In 2022, the energy and chemical raw material market experienced a sharp rise and fall in international oil prices, a surge in natural gas prices in Europe and the United States, a sharp rise in the price of coal under the aggravation of the contradiction between supply and demand, and an intensification of the energy crisis, while the domestic epidemic situation was repeated, and the chemical market entered a state of double pressure between supply and demand. In 2023, from various policies to stimulate domestic demand to the full liberalization of the epidemic, opportunities and challenges coexist, and we look forward to breaking the market.
In January 2023, the chemical industry index continued to hover at the bottom, with a mixed rise and fall. The contradiction between supply and demand remained serious. Domestic production and demand still needed time to recover. The chemical industry index fell from 917 points to 911 points, down 0.65% as of the 14th, and continued to fluctuate in a narrow range at the bottom.
In the list of commodity prices in the first half of January 2023, there were 43 commodities in the chemical sector that rose on a month-on-month basis, including 5 commodities that rose more than 10%, accounting for 4.6% of the monitored commodities in the sector; The top three commodities were MIBK (18.7%), propane (17.1%) and 1,4-butanediol (11.8%). There are 45 commodities with a month-on-month decline, and 6 commodities with a decline of more than 10%, accounting for 5.6% of the monitored commodities in this sector; The top three products falling were polysilicon (- 32.4%), coal tar (high temperature) (- 16.7%) and acetone (- 13.2%). Both rose and fell by – 0.1%.
MIBK (18.7%): After the New Year’s Day, the MIBK market rose sharply due to the tight supply expectations. The national average price rose from 14766 yuan/ton on January 2 to 17533 yuan/ton on January 13.
First, the supply is expected to be tight, with the shutdown of 50000 tons/year large units, and the domestic operating rate falling from 80% to 40%. The short-term supply is expected to be tight. Second, the main downstream antioxidant industries replenish after New Year’s Day, and the downstream factories also replenish after a period of small orders. As the holiday approaches, the demand of downstream small orders follows up, and the resistance to high-priced raw materials is obvious. With the supply of imported goods replenished, the price gradually peaked and the rising trend slowed down.
Propane (17.1%): In 2003, the propane market got off to a good start. The average market price of Shandong propane rose from 5082 yuan/ton on the 2nd to 5920 yuan/ton on the 14th, of which the average market price reached 6000 yuan/ton on the 11th.
First, in the early stage, the price of the northern market was low, the downstream demand was relatively stable, the enterprises effectively destocked, and the downstream began to replenish goods after the festival, while the upstream inventory was low. At the same time, the recent port arrival volume was low, the market supply was reduced, and the price of propane began to rise strongly. Second, some PDH resumed work and the demand for chemical industry increased significantly. With the support of demand, the price of propane was easy to rise but difficult to fall. After the holiday, the price of propane rose strong in the north and weak in the south. In the early stage, the low-end sources of goods in the northern market were exported for arbitrage, effectively reducing the inventory. In the southern market, the prices were gradually adjusted due to high prices, and the goods were not moving smoothly. As the holiday approached, some factories entered the holiday mode, and migrant workers returned home. The market gradually peaked.
1,4-butanediol (11.8%): The bidding price of the industry rose sharply after the holiday, and the price of 1,4-butanediol rose from 9780 yuan/ton on the 2nd day to 10930 yuan/ton on the 13th day.
First, the production enterprises are reluctant to sell the goods in the spot market, while the main factories are bidding for the goods in the spot market and bidding for the goods in the spot market. In terms of devices, except for Dongjing Biological Phase I parking and maintenance, the industry’s burden fell slightly, and manufacturers continued to deliver contract orders. The BDO supply level is obviously positive. Second, the demand of PTMEG industry has increased with the increase of the restart load of BASF plant in Shanghai, and other downstream changes are not large, and the demand side is slightly positive. However, as the holiday approaches, some middle and lower reaches enter the holiday state in advance, and the overall trading volume of the market is limited.
Polysilicon (- 32.4%): After the New Year’s Day, the polysilicon market continued to fall in volume and price at the end of the year. After the festival, polysilicon fell by 78000 yuan/ton, and the market offer fell to 163333 yuan/ton on the 13th.
