terminal market, affecting downstream purchasing. Downstream acceptance of high priced ethyl acetate was generally low, and entry into the market for purchasing was limited. Under the game of supply and demand, the price of ethyl acetate decreased.

Butyl acetate: The domestic market for butyl acetate remained stable in May. There is currently no plan for equipment maintenance or production reduction in the butyl acetate unit. The market supply is stable within the month, and the quotations from butyl acetate enterprises are mostly stable in operation. In terms of raw materials, the price of acetic acid has fallen, resulting in weak support for butyl ester; The strong rise in the price of n-butanol has a positive impact on butyl acetate, leading to differentiated cost operations. The mentality of butyl acetate manufacturers is indecisive, and market trading prices fluctuate narrowly.

Future prospects of the acetic acid industry chain

According to analysts from Business Society, the current operation of acetic acid enterprises is stable, with sufficient market supply and no pressure on inventory. The main focus is on strong quotations, and downstream production is low, which has limited support for acetic acid. In addition, the downstream market is mostly affected by fluctuations in acetic acid prices. It is expected that the acetic acid industry chain will remain stagnant and consolidate in June, with narrow price fluctuations. In the future, specific attention will be paid to downstream replenishment situations.

The price of acetic anhydride fluctuated downward in May

According to the Commodity Market Analysis System of Shengyishe, as of May 31st, the price of acetic anhydride was 5437.50 yuan/ton, a decrease of 3.33% from the price of 5625.00 yuan/ton on May 1st.

In May, the acetic anhydride market operated weakly, with upstream acetic acid prices experiencing weak fluctuations and insufficient cost support for acetic anhydride; Acetic anhydride enterprises are operating steadily, with sufficient market supply. Downstream market entry is followed by demand, and market trading is limited. Acetic anhydride manufacturers are actively shipping, and the price of acetic anhydride follows the fluctuation of the upstream market.

Weak and volatile acetic acid market in May

According to the market analysis system for acetic acid products in Shengyishe, as of May 31st, the price was 3150 yuan/ton, a decrease of 3.08% compared to the beginning of the month’s acetic acid price of 3250 yuan/ton. After the holiday, the downstream demand for on-demand replenishment increased, and the on-site trading atmosphere improved. In addition, the Tianjin Alkali Plant equipment failure reduced the burden, and the enterprise’s willingness to raise prices was strong, resulting in a strong increase in acetic acid prices; In late May, there was gradually resistance from downstream towards high priced sources of goods, and the market trading atmosphere was weak. At the same time, as the acetic acid plant resumed its initial load, manufacturers’ willingness to ship increased. In order to promote transactions, the focus of acetic acid trading shifted downwards; At the end of the month, some facilities in East China were shut down, and the company’s quotation slightly increased. The overall weak performance of the acetic acid market during the month has had a bearish impact on acetic anhydride.

Future prospects

According to the acetic acid analyst of Business Society, in terms of raw materials, the acetic acid market has slightly increased, and manufacturers have a clear intention of increasing prices, which is supported by the cost of acetic anhydride; In terms of supply, the acetic anhydride market has sufficient supply of goods, and manufacturers have a strong shipping sentiment; Follow up downstream as needed, and the market trading atmosphere is still acceptable. In the future, the cost of acetic anhydride is favorable, and downstream demand is stable. It is expected that the acetic anhydride market will consolidate and rise in the later period, and specific attention will be paid to changes in upstream prices.

This week (5.25-5.31), the domestic price of ethyl acetate remained stable. According to the Commodity Market Analysis System of Shengyishe, as of the 31st, the price of ethyl acetate remained at 6290 yuan/ton, and remained unchanged for the week. Due to insufficient upstream cost support, the supply and demand of ethyl acetate are relatively stable, and the market situation is running smoothly.

Market analysis: The ethyl acetate market remained stable and cautious this week. The utilization rate of ethyl acetate production capacity on the supply side is at a medium to low level, and the supplier’s inventory is under pressure, while the manufacturer maintains active shipments; On the raw material side, the price of acetic acid is weak and volatile, with insufficient cost support. The upstream market is transmitted to the terminal market, affecting downstream purchasing. Downstream buyers generally accept high priced goods, and they often follow up on demand when entering the market. Under the game of supply and demand, the price of ethyl acetate remains stable.

