Price trend

 

According to the bulk ranking data from Shengyi Society, the domestic PC market has been stagnant recently, with narrow fluctuations in spot prices for various brands. As of August 26th, the mixed benchmark price of Business Society PC is around 16250 yuan/ton, with a price increase or decrease of -1.32% compared to August 1st.

 

Cause analysis

 

Supply side: Since mid August, the overall operating rate of PC in China has remained relatively stable, with the industry average operating rate remaining the same as before, at around 75%. At present, spot prices are still at the low point of the year at the end of July, and producers are pushing prices to build a bottom, but it is difficult to make further operations. The scale of the future maintenance plan is average, and Wanhua Chemical, which had previously shut down the entire line, gradually restarted on the 23rd, with expectations of a slight increase in industry load. The on-site supply of goods will still remain abundant, and overall, the market supply side provides moderate support for PC prices.

 

In terms of raw materials, it can be seen from the above chart that the current domestic price trend of bisphenol A continues the previous weak pattern. The remote international crude oil price increase is suppressed by weak demand prospects, and the fluctuations of bisphenol A raw materials such as phenol and acetone have led to moderate support for bisphenol A on the raw material side. In recent times, there has been a trade-off between maintenance and resumption of work in the bisphenol A industry, with a flattening trend in supply and a stalemate in supply side support. The downstream stocking of the two main forces is weak and the demand for procurement is high, resulting in poor liquidity of the source of goods. Overall, bisphenol A has poor cost support for PC.

 

In terms of demand, the PC consumption pattern has not shown any improvement in the medium to long term, and the overall trend has been relatively weak compared to the previous period. The main logic of procurement is biased towards weak rigid demand, with factories taking goods to maintain production. Downstream enterprises have low loads, weak stocking enthusiasm, and low consumption levels. Buyers have strong resistance to high priced goods and have a negative response to the rally from aggregation factories. The circulation of goods on site is slow. The demand side has poor support for spot prices.

 

Future forecast

 

The PC market has been stagnant at a low level recently. The weak trend of upstream bisphenol A market continues, and the support for PC cost side weakens. The load of domestic aggregation plants is fluctuating, and there has been no improvement in supply side factors. In the early stage, PC prices fell to the low range of the year, but the market did not rebound due to bottoming out forces. On the contrary, downstream weak rigid demand consumption is difficult to drive the market. The market supply flow is poor, and the supply-demand imbalance is difficult to change in the short term. It is expected that the PC market will continue to operate at a low level in the short term.

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The price of plasticizer DOP has dropped this week

 

According to the Commodity Market Analysis System of Shengyi Society, as of August 23, the price of plasticizer DOP was 8791 yuan/ton, a decrease of 2.87% from the DOP price of 9051 yuan/ton on August 16 last weekend. The recovery of terminal demand is slow, the price of raw material octanol has fallen, costs have decreased, downstream customers’ enthusiasm for placing orders has decreased, wait-and-see sentiment has increased, plasticizer transactions have declined, and plasticizer DOP prices have fallen.

 

The cost of raw materials has decreased

 

According to the Commodity Market Analysis System of Shengyi Society, as of August 23, the price of isooctanol was 8016.67 yuan/ton, a fluctuating decrease of 3.41% compared to the price of 8300 yuan/ton on August 16 last weekend. The manufacturer of isooctanol has completed maintenance and resumed production, with sufficient supply of isooctanol; Poor demand for plasticizers has led to a decrease in downstream enterprises’ enthusiasm for purchasing octanol. Isooctanol manufacturers have lowered prices for shipments, increasing pressure on the price of isooctanol. As a result, the price of isooctanol has fallen.

 

According to the Commodity Market Analysis System of Shengyi Society, the price trend of phthalic anhydride in the domestic phthalic anhydride market fluctuated and fell this week. As of August 23, the price of phthalic anhydride in the phthalic anhydride market was 7712.50 yuan/ton, which was a 1.75% decrease from the previous weekend’s price of 7850 yuan/ton on August 16. Domestic neighboring phthalic anhydride is priced at 7500-7700 yuan/ton before leaving the factory, while domestic naphthalene phthalic anhydride is priced at 7200-7300 yuan/ton before leaving the factory. This week, the price of industrial naphthalene has stabilized, the market for naphthalene phthalic anhydride has stabilized, the market for ortho benzene has weakened and fallen, cost support has decreased, and the market for ortho benzene phthalic anhydride has fallen. The demand for plasticizers fell short of expectations, and the support for the rise in phthalic anhydride weakened, resulting in a decrease in phthalic anhydride prices.

