On April 6th, Sinopec North China raised its listing price by 200 yuan per ton to execute a 6400 yuan/ton increase. The overhaul of the Yanshan Petrochemical plant is imminent, and the operating rate of domestic phenolic ketone plants is declining. In April, as the plant overhaul season enters, it is expected that the domestic supply of goods will decline. Moreover, at the beginning of the month, supported by the rising cost of crude oil, the reluctance to sell among cargo holders has increased, and the market is rapidly rising. It is expected that there will still be upward momentum tomorrow.

The acetone offers in major mainstream markets across China on April 6th are as follows:

Region/ Quotation/ Fluctuation range

East China region/ 6300./ 150

Shandong region/ 6400./ 100

Yanshan region/ 6450./ 150

South China region/ 6600./ 150

According to the data from the Commodity Analysis System of Business Society, the PP (wire drawing) market in the first quarter of 2023 began to fluctuate at an average price of 7858.33 yuan/ton at the beginning of the year. After the market weakened and fell before the Spring Festival holiday, and the supply and demand double increase prices rebounded after the holiday, the current average price at the end of March was 7825.71 tons. In the first quarter, the PP price fell by 0.42%, with a maximum amplitude of only 3.12%. The overall trend tends to fluctuate within a narrow range.

PP market trend in the first quarter of 2023:

After a decline in January, it rebounded: According to the monitoring of Business Society, PP wire drawing materials entered the pre holiday market on January 4th, and market participants gradually decreased. The price began to decline from 7875 yuan/ton, and as of January 11th, it reached a quarterly low of 7700 yuan/ton, with a range drop of 2.22%. Afterwards, it bottomed out and rebounded, with prices slightly recovering. After the holiday, the cash flow situation of just needed support is solid, and in addition, the raw material propylene is affected by the stocking peak before the holiday. The transaction atmosphere is good, and the price is pushing up, which is beneficial for the rapid recovery of the PP market.

Deadlocked operation in February: The price of PP wire drawing material fluctuated narrowly around the price position at the beginning of the month, resulting in a stalemate operation. According to monitoring by Business Society, the average price at the beginning of the month is 7966.67 yuan/ton, while the average price at the end of the month is 7925 yuan/ton, with a range decrease of 0.52% and a maximum amplitude of 1.76%. At this stage, the industry’s load has been significantly affected by the decline in corporate profitability, leading to a decline in high levels. However, the overall downward adjustment in the industry is limited, and the overall supply of goods is mainly abundant. The supply pressure within the month has increased instead of decreasing. The supplier’s inventory removal operation continues, and the factory price has been reduced. Meanwhile, in February, the resumption of work for downstream PP enterprises in China was slow, with the main downstream plastic weaving enterprises operating at less than 40%, and the stocking situation of terminal enterprises was not as expected, with on-demand procurement being the main focus. The market supply and demand game continues, coupled with the upstream propylene market rising and falling twice within the month, which provides general support for the PP cost side. In February, the PP price fluctuated narrowly and remained largely stagnant.

March’s volatility and decline: According to monitoring by Business Society, the first half of March followed the stalemate of last month’s market, with the decline concentrated in the second half of the month. As of March 31st, the price of PP wire drawing material was 7825.71 yuan/ton, a decrease of 1.25% from the 7925 yuan/ton at the beginning of the month. During the month, there were limited changes in the operating conditions of enterprises, with an overall stability of around 80%. Supply was stable, and the impact of industry capacity release gradually became apparent, leading to an increase in supply pressure. In terms of demand, the operating rates of downstream plastic weaving and film materials enterprises are fluctuating, and the stocking situation of terminal enterprises is average, with on-demand procurement being the main focus. The raw material propylene market has been fluctuating and declining throughout the month. Real orders are mainly traded at high and low levels, with overall poor support for PP. The main negative impact of the industrial chain lies in the low oil price, which hinders the continuous weak operation of the PP market.

Overall, the main factors affecting the PP market in the first quarter of 2023 include the following:

New devices are gradually being shipped, and the industry’s production capacity continues to expand and upgrade

In recent years, China’s polypropylene industry has been in a continuous period of expansion and capacity expansion. Since 2018, the average annual production capacity growth rate in China has been 10.27%. According to Business News Agency, except for some enterprises delaying production until 2023, the total new production capacity of domestic PP in 2022 is about 3 million tons. The significant increase in supplier pressure this quarter, coupled with an estimated 2.2 million tons of production capacity to be put into production in the second quarter, has led to a generally bearish outlook for the future.