In the future, the upstream acetic acid of ethyl acetate has slightly increased, with good cost support and no pressure on supplier supply. Downstream purchases are made according to demand, and the market is optimistic. It is expected that the ethyl acetate market will consolidate and rise in the short term. It is recommended to pay attention to the price execution of raw material acetic acid and ethyl acetate manufacturers. At present, the mainstream transaction price in the market is between 6200-6370 yuan/ton.

The price of isooctanol fluctuated and fell in May

According to the Commodity Market Analysis System of Shengyishe, as of May 30th, the quotation for isooctanol was 9910 yuan/ton, an increase of 2.59% from the fluctuation of isooctanol price of 9660 yuan/ton on May 1st. In May, the price of isooctanol was at the bottom of the market, and there was limited room for its decline. Since the domestic isooctanol market hit bottom in mid April, the price center of isooctanol has slowly shifted upwards. From the perspective of raw materials, the price of propylene has stabilized at a high level, while the cost support for isooctanol still exists, and the price of isooctanol has fluctuated and risen; From the demand side, in May, downstream plasticizers and isooctyl acrylate units took turns undergoing maintenance, resulting in low sustainability of buying and consolidation of isooctyl alcohol. The market for isooctanol lacks continuous upward momentum, and the price of isooctanol has fluctuated slightly.

Strong consolidation of propylene prices in May

According to the propylene commodity market analysis system of Shengyishe, as of May 30th, the propylene price was quoted at 6860.60 yuan/ton, which is a volatile increase of 0.88% compared to the propylene price of 6800.60 yuan/ton on May 1st. Crude oil prices fluctuate and consolidate, while propylene cost support still exists. In May, propylene prices fluctuate and consolidate; The shutdown of propylene production units has dragged down the market, resulting in a decrease in downstream production of propylene. Downstream customers are in urgent need of procurement, and propylene manufacturers have average shipments. The supply and demand of the propylene market are weak, and propylene prices are consolidating strongly.

Downstream fluctuations and increases in the isooctanol industry chain in May

According to the commodity market analysis system of Business Society, the isooctanol industry chain saw a full rise in May. The upstream propylene price has slightly increased, and downstream products in the isooctanol industry chain have all experienced varying degrees of increase. The demand for isooctanol has increased, and the price of isooctanol fluctuated and rose in May. Downstream demand is rising, and the momentum for the rise of isooctanol in the future is increasing.

Future expectations

According to analysts from Business Society’s octanol product data, in terms of cost, propylene prices are consolidating strongly, while the cost support for isooctanol still exists; On the supply side, the inventory of isooctanol manufacturers is low, and manufacturers are actively shipping, resulting in sufficient supply of isooctanol; In terms of demand, downstream product prices of isooctanol fluctuated and increased in May, leading to increased support for downstream demand. In the future, with sufficient supply and increased demand support for isooctanol, cost support still exists, and it is expected that the price of octanol will fluctuate strongly and consolidate in the future.

According to the Commodity Market Analysis System of Shengyishe, as of May 29th, the average price of melamine enterprises was 7000.00 yuan/ton, a decrease of 0.36% compared to the price on May 1st.

The market price of melamine fluctuated slightly in May. In the first half of the year, the market supply was sufficient, but downstream production was low. Small orders were mainly followed up on demand, and new business transactions were lukewarm. The market atmosphere was weak, but the price of raw material urea rose, cost pressure rose, and manufacturers had weak intentions to sell low. The market remained stable and under pressure. In the middle and late stages, the price of raw material urea continued to rise, and cost pressure continued to increase. Some export orders were still supported, supporting enterprises to raise prices. Approaching the end of the month, cost pressure still exists, but domestic downstream demand is weak, market high prices and weak transactions, and the market is showing signs of weakness.

According to the commodity market analysis system of Business Society, the reference price of urea on May 28th was 2494.17, an increase of 2.4% compared to May 1st (2435.83). The urea raw material market showed a strong trend in May, with significant cost pressure on melamine.

Future Market Forecast:

Business Society’s melamine analyst believes that the current sluggish domestic downstream demand in the melamine market is dragging down the market, and there may still be no significant improvement in demand in the short term, which may still have constraints on the market. But the price of raw material urea is high, and the cost of melamine is under pressure, with manufacturers mainly raising prices. It is expected that in the short term, the cost demand game may continue, and the melamine market situation may remain slightly weak. More attention needs to be paid to market news guidance.