 

Demand recovery falls short of expectations

 

According to the Commodity Market Analysis System of Shengyi Society, as of August 23rd, the PVC quotation was 5324 yuan/ton, which fluctuated and fell by 0.19% compared to the PVC quotation of 5334 yuan/ton on August 16th last weekend; Compared with the PVC quotation of 5452 yuan/ton on August 1st, it fluctuated and fell by 2.35%. July and August are the period of concentrated maintenance for domestic PVC paste resin enterprises. The supply of PVC in the domestic market has decreased, and the operating rate of the PVC glove industry is about 60%, resulting in weak demand for plasticizers. The import of PVC paste resin has increased while the export has decreased, resulting in poor downstream production growth and lower than expected demand for plasticizers.

 

Future expectations

 

According to the data analyst of Shengyi Society’s plasticizer products, in terms of cost, the price of isooctanol has fallen, the price of phthalic anhydride has fluctuated and fallen, and the cost of plasticizer DOP has decreased; In terms of demand, the recovery of terminal demand is slow, and the demand for plasticizers is lower than expected, leading to increased downward pressure on plasticizers. In the future, the cost of raw materials for plasticizers has decreased, and downstream demand has fallen short of expectations. It is expected that the price of plasticizer DOP will fluctuate and decline in the future.

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Ethylene glycol prices begin to rebound and stop falling

 

In August, the price of ethylene glycol began to rebound and stop falling. According to data from Shengyi Society, as of August 22, the average price of domestic oil to ethylene glycol was 4585 yuan/ton, an increase of 0.26% from the beginning of the week. The prices in each region are as follows:

 

The spot price range for mainstream manufacturers in East China is 4600-4900 yuan/ton; The spot price of ethylene glycol in the South China market is 4550 yuan/ton, and the mainstream manufacturers in Central China have a spot price range of 4550 yuan/ton for external execution.

 

The basis of the spot contract for ethylene glycol at the port on August 22, 2024 is close to low and far from high. The basis quotation for the 09 contract this week is+43 to+47; The basis of forward contracts is relatively strong, with a basis price of 70-74 yuan/ton in September. At present, the basis price for the 01 contract has started to be quoted, and the basis price for September will be 0-4 yuan/ton.

 

On August 22nd, the price of coal to ethylene glycol remained basically stable, with a domestic price range of 4150-4330 yuan/ton, including tax.

 

On August 21, 2024, the external price of ethylene glycol was as follows: the landed price in China was 553 US dollars/ton, and the landed price in Southeast Asia was 550 US dollars/ton. The domestic landed price has slightly increased.

 

Reasons for the rebound in ethylene glycol prices this week:

 

1. Digestion of the expected rebound in port inventory in the early stage

 

The mid month market has sufficient expectations for the expected increase in port arrival volume, and the expected accumulation of trading inventory in the early stages of the market has led to a decline in prices. Recently, there has been some reflection in inventory data. On August 22, 2024, the total spot inventory of ethylene glycol in the main port of East China was 681200 tons, an increase of 66300 tons from the total spot inventory of ethylene glycol in the main port of East China on August 15, which was 614900 tons. The expectation of subsequent imports arriving at the port has weakened, and the negative effects brought by concentrated arrivals have been digested in the early stage.

 

2. The supply-demand situation has improved

 

On the demand side, downstream demand is expected to be strong during the peak season, with the turning point of the golden September and silver October peak season, and downstream operating rates are expected to improve. On the supply side, there is a favorable price difference for the conversion to EO, and there is a strong expectation for some ethylene glycol production capacity to be converted.

 

Future expectations

 

At present, the absolute amount of explicit inventory in ports is still relatively low. Although there has been a slight accumulation of inventory recently, there is not much room for inventory to continue to rise. The main considerations are as follows:

 

1. Polyester production is recovering, with active procurement at low prices;

 

2. The overseas supply has been weak, mainly due to the relatively concentrated arrival of contracted goods at the port in the second half of August. However, since September, there has been a shortage of external shipments of ethylene glycol, mainly due to the shutdown of some facilities in Saudi Arabia due to gas shortage since mid to late July, resulting in a significant reduction in Saudi supply;

 

Therefore, in the short term, the fluctuation of ethylene glycol prices is the main trend, and there will be support for ethylene glycol prices in the future.

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The phthalic anhydride market has fallen again this week

 

According to the Commodity Market Analysis System of Shengyi Society, the price trend of phthalic anhydride in the domestic phthalic anhydride market has fallen again this week. As of August 21, the price of phthalic anhydride in the phthalic anhydride market was 7800 yuan/ton, a decrease of 0.95% from the price of 7875 yuan/ton on August 12; Compared to August 1st, the price of phthalic anhydride has continued to decline at 7887.50 yuan/ton, a decrease of 1.11%. In August, the price of phthalic anhydride declined slightly several times, and this week, the price of phthalic anhydride continued its downward trend and fell again. Domestic neighboring phthalic anhydride is priced at 7500-7800 yuan/ton before leaving the factory, while domestic naphthalene phthalic anhydride is priced at 7200-7300 yuan/ton before leaving the factory.

