price trend

According to the bulk ranking data from Shengyi Society, at the end of February, the domestic PC market continued the weak consolidation trend, and most spot prices of various brands fell. As of February 25th, the mixed benchmark price of Business Society PC is around 16166.67 yuan/ton, with a price increase or decrease of -1.92% compared to early February.

cause analysis

On the supply side: At the end of February, the load of domestic PC aggregation enterprises increased at a high level, and the industry average operating rate rose by 2% to over 82%. The average weekly production remains at a super high level of over 65000 tons, and there is ample supply of goods on site. The supply-demand imbalance is intensifying, and some manufacturers have set new factory prices. In addition, the inventory position is relatively high, and the on-site pricing continues to be at a low level. The market supply side has poor support for PC prices.

In terms of raw materials: From the above chart, it can be seen that the recent fluctuation and decline in the bisphenol A market are the main reasons, and the price trend is weak. Upstream acetone trading was sluggish, with a high level turning down. Phenol oscillates during operation, and the cost side provides only moderate assistance to bisphenol A. The burden on the bisphenol A industry has increased, and the supply has relaxed. Downstream weak demand leads to a decrease in actual orders from merchants. There is a lack of bullish guidance in the market, and the confidence of industry players is weak. Overall, the support for PC costs is average.

On the demand side: The PC consumption pattern has been weak for a long time, and the overall platform level has not improved compared to mid February. The return of downstream factories during holidays is slow, and the load increase of end enterprises is not significant. Due to poor on-site stocking, the purchasing logic is focused on weak demand, and there is still a certain amount of inventory to be digested. The wait-and-see attitude of businesses is biased, and buyers are resistant to high priced goods, increasing the pressure for businesses to sell. The circulation of goods in the market is slow, and the overall trading situation is basically continuing the light performance after the holiday. The demand side has poor support for PC spot prices.

Future forecast

At the end of February, the domestic PC market fell weakly. The upstream bisphenol A market is currently weak and volatile, which weakens the support for PC cost side. The load of domestic PC aggregation plants has increased at a high level, and the supply is loose. Industry inventory is high, and supply pressure is increasing instead of decreasing. The signs of slow recovery in downstream demand remain, with poor new orders and a deepening trend of supply-demand contradictions. It is expected that PC will continue to operate weakly in the short term.

Cost support has weakened, and the market for polyester staple fiber has maintained a slight decline. According to the Commodity Market Analysis System of Shengyi Society, as of February 24th, the average market price of domestic polyester staple fiber (1.4D * 38mm) was 6948 yuan/ton, a decrease of 0.48% from the previous trading day. The price of polyester short factories is temporarily stable, with the average ex factory price of mainstream factories in Jiangsu and Zhejiang regions at 7276 yuan/ton.

The geopolitical risks in the Middle East have decreased, oil price premiums have fallen, and the increase in US crude oil inventories has affected investor confidence. On February 21st, international crude oil futures plummeted, with the settlement price of the main contract of WTI crude oil futures in the United States at $70.40 per barrel, a decrease of $2.08 or 2.9%. The settlement price of the main Brent crude oil futures contract was $74.43 per barrel, a decrease of $2.05 or 2.7%.

The domestic PTA market followed suit, with an average market price of 5036 yuan/ton in East China on February 24th, a decrease of 1.09% from the previous trading day. The closing price of PTA main futures TA2505 was 5058 yuan/ton, a decrease of 90 yuan/ton, a decrease of 1.75%, with a settlement price of 5074 yuan/ton and a daily increase of 4230 lots. In terms of self supply, two sets of PTA plants with a total capacity of 5 million tons in southern China were shut down for maintenance as planned in mid February. Some PTA plants were restarted this week, and there is sufficient stock supply. And recently, PTA’s main suppliers have delivered more spot goods, resulting in a significant increase in spot circulation.

The maintenance and restart of the polyester staple fiber device coexist, and the supply is relatively loose. Downstream spinning factories have resumed work and production, but the overall textile market has been slow to start due to limited new orders, funding issues, and labor shortages. The overall resumption pace is slightly later than in previous years, and the demand for polyester staple fibers is weak. The weaving operation rate in Jiangsu and Zhejiang is around 60%. In terms of orders, post holiday spring and summer orders fell short of expectations and are mostly in a wait-and-see state. There are no obvious signs of large orders being placed for spring and summer, and weaving manufacturers have fewer new orders. The weak supply and demand structure has dragged down market sentiment.

