In June, the domestic Adipic acid market continued to decline, and the decline was aggravated. According to the commodity market analysis system of the business community, as of June 29, the monthly decline of Adipic acid was 7.13%, and the market trading center moved down significantly. Near the end of the month, the quotation range of Adipic acid market is 8900-9200 yuan/ton, mainly due to the increased cost negative and weak supply and demand.

Industrial chain

As shown in the figure above, the Adipic acid industry chain fell across the board this month. Both the upper and lower industrial chain products have experienced significant declines. In particular, upstream raw materials declined the most, with Cyclohexanone falling more than 10%. After a slight rebound in May, downstream PA66 returned to the downward channel due to a lack of positive market guidance, with a monthly decline of over 5%.

Cost: Pure benzene and Cyclohexanone both fell

Upstream pure benzene continued its decline in May, slightly narrowing its decline this month compared to the more than 10% decline in the previous month. According to the Commodity Market Analysis System of Business Society, the monthly decline of pure benzene reached 5.36%. The fluctuation of crude oil has led to a negative impact on the entire domestic chemical market, resulting in abundant domestic supply and unsatisfactory market destocking effect. Coupled with a large number of port arrivals, the circulation volume of pure benzene in the market has increased, and the price of pure benzene in East China has continued to decline. Near the end of the month, the price of pure benzene in East China is in the range of 6000-6150 yuan/ton. Another upstream product, Cyclohexanone, saw an even sharper decline, down more than 12% this month compared with the 2% decline last month. Overall, the cost side is mostly bearish.

Supply side: There are many devices resuming work, and the supply pressure is obvious

From the perspective of market supply: in terms of devices, the overall operating rate of Adipic acid slightly recovered this month, rising from 65% in May to nearly 70%. The prices of major manufacturers have decreased continuously, and the quotations of Shandong’s major manufacturers have decreased by more than 1000 yuan. The manufacturer’s previous market support effect was not ideal, and shipments were hindered, resulting in concentrated price reductions for later shipments, but it was affected by weak demand. The manufacturer’s shipping speed has slowed down. At present, there is a lack of positive guidance on the supply side.

Demand side: Downstream demand performance is sluggish

In June, the downstream demand of Adipic acid was weak. Downstream factories are cautious in picking up goods, and there is no volume of orders to ensure normal start-up demand. Taking PA66 as an example, according to the monitoring of Business Society, the decline of PA66 this month was 6.07%, and the market is still hovering at the bottom. Last month, due to the impact of device maintenance, prices rebounded slightly, but this month’s supply increased, terminal procurement was not strong, and PA66 returned to the downward channel, with a significant decline. At the end of the month, the market price of PA66 in Zhejiang Province was around 19000-19700 yuan/ton.

Future prospects

With regard to the future market, Adipic acid analysts from the business community believed that, on the cost side, crude oil was affected by the hawkish expectation that the Federal Reserve’s interest rate hike had not ended, and fuel demand was suppressed. There is a lack of positive guidance on the cost side. Pure benzene and Cyclohexanone are also in a stalemate, and prices are expected to fall. The supply and demand sides may continue to maintain a weak balance, with low production and low demand continuing to play a game. In general, Adipic acid is expected to be dominated by weak operation in the short term.

According to the analysis system of the commodity market of the Business Society, as of June 30th, the average price of PMMA, a general transparent and high-quality product in China, was 14700.00 yuan/ton. This week, PMMA prices remained stable and maintained the previous trend, with no significant price fluctuations. Downstream purchases were mainly for immediate needs.

In June, the domestic general transparent grade premium product PMMA operated smoothly, with prices remaining unchanged compared to the same period last week. The purchasing atmosphere was cold, and downstream demand was average. Currently, the quotation range of mainstream manufacturers is still around 14800 yuan/ton. The operating rate is stable, and the overall market supply and demand is balanced. Manufacturers are offering discounts and taking orders, and downstream purchases are just needed.

Rubber and Plastic Index: On June 28, the rubber and plastic index stood at 643 points, unchanged from yesterday, a decrease of 39.34% from the cycle’s highest point of 1060 points (2012-03-14), and an increase of 21.78% from the lowest point of 528 points on April 6, 2020. (Note: The cycle refers to the period from December 1st, 2011 to the present).

PMMA analysts from Business Society believe that in the short term, PMMA will maintain stable operation and the range of price fluctuations is limited.

Price trend

The domestic PA66 market has shown a negative trend this month. According to data monitoring from Business News Agency, the benchmark price of domestic PA66 was 19666.67 yuan/ton on June 30th, with a decrease of -5.75% compared to the price level at the beginning of the month.

Cause analysis

This month, the PA66 market continued its previous weak trend, and overall, spot prices of various brands have declined. In terms of supply, the overall load of the domestic PA66 industry remained at around 60% in June, a narrow decrease compared to the previous period. The coexistence of enterprise construction and maintenance shows a trend of rotating negative reduction, but the on-site supply is relatively sufficient, so the supply contraction is not significant in supporting the spot goods. Poor inventory digestion has affected corporate confidence, and pricing operations are cautious. In terms of upstream, the domestic Adipic acid market continued to decline, and the low start and low demand continued to play a game, increasing the decline. The raw material side of PA66 has poor support for spot goods. In terms of demand, the situation is stable with some weaknesses, and terminal enterprises mainly rely on goods to maintain production. Buyers generally have limited acceptance of high priced sources of goods. It is expected that PA66 may continue its weak consolidation in the short term.

