In the first half of 2023, the domestic liquid ammonia market experienced a significant decline. According to the Commodity Market Analysis System of Business Society, the drop in liquid ammonia for the first half of the year exceeded 42%. The price in Shandong, the main production area, dropped from 4700 yuan/ton at the beginning of the year to 2700 yuan/ton on June 30. The price has almost halved. The main reason is the decline in coal and natural gas prices on the cost side, as well as the rapid decline in prices due to the imbalance between supply and demand.

Let’s take a specific look at the trend of each stage:

January coincides with a holiday, with limited logistics and transportation, as well as the impact of rainy and snowy weather. Coupled with the recovery of supply from northern ammonia enterprises, the market mainly focuses on reducing prices to clear inventory. The market for liquid ammonia has started to decline. The highest price dropped from nearly 4700 yuan/ton at the beginning of the year to nearly 4100 yuan at the end of January.

After mid February, the price of liquid ammonia began to rise, mainly because after the end of the Spring Festival, businesses entered the market, and downstream stores were mostly replenished after the holiday. During this period, unexpected centralized maintenance support was provided for enterprise equipment, and downstream spring cultivation began to stock up. The favorable supply and demand drove the ammonia market up. The market continued until mid to late March. The price rebounded from the bottom to around 4500 yuan, without breaking the high point at the beginning of the year.

After April, the supply and demand bearish situation overlapped, and the decline of liquid ammonia accelerated. A large number of early maintenance devices resumed work, and domestic manufacturers concentrated on reducing the outlet price of liquid ammonia in turns to reduce inventory pressure. The monthly decline of enterprises generally exceeds a thousand yuan. In addition, imported goods have impacted the domestic market, and a large amount of overseas liquid ammonia has arrived at the port, resulting in a significant oversupply of domestic supply. The superimposed demand entered the agricultural Window period period, and the agricultural demand became weak, while the industrial demand failed to follow up in time. Liquid ammonia reached a new low in the past two years in late June. The weak market continued until the end of June.

Future prospects

Liquid ammonia analysts from Business Society believe that the current price of liquid ammonia has reached a bottom, and the market has a willingness to rebound and repair. And since early July, ammonia prices have stabilized and stopped falling. There are signs of a rebound in prices this week. With the strengthening of maintenance efforts by manufacturers, the supply-demand contradiction has significantly eased, and the trend of tight supply will maintain a mild upward trend in ammonia prices in the short term. However, in the middle of the second half of the year, it may still be difficult for liquid ammonia to overcome its weak situation. On the one hand, there is heavy cost pressure, and it is difficult for coal and liquefied gas prices to perform well. In addition, there is also a situation of overcapacity on the supply and demand side. Liquid ammonia may experience price fluctuations during brief periods due to regional supply imbalances. The overall trend may maintain a weak and volatile pattern.

According to monitoring data from Business Society, as of June 30, 2023, the reference price of n-butanol in the Shandong region of China was 7316 yuan/ton. Compared with January 1 (reference price of n-butanol was 8166 yuan/ton), the price was reduced by 850 yuan/ton, a decrease of 10.41%.

From the data monitoring chart of the Business Society, it can be seen that in the first half of 2023, the n-butanol market in the Shandong region of China experienced frequent fluctuations, and the overall market situation showed a fluctuating and declining trend.

In the first quarter of 2023, the n-butanol market fell first and then rose, ending the overall decline, with a 5.90% decline in the first quarter. After the New Year’s Day in 2023, the market price of n-butanol briefly declined. However, as spring approached, the spot supply on the market tightened, and the n-butanol market stopped falling and retreated. After the Spring Festival, downstream demand for n-butanol was weak, and the overall market situation encountered a weak decline. In January, the n-butanol market overall fell by 24.5%. In February, due to the continuous shortage of downstream demand, the n-butanol market continued to move towards the lower end amidst fluctuations, with a decline of 12.08% in February. In March, the overall market situation of n-butanol in the Shandong region of China saw an upward trend. The downstream market of n-butanol is experiencing concentrated replenishment, and the demand side is boosting the steady upward trend of the n-butanol market. With the continuous warming of the weather, the downstream demand for n-butanol continues to gradually release, and the supply side of n-butanol is tightening. Supported by both supply and demand, the overall n-butanol market rose by 9.95% in March.

In the second quarter of 2023, in April, downstream demand for n-butanol returned to calm, with downstream digestion of raw materials being the main focus, and the overall market was operating at a high level with a decline of 7.33% during the month. In May, after the Labor Day, the supply of n-butanol in the market became tight, and the supply side supported the market to rise broadly. In the late ten days, the market supply gradually recovered, and the focus of n-butanol market fell back. In May, the n-butanol market rose first and then fell, and the overall market rose slightly. In June, the n-butanol market as a whole showed a downward trend followed by an upward trend. At the beginning of the month, there was insufficient support from the demand side for n-butanol, which hindered the supply and demand transmission of n-butanol, and the market for n-butanol continued to decline. In late June, the n-butanol market ushered in a stop falling and upward movement. Before the Dragon Boat Festival, the downstream of n-butanol ushered in periodic replenishment. The downstream demand turned better. The supply and demand of n-butanol in the market were conducted smoothly. The overall focus of the market continued to move up, with an overall increase of 2.09% in June.

Aftermarket analysis of n-butanol

At present, the n-butanol market is generally stable and operating. The overall trading atmosphere on the market is light, and the news is relatively calm. The n-butanol data analyst of the Business Society predicts that in the short term, the domestic Shandong region’s n-butanol market will mainly adjust and operate in multiple ranges, and the specific trend needs to pay more attention to specific news changes on the supply and demand side.

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.