Price trend

Recently, the domestic POM market has continued to show a positive trend, with spot prices continuing to rise. According to the Commodity Market Analysis System of the Business Society, as of July 21, the average factory price of domestic POM was 12150 yuan/ton, a decrease of+9.46% compared to the price level at the beginning of the month.

Cause analysis

In terms of raw materials:

According to the analysis system chart of the commodity market of the Business Society, the price of formaldehyde in the Shandong region increased this week. The price of raw material methanol has risen, with strong cost support. Formaldehyde is mainly driven by rising costs, with manufacturers leading the market. However, poor demand from downstream panel factories has limited the increase in formaldehyde, and it is expected that the price of formaldehyde in Shandong will mainly fluctuate in the short term.

On the supply side:

The operating rate of domestic POM enterprises has recently remained high, with the current industry load of about 92% approaching full capacity. The high load situation continues, but after initial inventory removal, most enterprises have no inventory pressure, and even have negative inventory situations. In addition, some enterprises have maintenance plans in the later stage, and the current POM supply is tightening.

In terms of demand:

Currently, there is a tight supply of POM goods on the market, and the enthusiasm of terminal enterprises to stock up has been strengthened. However, later restrictions on electricity and other factors may continue to affect downstream enterprises’ operating rates, and the release of consumption will be affected, limiting the driving effect on spot prices. Traders have decent confidence.

Future Market Forecast

The POM market rose this week. The operating rate of domestic polymerization plants remains high, and there is a tight supply of goods on site. There is currently no industry inventory pressure, and suppliers have strong support for spot goods. On the demand side, downstream enterprises have started construction on a low level and the order situation is average. There is currently some bullish sentiment on the market, and it is expected that the bullish sentiment in the POM market may weaken in the short term due to the impact of off-season demand.

In the first half of 2023, the market of Epichlorohydrin will decline. According to the commodity market analysis system of the business community, the average price of Epichlorohydrin enterprises will be 9100.00 yuan/ton on January 1, 2023, and the average price of Epichlorohydrin enterprises will be 7575.00 yuan/ton as of June 30. The market will fall by 16.76% in half a year.

The first quarter of 2023: In January, the spot supply in the Jiangsu and Shandong markets was tight, and companies had a high price mentality. Before and after the Spring Festival, the market remained sluggish and stable, and the prices of companies remained stable. In February, there was significant cost support, but downstream demand was weak. Only small orders were needed for procurement, and factory shipments were under pressure. Accumulated inventory increased, and the supply and demand side dragged down the market. In March, the cost support remained. Some Epichlorohydrin units were shut down or operated at reduced load, but the demand support was weak. The downstream mainly consumed inventory raw materials, the market mentality was under pressure, and the focus of Epichlorohydrin negotiations was weak.

The second quarter of 2023: In the first ten days of April, some devices are in a shutdown state, the market spot supply is tight, and the downstream market inquiries increase, supporting the rise of Epichlorohydrin market. In the middle and late ten days, as some devices are restarted in succession, the market supply increases, the demand side dominates the market trend, and the Epichlorohydrin market fluctuates upward. In May, the production capacity utilization rate at the supply end remained low, but the demand follow-up was limited. Downstream, there was a high consumption of inventory raw materials, and there was mainly a demand for moderate replenishment on dips. The market trading atmosphere was light, and the market was weak. In June, the demand side dominated the market, the main downstream epoxy resin was weak, the consumption of contract volume and inventory was dominant, and the enthusiasm for market inquiry was not high. Just when small orders were needed to follow up, the market transaction continued to be under pressure, and the carrier delivered at the margin. Under the drag of demand, the focus of Epichlorohydrin market negotiation continued to decline.

Upstream and downstream: upstream propylene. According to the commodity market analysis system of the business community, as of June 30, the average spot price of domestic propylene was 6518.25 yuan/ton, down 10.03% from 7244.60 yuan/ton at the beginning of the year, and the cost was weak in the face of Epichlorohydrin market support. The downstream epoxy resin, according to the commodity market analysis system of the business community, the reference price of the epoxy resin was 12533.33 on June 30, a decrease of 20.84% compared with January 1 (15833.33), which was insufficient to support the Epichlorohydrin market.

After the weak consolidation of the market in July, the factory production and marketing have no pressure to support the market’s price mentality. At present, the cost side has some support, but the demand side performance is average. It is expected that the epoxychloropropane market will be consolidated in the short term, and more attention should be paid to the market news guidance.

Recent price trends of calcium carbide

According to the Commodity Market Analysis System of the Business Society, the factory price of calcium carbide in the northwest region has slightly increased this week. This week, the average ex factory price of mainstream calcium carbide manufacturers in northwest China increased from 2866.67 yuan/ton at the beginning of the week to 2950.00 yuan/ton at the weekend, an increase of 2.91%. Weekend prices fell by 23.04% year-on-year. On July 16, the calcium carbide commodity index was 77.29, unchanged from yesterday, a decrease of 63.58% from the cycle’s highest point of 212.23 points (2021-10-26), and an increase of 39.29% from the lowest point of 55.49 points on March 14, 2016. (Note: The cycle refers to the period from September 1st, 2011 to the present)

Upstream support is average, while downstream demand increases

From the supply side perspective, the factory price of calcium carbide in the northwest region has slightly increased this week, and the inventory of manufacturers is average.