Future Market Forecast

The spot price of PA66 in June stabilized first and then fell. The weakening of the raw material market has led to poor support for the cost side of PA66. The load of PA66 enterprise is maintained, and the supply support is not obvious. The demand side takes goods to maintain production, and it is expected that PA66 may maintain a weak consolidation market in the short term.

According to the data monitored by the business community, as of June 29, the price of Lithium iron phosphate, an excellent power product, was 95000 yuan/ton. In June, the market of Lithium iron phosphate rose broadly. In June, the overall price of Lithium iron phosphate rose 3.26%, 1.06% higher than the price in the same period last week. At present, the mainstream price is about 95000 yuan/ton. The main contract customers do not accept new orders.

In June, Lithium iron phosphate rose slightly, the price rose, and the focus of the negotiation was high. The price at the beginning of the month was 92000 yuan/ton, and the price at the end of the month was 95000 yuan/ton, an overall increase of 3.26%. At present, the mainstream price is about 95000 yuan/ton, and the downstream replenishes as needed. The upstream Lithium carbonate price is high, and the cost side of Lithium iron phosphate is certain to support. In the short term, Lithium carbonate maintains its early trend. The manufacturer supplies only old customers, and new customers do not take orders.

Chemical Commodity Index: On June 28th, the chemical index stood at 801 points, a decrease of 2 points from yesterday, a decrease of 42.79% from the highest point in the cycle of 1400 points (2021-10-23), and an increase of 33.95% from the lowest point of 598 points on April 8th, 2020. (Note: The cycle refers to the period from December 1st, 2011 to the present).

Analysts of Lithium iron phosphate from the business agency believe that the Lithium iron phosphate market will operate stably, moderately and strongly in the short term.

According to the Commodity Market Analysis System of Business Society, the domestic aggregated MDI market experienced high volatility in June. From June 1st to 28th, the domestic aggregated MDI market price increased from 15600 yuan/ton to 16400 yuan/ton, with a price increase of 5.13% during the cycle and a maximum amplitude of 8.21%. The price fell by 9.93% year-on-year.

At the beginning of the month, the atmosphere of the domestic aggregated MDI market significantly improved, with traders facing tight supply and prices gradually rising. Major production enterprises announced the latest prices for June, boosting the market atmosphere. The downstream market slowly followed up, and the tracking atmosphere was still average. We continue to wait for digestion and follow-up.

In mid month, major production enterprises announced mid month guidance prices, which were slightly increased, boosting market sentiment and causing traders to quote higher prices. Under the concentrated boost of many positive news, reserve orders have increased, buying has improved, and prices continue to rise.

In the latter half of this month, multiple production enterprises began to inspect their devices one after another, resulting in a tight supply of goods in the market. Traders took advantage of this opportunity to increase their quotations, and there was also incremental support in the terminal export market. The market atmosphere continued to be warm.

Towards the end of the month, although major production enterprises suspended sales, traders still had relatively abundant supply of goods on hand. Downstream resistance to high prices led to demand orders, and the market atmosphere immediately weakened, leading to a narrow decline in aggregated MDI prices.

On the supply side, the operating rate of the unit is low. The 3.5+2.4 million ton/year mother liquor unit of Shanghai Lianheng has been overhauled since June 11, which affects the rectification units of Huntsman Corporation and BASF, the 400000 ton/year unit of Ningbo Phase I has been shut down for maintenance, and the 800000 ton/year unit of Phase II has been operated at low load. In addition, the load of the Fujian unit has been reduced to maintain about 50% of the operating load, which adds up to the 600000 ton/year unit of Shanghai due to the front-end raw material supply problem, Resulting in a decrease in operating load and expected shrinkage in supply and inventory of goods.

On the cost side, raw material pure benzene: The domestic pure benzene market continued to be weak in June. As of June 28th, the benchmark price of pure benzene for Shangshang Society was 6187.17 yuan/ton, a decrease of -5.69% compared to the beginning of this month (6560.50 yuan/ton). The overall demand atmosphere is weak, with downstream consumption of raw material inventory being the main factor, making it difficult for the pure benzene market to change the downward trend. Raw material aniline: In June, the aniline market was dominated by weak consolidation. As of June 28th, the benchmark price of aniline in Shangshang Society was 10225.00 yuan/ton, a decrease of -6.30% compared to the beginning of this month (10912.50 yuan/ton). The cost side of short-term aggregated MDI is bearish.

On the demand side, based on the buying gas in the first half of June, there is still more buying and rising in the downstream, with prices continuing to rise and a stronger willingness to consume inventory. As prices reach high levels, downstream resistance breeds, the market atmosphere weakens, and the price trend narrows down. The demand for short-term aggregated MDI is mixed.

In the future market forecast, as prices rise, the market atmosphere gradually weakens, and traders’ quotes are scarce, with a focus on wait-and-see. Business Society aggregates MDI analysts