Price trend

In May, the domestic PA66 market showed a strong consolidation and then fell. The decline in spot prices is concentrated in the latter half of the year. According to data monitoring from Business Society, on May 29th, the domestic benchmark price of PA66 mixture was 21600 yuan/ton, with a price level increase or decrease of -5.68% compared to the beginning of the month.

Cause analysis

On the cost side:

In the first half of May, adipic acid was supported by the strengthening of the raw material pure benzene, and the strong cost side supported the market. But as the supply increases, the pressure on adipic acid from the supply side gradually becomes more prominent. The support for PA66 fluctuates as it rises first and then falls. At the same time, the news of a price drop of 1500 yuan/ton by overseas giant NVIDIA in June in the second half of the month has impacted the market in terms of hexamethylene diamine. Coupled with the previous high prices, the focus of the hexamethylene diamine market has significantly fallen due to the dual impact; Overall, the support of costs for the PA66 market has weakened.

In terms of supply:

The operating rate of domestic PA66 production lines remained stable with little movement throughout May. The overall industry load is around 70%. The production of the enterprise is stable, and the accumulation of inventory is average. In the second half of the month, suppliers generally lowered their factory prices, and the support gradually weakened.

In terms of demand:

In May, textile, electrical, and modification enterprises followed a routine in stocking and consumption, while most of the pick-up operations were focused on production. The main force of on-site trading maintains a strong demand for follow-up. In the second half of the month, with the decline of spot prices, the buyer camp is cautious and resistant to high priced sources. The demand side has average support for PA66.

Future Market Forecast

In May, the spot price of PA66 fell from a high level. The raw material market has seen a decline in support for the cost side of PA66. PA66 enterprise has a horizontal load and stable supply. The demand follow-up of terminal enterprises is average. It is expected that the PA66 market will continue to operate weakly in the future.

According to the price monitoring of Business Society, in May, the price of stainless steel first fell and then increased. As of the end of the month, the spot price of stainless steel was 13195.71 yuan/ton, a decrease of 0.09% from the beginning of the month and a year-on-year decrease of 4.08%. Upstream nickel showed a strong overall trend in May. As of the end of the month, the spot nickel quotation was 143583.33 yuan/ton, an increase of 9.69% from the beginning of the month and a year-on-year decrease of 25.74%.

Macro level

The US CPI in April increased by 3.4% year-on-year, while the core CPI growth rate in April decreased from 0.4% in March to 0.3% month on month, marking the first decline in six months and remaining unchanged from the expected 0.3%. This data has strengthened market expectations for the Federal Reserve’s interest rate cut in September. In addition, domestic real estate policies are relatively active. Hangzhou and Xi’an have lifted purchase restrictions, and the national level has issued heavyweight support policies, such as reducing the down payment ratio, canceling the lower limit of real estate interest rates, and lowering housing provident fund loan interest rates, further promoting the rise of non-ferrous metals. However, in late May, the latest meeting minutes released by the Federal Reserve conveyed a hawkish attitude, suggesting that there is still a possibility of future interest rate hikes, which led to a strong rebound in the US dollar index and put pressure on colored prices.

Nickel fundamental surface

Supply side

The fourth largest nickel producing country in the world, New Caledonia, has experienced unrest, forcing the local nickel wet intermediate smelting project to stop production, and the normal operation of mines has also been affected, with almost no production. In addition, the approval of Indonesian nickel mines did not meet expectations. Currently, the three-year approval quota for Indonesian nickel mines by RKAB is 217.6 million wet tons, accounting for approximately 26.21% of the total number of applications approved. The circulation resources of Indonesian nickel mines are relatively scarce. The tight availability of nickel iron circulating resources, combined with these news factors, has helped push nickel prices to a seven month high. There are still electroplating nickel projects in China and Indonesia that are put into operation, and pure nickel production will continue to grow rapidly. The expectation of nickel oversupply remains unchanged, and global inventories continue to accumulate. It is expected that the production in April will further increase to 25900 tons, a month on month increase of 4%. Some nickel manufacturers are still in the stage of increasing production. At the same time, manufacturers that reduced production in March are expected to resume production in April, and the production of newly invested nickel plates is also gradually increasing.

