1、 Market Review of the Past Week
| Gamma-PGA (gamma polyglutamic acid) |
In the past week (April 15-21), the PA66 market has shown a high volatility trend with a slight decline after a surge. On April 14th, the benchmark price of PA66 in Shengyi Society rose to 25100 yuan/ton, setting a new high in price in a year; On April 21st, the benchmark price of PA66 was reported at 24100 yuan/ton, which was slightly lower than April 14th. However, it still rose by 4.93% in 10 days, 20.50% in 30 days, and 52.85% in 60 days, maintaining a high overall trend.
2、 Cause analysis
Cost side – high raw material prices, strong cost support is the core driving force
The raw material side continues to remain at a historically high level, which is the core driving force behind the price increase of PA66 in this round.
In terms of hexamethylenediamine, the execution price of NVIDIA in April has been raised to 26000 yuan/ton, a significant increase from the beginning of the year. In the first quarter, the market price of hexamethylenediamine in East China rose from 16300 yuan/ton in early January to 28000 yuan/ton at the end of March, with a cumulative increase of 11700 yuan/ton, or 71.78%.
In terms of adipic acid, the cumulative increase in the first quarter exceeded 50%. Although the benchmark price of adipic acid slightly decreased by 0.63% in mid April compared to the beginning of the month, the overall trend is still relatively high in history. Adipic acid in East China increased from 7025 yuan/ton in early January to 10800 yuan/ton at the end of March, an increase of 53.74%.
Although the geopolitical conflict in the Middle East has eased recently, the energy premium in the early stage has been deeply embedded in the industrial chain, making it difficult for the short-term cost center to move downwards, and the cost pressure on production enterprises is still relatively high.
Supply and demand side – supply contraction, weak demand, forming a stalemate pattern
The tight supply side supports prices. Recently, there has been a decrease in imported goods, resulting in tight spot circulation in the market and a strong reluctance among traders to sell. Both manufacturers and traders have overall low inventory levels. Supply contraction provides support for spot prices.
Weak demand suppresses upward potential. The downstream textile industry has a low acceptance of high prices and generally adopts the strategy of “small order demand, on-demand procurement”. Large order purchases are rare, and trading activity is insufficient, forming a stalemate pattern of “supply side control and demand suppression”. Some traders have started to sell at a discount in their profit taking positions, which has weakened market confidence.
3、 Short term forecast for the future market
It is expected that the PA66 market will maintain high volatility in the short term, and there is little possibility of a significant unilateral increase or decrease in prices. Overall, strong cost support and weak demand will continue to play a game, with price trends highly dependent on changes in the raw material side and downstream order recovery progress. If there is no significant improvement in terminal demand, high prices or suppression of production will lead to the continuation of the “price but no market” situation.
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