The upstream blue charcoal market has stabilized at a low level, while the downstream PVC market prices have slightly fluctuated and increased. This weekend, the price of Shenmulan charcoal is around 1020 yuan/ton, and the price is temporarily stable, with average cost support. This week, the PVC market price increased from 5498.33 yuan/ton at the beginning of the week to 5615.00 yuan/ton at the weekend, an increase of 2.12%. Weekend prices fell by 13.60% year-on-year. The PVC market price has fluctuated slightly, leading to an increase in downstream customers’ enthusiasm for purchasing calcium carbide. The downstream PVC market has a positive impact on the price of calcium carbide.

Calcium carbide may fluctuate or rise in the aftermarket

In late July, the calcium carbide market may experience a narrow range of fluctuations and declines. The price of raw material blue charcoal has stabilized at a low level, with average cost support. The downstream PVC market has slightly increased, and downstream demand has increased. It is expected that the price of calcium carbide in the northwest region will fluctuate and rise in a narrow range in late July, with consolidation being the main focus.

1、 Price trend

According to the monitoring of the commodity market analysis system of the Business Society, the spot price of PVC carbide SG5 has risen this week. Last Friday, the average domestic PVC price was 5490 yuan/ton, and this Friday’s average price was 5615 yuan/ton, with a price increase of 2.28% during the week.

2、 Market analysis

The price of PVC in the domestic Spot market rose this week. The increase in upstream calcium carbide prices this week, coupled with the delay of two policies in the “16 Financial Regulations” issued on the evening of July 10th, has boosted the confidence of the PVC market. The futures market continues to rise, and spot prices are gradually following suit. As of now, the quotation range for PVC5 carbide materials in China is mostly around 5450-5900 yuan/ton.

On July 13th, international crude oil futures rose. The settlement price of the main contract for US WTI crude oil futures was $76.89 per barrel, up $1.14 or 1.5%. The settlement price of the main contract for Brent crude oil futures was $81.36 per barrel, an increase of $1.25 or 1.6%. Inflation in the United States has cooled beyond expectations, the necessity for the Federal Reserve to raise interest rates has decreased, coupled with seasonal peak demand from refineries and OPEC production cuts in oil producing countries, heating up the oil market.

In terms of calcium carbide, according to data monitored by the Business Society, the prices of calcium carbide manufacturers have increased this week. Last Friday, the average price of calcium carbide was 2866.67 yuan/ton, while this Friday’s average price was 2950 yuan/ton, with a price increase of 2.91% during the week. The price of raw material Shenmulan charcoal is around 1020 yuan/ton, with low prices consolidating and average cost support for calcium carbide. The downstream PVC market has recently slightly increased, and downstream customers have increased their enthusiasm for purchasing calcium carbide. In the future, it is expected that the factory price of calcium carbide in the northwest region may slightly increase, with consolidation being the main focus. The average price quoted by the manufacturer is around 3000 yuan/ton.

In terms of terminal real estate, on the evening of July 10, the People’s Bank of China and the National Administration of Financial Regulation issued the Notice on Extending the Term of Policies Related to Financial Support for the Steady and Healthy Development of the Real Estate Market (hereinafter referred to as the “Notice”). If there is a term of application for the relevant policies in the “Article 16 of Finance”, the term of application will be uniformly extended to December 31, 2024. It is understood that there are two policy extensions, involving stock financing for real estate enterprises and special loan matching financing issued by commercial banks. In the view of industry insiders, the extension of the two policies helps to promote project completion and delivery, while ensuring the delivery of the building, it also helps to repair market expectations.

3、 Future Market Forecast

PVC analysts from the business agency believe that the trading atmosphere in the PVC Spot market is good and the price is rising this week. The increase in upstream calcium carbide prices has provided strong support, coupled with the extension of two policies in the “Financial 16″, which has also boosted the confidence of the PVC market. It is expected that the PVC market will be relatively strong in the short term, and we will closely monitor changes in the news.

According to data monitoring by Business Society, as of July 12, 2023, the domestic market price of butanone was referenced at 7200 yuan/ton. Compared with July 7, 2023 (reference price of butanone was 7233 yuan/ton), the price was reduced by 33 yuan/ton, a decrease of 0.46%.

From the data monitoring chart of Business Society, it can be seen that this week (7.7-7.12), the overall market trend of domestic butanone showed a narrow downward trend. Entering this week, downstream businesses of butanone were cautious in purchasing, and there was a strong wait-and-see sentiment in the butanone market. The transmission between supply and demand was slow. At the beginning of the week, some butanone factories and suppliers actively lowered the price of butanone, with a narrow range of about 100 yuan/ton. Subsequently, the overall butanone market was weak and organized. As of July 12th, the domestic butanone market price was around 7000 to 7400 yuan/ton, and the lower price was around 6600 yuan/ton, The higher price is around 7500-7600 yuan/ton.

Analysis of the aftermarket of butanone

At present, the trading atmosphere on the market for butanone is relatively light, and the overall operation on the market is cautious. The butanone data analyst from the Business Society believes that in the short term, the domestic butanone market will mainly adjust and operate in a narrow range, and the specific trend needs to pay more attention to changes in supply and demand news.