In terms of operating rate, the operating rate of domestic polypropylene enterprises in the first quarter was generally high and stable, with narrow fluctuations in industry load around 80%. The total quarterly production is about 7.675 million tons, with stable production and abundant market supply. Excluding the Spring Festival holiday, the production remained basically unchanged compared to the previous quarter. The continuous easing of supply, coupled with the accelerated expansion of production capacity, has combined to affect supply pressure this quarter, resulting in weak pricing and operation of enterprises.

Downstream enterprises follow up cautiously and demand side consumption growth lags behind

In the first quarter of China, polypropylene consumption was generally weak and volatile. The slow resumption of work in various downstream industries of polypropylene after the Spring Festival holiday, coupled with weak fluctuations in international crude oil, highlights the phenomenon of high cost pressure and low profits for enterprises, which restricts their order situation. At the same time, the impact of imported inflation has affected PP terminal enterprises, and the demand for stocking is generally cautious, with PP consumption declining particularly significantly in February. Faced with the rapid expansion of polypropylene production capacity, its consumption situation is relatively lagging, dragging the spot price trend.

Poor cost support for raw material propylene after increasing and suppressing polypropylene

According to the monitoring of Business Society, as of March 31, the average spot price of propylene in China was 7096 yuan/ton, a decrease of 1.46% from the 7244 yuan/ton at the beginning of the year. During the quarter, the early stocking tide drove demand, downstream low level restocking, and upstream inventory was controllable. But demand was suppressed in the second half of the quarter, and prices quickly fell. The combination of weak fluctuations in raw material prices has led to unstable profitability in the industrial chain. The competition in the propylene market was fierce in the first quarter, and the current market has returned to fundamentals, with limited support for PP costs.

Future forecast: Polypropylene analysts from Business Society believe that the PP industry will continue to expand in the first quarter of 2023, and the impact of new production line discharge has not yet reached its peak, making it difficult to keep up with the growth rate of terminal demand for the time being. The mismatch between production and sales will continue to affect the PP market, and supply side pressure may become long-term. In addition, the international inflationary economic environment has dragged down the profitability of petrochemical enterprises. The overall support for PP on the cost side is not strong, and the market is positioned in a supply-demand game. Taking into account the influencing factors, the market momentum of various products in the PP industry chain was average in the first quarter, with price fluctuations leading to a decline. Starting from April, the release of liquidity funds by the central bank may benefit the PP market from a policy perspective, but the business community believes that in the long run, the mismatch between supply and demand in the market will still be the main pattern, and the PP market may not be able to rise significantly due to this.

According to monitoring by the Business Society, the price of polyester staple fibers has maintained an upward trend since April, with an average ex factory price of 7876 yuan/ton on April 3rd, an increase of 4.65% compared to the previous day.

On April 2, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) suddenly announced a significant production reduction, which is estimated to exceed 1 million barrels per day. Affected by this news, the Asian session of national crude oil saw a significant increase. As of 9:00 am Beijing time on the 3rd, Brent crude oil futures prices reached a maximum of $86.44 per barrel, while WTI crude oil futures prices rose as high as $81.69 per barrel. Meanwhile, as the domestic PX maintenance season approaches, supply is expected to be tight, and PTA continues to show a strong trend. Driven by cost benefits, the price of polyester staple fibers has increased significantly.

Under the influence of the mentality of buying up rather than buying down, it has triggered downstream speculative stocking, leading to a slight decline in short fiber finished product inventory. At present, the operating rate of pure polyester yarn enterprises is at a high level, but the lack of orders is relatively light. Manufacturers mainly produce domestic orders, and there has been no substantial improvement in the foreign market. The inventory of finished products in yarn factories continues to accumulate, and most of them maintain a cautious and on-demand procurement model for raw materials and short fibers.

Analysts from Business Society expect to continue to be supported by costs in the short term, and the price of polyester staple fibers will remain relatively high.

Price trend

The recent domestic PA66 market trend is sideways. According to data monitoring by the Business News Agency, on April 2, the average ex-factory price of domestic PA66 was 20333.33 yuan/ton, a decrease of – 3.17% compared to the price level at the beginning of March.