 

Supply side: Stable supply of goods

 

The operation of domestic phthalic anhydride plants is temporarily stable, with a production rate of about 60%. The spot supply of phthalic anhydride is stable, and the sales situation of phthalic anhydride manufacturers is average. This week, the price of industrial naphthalene is strong and stable, and the market for naphthalene based phthalic anhydride is stabilizing. The market for ortho phthalic anhydride is weak and stable, and cost support is decreasing. The market for ortho phthalic anhydride is temporarily stable.

 

The cost of phthalic anhydride raw material ortho benzene has decreased

 

According to the Commodity Market Analysis System of Shengyi Society, as of August 21st, the price of ortho benzene was 8100 yuan/ton, a decrease of 4.71% from the price of ortho benzene at the beginning of the month, which was 8500 yuan/ton. The price of ortho benzene has continuously dropped significantly, and the cost of phthalic anhydride raw materials has decreased, putting significant pressure on phthalic anhydride to decline. Industrial naphthalene manufacturers have reduced their burden and pressure, resulting in a tight supply and a narrow rise in industrial naphthalene prices. The price of Nafthalic anhydride has fallen to the bottom line of manufacturers, indicating a strong willingness to raise prices.

 

Demand side: The DOP market is experiencing weak upward momentum

 

According to the Commodity Market Analysis System of Shengyi Society, as of August 21st, the price of plasticizer DOP was 9001 yuan/ton, a decrease of 2.70% from the price of 9251 yuan/ton on August 11th last week; Compared to August 1st at the beginning of the month, the DOP price of 9500 yuan/ton fluctuated and fell by 5.25%. Last weekend, the price of plasticizers rebounded slightly, and the market demand for plasticizers was bullish. However, the market recovery did not meet expectations, and the peak season was not prosperous, resulting in weak upward momentum in the DOP market.

 

Future forecast

 

According to the data analyst of Shengyi Society’s phthalic anhydride products, in terms of cost, the continuous decline in the price of ortho xylene has led to a decrease in the cost of phthalic anhydride; On the demand side, the downstream DOP market fluctuated and fell, and the demand for plasticizers did not recover as expected. In the future, the demand for cost reduction is weak, and it is expected that the market for phthalic anhydride will decline.

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Price trend

 

According to the bulk ranking data from Shengyi Society, the domestic PC market remained stagnant in mid August, with narrow fluctuations in spot prices for various brands. As of August 20th, the mixed benchmark price of Business Society PC was around 16283.33 yuan/ton, with a price increase or decrease of -1.11% compared to August 1st.

 

Cause analysis

 

On the supply side: In mid August, the overall operating rate of domestic PC remained stable with a slight increase, and the industry average operating rate narrowly increased by 1.8% to 75% compared to early August. At the end of July, spot prices fell to the lowest point of the year, and manufacturers increased their efforts to raise prices and build a bottom. In the middle of the year, aggregation factories worked together to raise prices to cover up merchant shipments, but the results showed little effect. The scale of the future maintenance plan is average, and Wanhua Chemical plans to restart on the 20th, with industry demand expected to be high, stable, and slightly rising. The on-site supply of goods will still remain abundant, and overall, the market supply side provides moderate support for PC prices.

 

In terms of raw materials, it can be seen from the above chart that the current domestic price trend of bisphenol A continues the weak pattern in the first half of the year. In the early stage, the increase in international crude oil prices was suppressed by weak demand prospects, which in turn affected the weakness of bisphenol A raw materials phenol and acetone. Since then, the support for bisphenol A from the raw material side has weakened. The bisphenol A industry has limited changes in terms of load, with a flat trend in supply and a stalemate in supply side support. The downstream production of the two main forces has weakened, with weak inventory and rigid demand procurement, resulting in poor liquidity of the supply of goods. Overall, the support of bisphenol A for PC costs has decreased. However, due to the recent increase in geopolitical instability, there is a possibility of rising oil prices. It is recommended to closely monitor the upstream trends in the far end.

 

In terms of demand, the PC consumption pattern did not show any improvement in mid August, and the overall trend remained weak compared to the previous period. The main logic of procurement is biased towards weak rigid demand, with factories taking goods to maintain production. Downstream enterprises have low loads, weak stocking enthusiasm, and low consumption levels. Buyers have strong resistance to high priced goods and have a negative response to the rally from aggregation factories. The circulation of goods on site is slow. The demand side has poor support for spot prices.

 

Future forecast

 

The PC market remained stagnant in mid August. The weak trend of upstream bisphenol A market continues, and the support for PC cost side weakens. The load of domestic polymerization plants remains stable with a slight increase, but there has been no improvement in supply side factors. In the early stage, PC prices fell to the low range of the year, but the market did not rebound due to bottoming out forces. On the contrary, downstream weak rigid demand consumption is difficult to drive the market. The market supply flow is poor, and the supply-demand imbalance is difficult to change in the short term. It is expected that the PC market will continue to operate at a low level in the short term.

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