First, the supply is abundant, and manufacturers gradually accumulate stocks. The unit operating rate of silicon material enterprises remained high, and the number of orders signed by large factories continued to shrink. The contract price of large silicon material factories fell one after another due to the inactivity of downstream delivery. The supply of high-priced goods has gradually withdrawn from the market, and both volume and price are cooling down. In general, oversupply is the direct cause of price decline. Second, the overall demand of the downstream declined. Near the end of the year, the domestic installed demand decreased, especially for centralized projects, and the overseas winter demand dropped sharply, the labor shortage, and the order volume also declined. Both domestic and external demand were sluggish, leading to the decline of the PV industry chain. At present, the fundamental negative situation of silicon material is aggravated, the supply performance is excessive, and the demand is entering the off-season. The supply pressure will continue in the later period, but it is not ruled out that in the later period, due to the impact of the weather, the enterprise device maintenance, and comprehensive consideration, the silicon material market is still weak.
|Gamma-PGA (gamma polyglutamic acid)|
Coal tar (high temperature) (- 16.7%): In January, the coal tar market fell sharply, from 6150 yuan/ton to 5130 yuan/ton. First, the bidding in Shanxi fell by 1000 yuan/ton, and the operating rate of coking enterprises was high, and the overall supply was loose. Second, the downstream deep-processing industry is sluggish, the demand is cold, and the overall demand is difficult to improve. Enterprises have many uncertain factors about the market after the Spring Festival, and they have little intention of inventory before the festival. They wait for the market to become clear after the festival.
Acetone (- 13.2%): The domestic acetone market has declined broadly, and the price of the East China factory has dropped from 5550 yuan/ton to 4820 yuan/ton.
First, the high operating rate is around 85%, and the port inventory rose to 32000 tons on the 9th, which is fast rising, and the pressure on supply side is increasing. Under the pressure of factory inventory, the shippers have great enthusiasm for shipment, and the supply pressure is expected to increase with the smooth production of Shenghong Refining and Chemical Phenol Ketone Plant. Second, the downstream procurement is sluggish. Although the downstream MIBK market has soared, the operating rate has fallen to a low point and the demand is insufficient. The participation of middlemen is relatively low. Under the condition of cold market trading, the market has declined in a wide range. As the market falls, the pressure on phenolic ketone enterprises to lose money has increased. Although most factories wait for the market to be clear after the holiday to purchase again, the market offer has stopped falling and increased under the pressure of profit. The market will gradually become clear after the holiday.
From the perspective of upstream crude oil, the recent winter storm hit the United States, and crude oil is expected to fluctuate at a low level, weakening the cost support for petrochemical products. In the long run, the oil market faces not only macro pressure, economic recession cycle constraints, but also the game between supply and demand. On the supply side, there are risks of Russian production decline and OEPC+production reduction to support the bottom. The demand side is suppressed by the macro cycle, depressed by the sluggish supply and demand, and supported by the growth of Asian demand. The oil market is affected by macro and micro bullishness, so it is more likely to maintain broad volatility.
On the demand side, domestic economic policies clearly adhere to the domestic big cycle, do a good job in the international and domestic double cycle, and fully open up in the post-epidemic era, but the unavoidable reality is that the entity is still relatively weak, and the wait-and-see mood increases after the pain. In terms of terminals, the domestic policy on the epidemic has been optimized, and the confidence in logistics and consumption has been restored, but the demand for short-term terminals in the off-season of the Spring Festival and in the recovery period may be difficult to make a significant turnaround.
In 2023, China’s economy will recover slowly, but in the face of the global economic downturn and the expected intensification of economic recession in Europe and the United States, China’s export market of bulk products will still face challenges. In 2023, the chemical industry capacity will continue to grow steadily. In the past year, the domestic chemical industry capacity has shown a steady growth, with 80% of the main chemical products showing a growth trend and only 5% of the capacity declining. In the future, driven by the supporting devices and profit chain, the chemical industry capacity will continue to expand, and the market competition will be further intensified. The profits of enterprises that are difficult to form the advantage of the industrial chain in the future may be under pressure, but there are also backward capacity to be eliminated. In 2023, more large and medium-sized enterprises will pay attention to the growth of downstream sub-industries. With the continuous breakthroughs in domestic technology, environmental protection, high-end new materials, electrolyte and wind power industry chain will be more and more valued by large enterprises. In the context of dual-carbon, backward enterprises will accelerate the elimination, and new industries will penetrate into domestic substitution.