Cause analysis

This week, the market for PA66 was stable, with limited changes in spot prices. On the supply side, the overall load of the domestic PA66 industry is currently around 67%, almost unchanged from last week. Enterprise operations continue to be biased towards destocking, with general inventory pressure and relatively abundant on-site supply. On the upstream side, the raw material hexamethylene diamine fluctuated in a narrow range, while pure benzene in adipic acid stopped falling and warmed up supporting costs. However, the load of adipic acid was on the high side before, and the market continued to decline under pressure. PA66 raw material side has poor support for spot goods. In terms of demand, the situation is stable and weak, and terminal enterprises just need to follow up on their purchases. Buyers generally have strong resistance to high-priced sources of goods. It is expected that PA66 may continue to consolidate the market in the short term.

Aftermarket Forecast

This week, the spot price of PA66 was stable. The raw material market is relatively soft, weakening the support for PA66 cost side. PA66 enterprise load is horizontal, and the overall inventory position is average. The demand side takes goods to maintain production, and it is expected that PA66 will continue to operate horizontally in the short term.

Data monitoring shows that on March 30, the polyaluminum chloride commodity index stood at 101.49, unchanged from yesterday, down 28.85% from the cycle’s highest point of 142.64 (2021-11-01), and up 20.36% from the lowest point of 84.32 on August 18, 2020. (Note: The cycle refers to 2019-04-01 to now)

According to monitoring data, the market price of solid (industrial grade, content ≥ 28%) polyaluminum chloride in China was basically stable at around 1877.5 yuan/ton during the week of March 27-30. Currently, some water treatment enterprises in China’s main production areas have basically resumed production due to environmental shutdown, with normal production in local factories, relatively abundant inventory in stock, and little change in downstream procurement demand. This week, the cost of raw material hydrochloric acid was stable, and fuel prices rebounded slightly. The mainstream market for polyaluminum chloride remained stable during the week, with occasional slight price increases for enterprises.

Raw hydrochloric acid: According to monitoring data from the Business News Agency, the domestic market price of hydrochloric acid for the week from March 27-30 was basically maintained at around 198 yuan/ton. The upstream liquid chlorine market has a downward trend this week, with weaker cost support and a general willingness to purchase downstream. The analysis indicates that hydrochloric acid has insufficient support in the near future, or has mainly declined slightly.

Liquefied natural gas for production. According to data from Business News Agency, domestic LNG prices rebounded during the week of March 27-30. As of March 30, the average price of liquefied natural gas in China was 4344 yuan/ton, up 3.08% from the average price of 4214 yuan/ton on March 27.

Future market forecast: This week, the raw material market is stable, and fuel costs have rebounded slightly. Given that the production of polyaluminum chloride manufacturers is normal, there is sufficient inventory in stock, and there is little change in downstream demand, traders in the market expect that the future market of polyaluminum chloride may have a slight increase. Due to the tepidity of the demand side, the probability will still be mainly stable, supplemented by minor adjustments..

Aluminum price stops falling and stabilizes

According to data from Business News Agency, on March 29, 2023, the average price of domestic aluminum ingots in the East China market was 18603.33 yuan/ton, which was basically unchanged compared to the previous trading day, and the aluminum price was 18416.67 yuan/ton at the beginning of the month (March 1), up 1.01%. After recovering in January, aluminum prices fell in mid February. After the Federal Reserve raised interest rates in March, aluminum prices stopped falling and stabilized.

In the long term, the current price has retreated significantly, increasing by 6.61% compared to the recent recovery starting point (July 14, 2022), where the average market price of aluminum ingots was 17450 yuan/ton. The recent high aluminum price occurred on December 5th, with the average aluminum ingot market price of 19536.67 yuan/ton, a decrease of 4.78%.

Overview of fundamentals

In the early stage, the macro repression brought about by European and American banking industry eased, with nonferrous metals taking the lead in recovering, and aluminum prices stabilizing. At present, the overall transaction in the East China market has improved, and the circulation between traders is positive, and the transaction is fair; The aluminum price in Gongyi region is strong, and the willingness to receive goods from downstream is not strong, resulting in a strong wait-and-see mood; The spot downstream consumption in South China has rebounded, and the demand for replenishment has increased. The overall transaction is fair.