Business analysts believe that from a cost perspective, the market is concerned about the progress of geopolitical negotiations, and international oil prices may continue to fluctuate. Under the low processing fee, attention still needs to be paid to unplanned PTA plant maintenance. In addition, with the arrival of the “Golden Three Silver Four”, it is expected that the demand for textile and clothing essential orders will gradually increase slowly, and it is expected that the price of polyester staple fibers will remain weak in the short term.

According to the Commodity Market Analysis System of Shengyi Society, as of February 21st, the average sales price of PET was 6360 yuan/ton, and the market price fluctuated this week.

Cost wise: Crude oil prices have risen. As of 0:00 on February 21, the WTI price of US light crude oil was $72.51 per barrel, up 0.57%, and the Brent crude oil price was $76.43 per barrel, up 0.51%. At present, the supply and demand fundamentals of the polyester bottle chip market lack obvious drivers, and prices are expected to mainly fluctuate with costs.

Supply side: Xiamen Tenglong will stop for maintenance over the weekend, and China Resources is expected to restart its equipment to produce high-quality products. Next week, the production of polyester bottle chips may decrease to 292800 tons. At the same time, the processing fees in the industry are relatively low, and the supply side continues to shrink, resulting in tight spot circulation in some areas.

On the demand side, it is expected that the construction of soft drinks and oil industries will continue to increase, while the PET sheet industry has basically resumed work. Foreign trade shipments have returned to normal, and there are signs of concentrated shipments in the short term.

In response to the current market situation, Shengyi Society believes that the PET market may have limited volatility in the short term, and overall presents a narrow adjustment pattern. The actual trend still needs to pay attention to the follow-up equipment, demand situation, and cost support under the traction of crude oil.

This week, the domestic epoxy propane market showed a slight upward trend. According to the Commodity Market Analysis System of Shengyi Society, as of February 20th, the benchmark price of Shengyi Society’s epoxy propane was 8012.5 yuan/ton, an increase of 2.4% compared to the beginning of this week (7825 yuan/ton).

Price influencing factors:

Supply side: The operating rate of the epoxy propane industry this week is around 75.7%. At present, the 300000 tons/year HPPO plant of Lihua Yiwei Yuan is temporarily suspended from sale starting from the 13th due to upstream and downstream impacts; Resulting in a reduction in the supply of epichlorohydrin, low inventory, and a gradual increase in market prices.

Raw material side: The propylene market on the raw material side fluctuates narrowly, with limited cost support. According to the market analysis system of Shengyi Society, as of February 20th, the benchmark price of propylene in Shengyi Society was 6835.75 yuan/ton, an increase of 0.18% compared to the beginning of this month (6823.25 yuan/ton).

Downstream demand side: After the price of epoxy propane hit bottom and rebounded this week, the downstream demand atmosphere has slightly improved, and market trading has rebounded. As some factories gradually resume production, it is expected that downstream will provide some support to the market in the near future.

Market forecast:

Business Society’s epoxy propane analyst believes that while the supply of epoxy propane in the market is reduced, downstream demand has increased. In addition, due to the temporary suspension of sales by large enterprises, the price of epoxy propane in the market may show a slight upward trend under favorable supply and demand conditions, and more attention should be paid to market news guidance.

The listing price of Sinopec East China has been raised by 100 yuan per ton, and the listing price of Sinopec North China has been raised by 6550 yuan per ton. Despite the increase in port inventory after the holiday (up to 33000 tons as of the 17th), there is a shortage of social spot circulation resources, and trading prices have risen steadily. Downstream factories have a positive attitude towards replenishment, and inquiries in the market are more proactive, resulting in optimistic transactions. At present, the operating rate of the acetone industry is at a relatively low level of 70%, while the profit of the phenol ketone factory is still at the loss line. The factory intends to increase the listing price.

The acetone offers in major mainstream markets across the country on February 17th are as follows:

Region/ Quotation/ Daily increase and decrease

East China region/ 6600./ 80

Shandong region/ 6600./ 30

Yanshan region/ 6600./ 50

South China region/ 6550./ 100

From the perspective of Shengyi Society, the spot circulation resources of acetone are relatively tight, and traders have a positive attitude towards operation. However, terminals are also actively following the trend and will continue to operate at a high level in the short term. It is expected that the offer in the East China region will be between 6600-6700 yuan/ton.