LME nickel inventory slightly increased

As shown in the above figure, in May, LME nickel inventory has slightly increased, as of the end of the month, LME nickel inventory is 83730 tons, up 6.63% from the beginning of the month and 30.51% from the beginning of the year.

On the demand side: Alloy is the main downstream of pure nickel, and there is a very good demand for alloys in military and shipping industries. Enterprises are buying at low prices. The stainless steel factory will resume production in May. The demand for electroplating is relatively stable. The production schedule of the new energy ternary system declined in May.

Stainless steel basic surface

Since May, the stainless steel market has rebounded after a decline. After the May Day holiday, the replenishment progress of the stainless steel market was less than expected, and there was a certain accumulation of market inventory. Subsequently, under the influence of the gradual decline in futures trading, the stainless steel market price followed the trend of weakening and adjustment. Under the influence of Putin’s visit to China and frequent geopolitical conflicts in mid to late October, the overall strength of the non-ferrous metal market has been dominant, with raw material nickel continuing to rise, driving the willingness of the stainless steel market to explore price increases. Although the rise in prices has driven some terminals to accept goods, the overall focus is still on receiving goods in demand, with high-level transactions hindered and the market under pressure rising.

Supply side: Domestic steel mills reduced production in April less than expected, and are expected to resume production in May. According to Mysteel statistics, in April 2024, the crude steel production of 300 series from 43 stainless steel plants in China was 1.6832 million tons, an increase of 4500 tons month on month and 0.27% month on month, an increase of 18.35% year-on-year; In May, the 300 series produced 1.767 million tons, an increase of 4.98% month on month and 9.75% year-on-year. On the Indonesian side, Qingshan and Delong produced 425000 tons in March, 344700 tons in April, and an expected 390000 tons in May.

As of the end of the month, the total inventory of stainless steel was 106.86 tons, a decrease of 3.7% compared to last week, with both cold and hot rolling inventories falling.

On the demand side: In the off-season background, the downstream consumer demand side performs poorly and purchases on demand. The inventory in the market has increased again, the supply of goods is not tight, and steel mills continue to distribute goods within the week. The overall inventory digestion is slow, and merchants are more cautious in purchasing. The current spot circulation resources are relatively sufficient, with complete specifications and acceptable inventory. The downstream sales pressure still exists.

In summary, the disturbance at the mining end has played a certain supporting role in nickel prices, but lacks the driving force of new variables, and the degree of assistance in price increase is limited. The fluctuation of overseas macro expectations, coupled with the overall pressure on the non-ferrous sector, has put pressure on nickel prices in the short term. It is expected that nickel prices will fluctuate weakly in June.

For stainless steel, in May and beyond, as stainless steel production profits shrink again, there is a certain expectation of a reduction in market supply. However, with the increasing impact of the traditional off-season of consumption, the demand side also shows a reduction expectation. In June, considering that the impact of unexpected news gradually dissipates, the subsequent news of US tax hikes on electric vehicles, medical supplies, solar products and other products in China may create a bearish drag on the demand side, increasing the possibility of pressure on the stainless steel industry in June. It is expected that stainless steel prices will fluctuate weakly in June.

This week, the domestic glycerol market prices remained weak and stable. According to the data monitoring system of Business Society, as of May 24th, the benchmark price of glycerol in Business Society was 4275.00 yuan/ton, a decrease of -1.16% compared to the beginning of this month (4325.00 yuan/ton).

Influencing factors: In terms of palm oil, due to the fact that Malay palm oil is in the production cycle and the external market is not good, the overall palm oil market has slightly fluctuated and risen. According to data from Business Society, as of May 24th, the benchmark price of palm oil in Business Society was 7894.00 yuan/ton, a decrease of -0.83% compared to the beginning of this month (7960.00 yuan/ton).

On the external side, the price of glycerol is stable, with a small quantity and not many offers. The domestic downstream market demand for epichlorohydrin is weak, and the purchasing atmosphere is not strong. At present, the market trading volume is insufficient and orders are limited, with a focus on wait-and-see.

Post forecast: According to the glycerol data analyst from Business Society, the market price of raw palm oil has risen, downstream demand is cold, and procurement is not active. In the near future, domestic glycerol has been operating weakly and steadily. For more information, please pay attention to the dynamics of external quotation and market guidance.

