1、 Market Overview
In July, domestic PA66 spot prices showed an overall trend of stabilizing at a low level and rebounding slightly, before falling back and oscillating again at the end of the month. At the beginning of the month, the spot price remained stable at 18366.67 yuan/ton. In the middle and late of the month, there was a brief sideways consolidation, and at the end of the month, it began to face downward pressure. On August 4th, the spot price fell back to 18133.33 yuan/ton. The overall fluctuation space during the month was narrow, and the price remained in the mid to low range of the one-year cycle, indicating a weak overall market trend. From the perspective of the moving average signal, the short-term moving average in the first half of the month crossed the long-term moving average and experienced a slight rebound. In the second half of the month, the 5-day and 10 day moving averages successively crossed the long-term moving average, and the upward momentum of the market dissipated, causing prices to once again enter a downward channel.
2、 Cost analysis
The supply of raw material adiponitrile to external sources is stable, and there is limited disturbance in overseas plant maintenance, resulting in narrow fluctuations in external raw material prices; The trend of upstream basic chemical raw materials such as benzene and cyclohexane remained stable within the month, while the bottom support for PA66 production costs was weak, and there was no significant driving force for price increases on the raw material side.
The domestic production capacity of adiponitrile continues to be released, the self-sufficiency rate of raw materials in the industry continues to increase, and there is ample room for cost control of raw materials; In mid to late July, the recovery speed of downstream production load was slower than expected, and factories actively compressed raw material procurement. The slow accumulation of upstream raw material inventory further limited the price increase space of PA66 chips. Overall, it is difficult for the cost side to drive up slice prices this month, and the market trend is mainly dominated by downstream supply and demand fundamentals.
3、 Supply and demand analysis
1. Supply side
Most mainstream PA66 production facilities in China are operating normally, and the overall operating rate of the industry is at a medium to high level, with sufficient supply of spot goods in the market; Some enterprises flexibly schedule production according to demand and moderately control production to reduce pressure during periods of low market conditions, but the overall inventory pressure has not been fundamentally alleviated.
The low market level during the month attracted some traders to hoard goods, and factory spot inventory shifted to the circulation link, resulting in a slight increase in social inventory; The market supply of goods is loose, and manufacturers have started to lower their spot prices at the end of the month to promote shipments and benefit downstream customers.
2. Demand side
July belongs to the traditional off-season for downstream nylon consumption, with fewer orders for terminal automotive parts and construction machinery parts; Downstream factories in the textile and chemical fiber modification fields are mostly maintaining their demand for goods, and their willingness to stock up on a large scale is low.
After the slicing price hit bottom in the first ten days, downstream enterprises carried out a round of replenishment operations, driving the price to briefly sideways; As the off-season atmosphere continues to deepen, downstream finished product inventory accumulates, factories gradually lower their operating rates, and procurement demand rapidly cools down. At the end of the month, downstream purchases were made on demand, and market transactions weakened, causing spot prices to fall under pressure. The overall weak downstream demand is the core factor that makes it difficult for the PA66 market to strengthen in July.
4、 Short term forecast
The short-term PA66 market is still under pressure and fluctuating. The cost side raw material market is stable and there is no strong support; At present, the price has fallen back to the low range of the cycle, and the downward space is limited.
The downstream industry is about to enter the traditional peak season pre stocking cycle, and there are expectations of a rebound in orders for the automotive and textile industries in mid to late August; However, at present, the recovery speed of terminal orders is relatively slow, and it is difficult to see a significant increase in the short term. The market is likely to remain in a low range and fluctuate, waiting for the release of downstream peak season demand.
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