On March 27, the engineering plastics index stood at 698 points, a decrease of 1 point compared to yesterday, a decrease of 38.83% compared to the cycle’s highest point of 1141 points (2018-09-09), and an increase of 23.32% compared to the lowest point of 566 points on May 6, 2020. (Note: The cycle refers to 2011-12-01 to now)
In March, the overall price of domestic engineering plastics products fell. According to the price monitoring of the Business Agency, in March 2023, only one item rose in the engineering plastics price list, while a total of four items fell. The main commodities rising are: PET (+2.81%); The main commodities falling were POM (- 0.41%), PA6 (- 2.18%), PA66 (- 3.17%), and PC (- 3.24%).
In March, the engineering plastics industry generally showed a pattern of increased supply, and the enterprise load continued to be high. Among them, domestic POM polymerization enterprises have performed well, with operating rates ranging from 90% to 95% throughout the month. And about 70% of the monthly average load of PC manufacturers has reached a high point in nearly three years. However, from the perspective of engineering plastics consumption, terminal enterprises have a poor enthusiasm for stocking, and the situation of spot delivery and investment is poor. The supply of goods on the site has increased, and the overall domestic inventory position has risen. The profitability of engineering plastics production enterprises is still challenged, and the improvement of operational risks in factories at all levels is limited. Adding to the decline in international oil prices this month, the common remote cost of the plastic industry has weakened. Overall, the market situation of the engineering plastics industry in March was biased towards negative.
This month, the bottle grade PET market bucked the trend and rose, operating in a stable and strong manner, with the overall spot price at a high level. At the end of the month, the price of the business club was 7690.00 yuan/ton, an increase of 2.81% compared to the beginning of the month. At present, the focus of negotiations is stable, the manufacturer is active in shipping, and downstream purchases are made on demand, with a smooth flow of goods within the site. In late October, oil prices stopped falling and rebounded, with raw material PTA being boosted and prices rising, increasing support for PET cost. In addition, due to the tight supply of goods in individual regions and the double benefits of supply and cost, the PET market in March is expected to rise against the current, and in the short term, the PET market may be stable, medium, and strong.
This month, the domestic POM market fluctuated and the market price fell in a narrow range. In terms of supply, the high and narrow load adjustment of POM enterprises during the month was almost 90% or more throughout the month. The situation of enterprise warehouse construction was general, and the supply pressure was moderate. The market is characterized by abundant supply of goods and a slight loosening of factory prices. At the end of the month, traders maintained their mentality and sold goods normally. In terms of demand, terminal enterprises purchase on demand and carefully wait and see when preparing goods. “Real orders are often followed by single talks, and trading has slowed down.”. The POM market showed a weak and stable operation during the month, and it is expected that the market may continue this momentum in the short term.
The domestic PA6 market gradually declined in March. The market price of caprolactam, an upstream product, fell after a deadlock. The price of raw material pure benzene fluctuated after rising, with general cost support. The load of domestic caprolactam enterprises has been adjusted in a narrow range, and the market supply pressure has been sideways. The overall support for PA6 is flat. The operating rate of PA6 in March was around 70%, and the production was stable and the supply of goods was abundant. Downstream, terminal replenishment demand is weak, intrafloor trading is weak, overall demand for PA6 chips is poor, and intrafloor spot competition is strong. It is expected that the PA6 market will continue to consolidate in the short term.
In March, the market situation of PA66 was poor, and the spot price fell after a deadlock. In terms of supply, the overall monthly load of the domestic PA66 industry is around 65%. Enterprise operations continue to be biased towards destocking, with general inventory pressure and relatively abundant on-site supply. On the upstream side, the supply of adipic acid as the raw material was stable within the month, the market atmosphere was cold, and the price was stable with small fluctuations. The market for hexamethylene diamine is also dominated by stability, with PA66 raw material end supporting the spot market generally. In terms of demand, the situation is weak and difficult to change. Terminal enterprises tend to follow up with goods and maintain production. Buyers generally have strong resistance to high-priced sources of goods, and there is a strong wait-and-see atmosphere in the market. It is expected that PA66 may continue its weak consolidation market in the short term.
According to the monitoring of big data on prices by Business News, PC prices for engineering plastics in China fell the most in March, with PC spot prices generally falling by around 500 yuan/ton at the end of the month compared to the beginning of the month. The upstream bisphenol A market atmosphere is flat, and the cost pressure of raw materials phenol and acetone on the bisphenol A factory remains. However, due to insufficient downstream orders, overall support for PC spot prices is not effective. In terms of industry load, PC capacity utilization increased to over 70% of the highest point in nearly three years in March, resulting in high supply side pressure. The demand side is relatively weak, and the operators have a wait-and-see attitude and maintain a cautious operation. The actual orders are mainly scattered and small orders. Downstream enterprises have relatively lagged in stock preparation, and traders are mainly engaged in sales operations where profits are transferred and orders are taken. Overall, the contradiction between PC supply and demand in March has not changed, and it is expected that PC supply pressure will be difficult to resolve in the short term, or it will continue to operate in a weak manner.
In March, the market of engineering plastics generally weakened, with various products experiencing supply and demand contradictions to varying degrees. Polymerization enterprises often reduce factory prices in order to remove inventory. Terminal enterprises generally have low demand, and tend to digest raw material inventory. They are cautious in stocking operations. At the same time, this month, the international crude oil shock of the engineering plastics common remote raw material fell, coupled with the impact of the Federal Reserve’s announcement of interest rate hikes in late October, and the macro environment has not provided a good support to the engineering plastics industry. The current market momentum is insufficient, and the industry has a heavy wait-and-see attitude. It is expected that the engineering plastics market will continue its current consolidation in early April.