According to the Commodity Market Analysis System of Business Society, the domestic PTA spot market fluctuated and rose this week (May 20-25). As of May 25, the average market price in East China was 5946 yuan/ton, an increase of 0.52% compared to the beginning of the week.

There have been many changes in domestic PTA equipment this week, with Dongying United’s 2.5 million ton PTA equipment undergoing maintenance for about 40 days on May 6th. The 3.3 million ton device of Yisheng New Materials will undergo maintenance for about 20 days on May 16th. The Ningbo Taihua 1.5 million ton plant was shut down for one month on May 23rd. The 1.25 million ton PTA plant of Ineos located in Zhuhai has been temporarily shut down for 4 days since May 20th and resumed operation over the weekend. At present, the PTA operating rate in the industry is around 75%, and there will be no equipment changes next week.

At the beginning of the week, due to the expected improvement in oil demand and the decrease in US crude oil inventories, the geopolitical situation was tense, and multiple factors drove up international oil prices, which boosted the PTA market. However, due to the possible postponement of interest rate cuts and unexpected increase in US oil inventories as shown in Federal Reserve minutes, oil prices have been adjusted downwards for multiple trading days. As of May 23, the settlement price of the main contract for WTI crude oil futures in the United States was $76.87 per barrel, and the settlement price of the main contract for Brent crude oil futures was $81.36 per barrel, with WTI crude oil falling to a nearly three-month low.

In the PX market, the 550000 ton PX plant in Malaysia restarted earlier this week and was shut down due to a malfunction on May 9th. At the same time, Saudi Arabia’s 1.34 million ton PX plant also experienced an unexpected shutdown due to unstable operation and low load operation. Since May, due to frequent unexpected shutdowns of the equipment, the supply pressure has been alleviated.

Downstream mainstream polyester factories are gradually reducing production, with a strong intention to support the market and appropriate replenishment of raw materials. Under the seasonal off-season at the terminal, downstream buying intentions remain limited. With the approaching summer weather turning hot, the decline in polyester production has become a major trend, weakening the demand for PTA, PTA has accumulated inventory expectations. The decrease in demand will strengthen the impact of PTA oversupply and create a negative impact on PTA prices.

Business Society analysts believe that with the decline in crude oil prices, support for PTA costs will weaken, and downstream polyester factories are more likely to reduce production, leading to a decrease in demand for PTA. At the same time, it is still necessary to pay attention to whether there is an increase in unplanned maintenance of PTA devices under low processing costs. Overall, there is currently no bullish news on the fundamentals, The possibility of PTA price decline is high.

With the downward adjustment of international crude oil prices and the lack of highlights in its own fundamentals, PTA prices have experienced a slight decline. According to the Commodity Market Analysis System of Business Society, as of May 23, the average market price in East China was 5918 yuan/ton, a decrease of 0.08% from the previous day.

In terms of supply, due to the decrease in PTA production in the early stage, some regions may experience supply tightening, with the industry operating rate around 74%. With the planned restart of the 1.25 million ton PTA plant in South China on May 24th, it is expected that the PTA production capacity operating rate will slightly increase, and overall, the supply of goods will still be abundant.

In the international crude oil market, due to the possible postponement of interest rate cuts and unexpected increase in US oil inventories as shown in Federal Reserve minutes, crude oil prices have been adjusted downwards for multiple trading days. As of May 22, the settlement price of the main contract for US WTI crude oil futures was $77.57 per barrel, and the settlement price of the main contract for Brent crude oil futures was $81.90 per barrel, thus weakening support for PTA costs.

Downstream polyester production started at around 87%. The annual production of 125000 tons of polyester plant is planned to restart next Monday, with no major changes for the time being. Large polyester factories in Jiangsu and Zhejiang have a strong intention to support the market. The domestic demand for terminal textiles is gradually weakening. In April, the retail sales of clothing, shoes and hats, and needle textiles in domestic consumer goods retail reached 104.8 billion yuan, a year-on-year decrease of 2%. However, demand continued to weaken after entering May.

Business Society analysts believe that the unexpected increase in US crude oil inventories and other negative news have led to a continued decline in crude oil prices and weakened cost support, PTA fundamentals are difficult to boost, coupled with the off-season cycle, it is still necessary to pay attention to whether polyester factories will expand their production reduction. Overall, there is a lack of upward driving force, PTA prices may experience weak fluctuations.