Aftermarket forecast

From the supply side, the output in March was not low, and according to inventory data, the social inventory of electrolytic aluminum is still relatively high, but there is a trend of destocking, and inventory destocking is slowing down. In the short term, electrolytic aluminum will be suppressed and alleviated by macro factors. It is expected that the aluminum price will stop falling and stabilize, and the probability of a sideways trend in the aluminum price will increase. In the near future, it is expected to wait and see the strength of downstream consumption.

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.

PET

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.

POM

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.

PA6

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.

PA66

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.

PC

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.

Aftermarket Forecast

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.

On March 27th, the price of domestic boric acid remained stable

According to the bulk list data of Business News Agency, the price of boric acid has remained stable recently, with the average price of 7850.00 yuan/ton at the weekend.

Recently, the domestic boric acid market has remained stable due to fluctuations. Downstream demand is general, while the boric acid trading market fluctuates, and downstream bargains are sought. Boric acid manufacturers price their products based on their own shipment conditions, and the price of boric acid fluctuates slightly.

The source of imported goods has recently increased, and the current external quotations are concentrated at 8200-8500 yuan/ton (the actual transaction prices of different brands, different specifications, and products are mainly negotiated).

Boric acid analysts believe that the recent domestic boric acid market has shown a trend of volatility and consolidation, with general market demand. It is expected that the market will mainly maintain stability in the future, and more attention needs to be paid to market news guidance.

Price trend

According to the price monitoring of the Business Agency, the trend of sulfur prices in East China this week has declined. On March 24th, the average price of sulfur was 1170.00 yuan/ton, a decrease of 3.57% compared to the price of 1213.33 yuan/ton on March 18th, and an increase of 3.85% compared to the beginning of the month.

In East China, the sulfur market is operating in a weak state, with on-site refinery units operating normally, market supply stable, and manufacturers actively shipping. In the downstream, terminal market follow-up has weakened. Some manufacturers have poor shipments, resulting in a stalemate among the industry. Some manufacturers have lowered their quotations to stimulate shipments based on their own shipments and inventory conditions, resulting in a decrease in sulfur prices during the week. As of the 24th, the mainstream price of solid sulfur in refineries in Shandong Province was around 1160-1250 yuan/ton; The mainstream price of liquid sulfur is 1150-1220 yuan/ton.

Downstream market of industrial chain

The downstream sulfuric acid market declined weakly, with the average domestic sulfuric acid price at 255 yuan/ton as of March 24, a decrease of 6.60% compared to 273 yuan/ton last Friday. The sulfuric acid plant is operating normally, with sufficient market supply, and downstream digestion and inventory are the main factors. The enthusiasm for entering the market to pick up goods is weak. The sulfuric acid manufacturers have poor shipments, and the inventory pressure is significant. In order to stimulate the continuous decline in the price of shipped sulfuric acid, the price of sulfuric acid has been reduced.

The market of monoammonium phosphate continued to decline. On March 24th, the average market price of 55% powdered monoammonium phosphate was 3200 yuan/ton, while on March 18th, the average market price of 55% powdered monoammonium phosphate was 3260 yuan/ton, and the market price of monoammonium phosphate was reduced by 1.84%. Downstream demand is sluggish, there are few new orders and transactions in the market, there is significant pressure on factory inventory, and the attitude of the industry is bearish. The focus of market transactions is weak and declining.

Aftermarket Forecast

According to sulfur analysts from Business News, domestic refineries operate smoothly, with sufficient market supply of goods, and the performance of the terminal industry is average. Downstream purchasing is mainly based on demand, while on-site trading is poor. Market performance is oversupply, and the mindset of the industry is deadlocked. It is expected that the short-term sulfur market will continue to operate weakly, with specific attention paid to downstream follow-up.

Trade name: calcium carbide

Latest price (March 23rd): 3200 yuan/ton

On March 23rd, the factory price of calcium carbide in the northwest region dropped significantly, down 150 yuan/ton or 4.48% compared to March 22nd. Compared to the same period last year, the year-on-year decrease was 28.36%. The price of raw material Shenmulan charcoal is around 1250 yuan/ton, with low price consolidation and average carbide cost support. The downstream PVC market has recently declined slightly, and downstream customers’ enthusiasm for calcium carbide procurement has weakened. Superimposed high calcium carbide inventory, resulting in oversupply.

In the future, it is expected that the ex-factory price of calcium carbide in the northwest region may fluctuate slightly and fall, with the main trend being consolidation: the average price quoted by manufacturers is around 3000 yuan/ton.