The liquid epoxy resin market is showing signs of fatigue, with prices continuing to decline. On January 19th, the market quoted factory price of purified water hovered between 12700 and 13000 yuan, and the quoted price in Shandong region was as low as 12600 to 12900 yuan/ton of purified water.

The raw material side experienced narrow fluctuations, and the bisphenol A market saw a narrow upward trend. The quoted price was around 9400-9550 yuan/ton. On Tuesday, due to the strong performance of pure benzene, the price of phenolic ketones rose, and under market pressure, the bisphenol A market rose. On Monday, the bidding for Zhejiang Petrochemical was suspended, and the starting price for enterprise premium product delivery was 9300 yuan/ton. The second round of bidding reached 9350 yuan/ton. The quotation for epichlorohydrin is around 8100-8200 yuan/ton. However, downstream purchasing enthusiasm has not shown signs of improvement, leading to an increasingly stagnant trading atmosphere on the exchange. It is currently unclear when the sluggish state of the liquid epoxy resin market will usher in a turning point.

The domestic phenol market has continued to rise, with Sinopec East China phenol prices executing at 7150 yuan/ton and Sinopec North China phenol prices executing at 7200 yuan/ton. The focus of phenol is on the rise, supported by high levels of raw material pure benzene. Traders are strongly inclined to support prices due to the support of raw materials, with further upward expectations. Looking downstream, terminal factories are cautious in chasing price increases, with low buying enthusiasm and mainly offering in demand. It is expected that the domestic phenol market will operate at a high price, focusing on the supply and demand fundamentals and market trading situation. The reference price for the East China phenol market is between 7300-7400 yuan/ton.

According to the commodity market analysis system of Business Society, the average price of polyformaldehyde in Shandong at the beginning of the year was 5400.00 yuan/ton, and at the end of the year, the average price of polyformaldehyde in Shandong was 4900.00 yuan/ton, a decrease of 9.26%. The lowest point was 4650.00 yuan/ton on July 2, and the highest point was 5487.50 yuan/ton on September 10, an increase of 18.01%.

Polyformaldehyde

The market situation of polyformaldehyde in Shandong Province in 2023 showed an N-shaped pattern. From the above chart, it can be seen that formaldehyde has been on an upward trend for three months in 2023, with the highest monthly increase in July reaching 15.05%. The increase in July is mainly due to good downstream demand, active procurement, and a shortage of polyformaldehyde supply, resulting in a significant increase in the polyformaldehyde market. Formaldehyde has been on a downward trend for 9 months in 2023, with the largest decline occurring in May, reaching 6.05%. The main reason for the decline is the continuous decline of raw material methanol, with downstream production at a low level and oversupply, leading to a weak decline in the market for polyformaldehyde.

Upstream methanol situation: In 2023, the domestic methanol market showed an “M” – shaped trend, with two obvious “ups and downs” cycles throughout the year. The “high point” of prices in February and March is mainly due to the joint support of costs and demand. Some coal mines have cleared their inventory in the early stage, and terminal procurement is relatively active. There is a significant increase in transportation vehicles, coupled with the impact of sudden related accidents. In the short term, coal prices may rise. Downstream acetic acid: demand for acetic acid may increase; Downstream chloride: chloride demand or decrease. The temporary storage of methanol demand is favorable. The methanol market has seen a dual positive rise. The lowest price is in mid June, and the support for methanol production costs has weakened. Traditional demand has entered the off-season, and demand is weak. At the same time, some methanol parking facilities have recovered. Overall, the supply in the mainland market is still relatively sufficient. From the above figure, it can be seen that methanol and formaldehyde have maintained the same curve throughout the year. The market trend of methanol has a guiding effect on polyformaldehyde.

Recently, the circulation of methanol has been restricted, and the market has shown a fluctuating upward trend. Cost support is good, and analysts from Shengyishe Polyformaldehyde predict that prices may slightly increase.

Price trend

Recently, the domestic POM market has remained stable with minor fluctuations, and spot prices have mostly remained stable. According to the Commodity Market Analysis System of Shengyishe, as of January 15th, the mixed price of domestic POM was 13050 yuan/ton, which is the same as 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 in Shengyishe, the formaldehyde market prices in Shandong region have fluctuated and fallen recently, with raw material methanol prices fluctuating and poor cost support. As the Spring Festival approaches, downstream board factories are taking early leave, and demand continues to decline. The formaldehyde market is mainly experiencing a slight decline.

In terms of supply:

Recently, the overall operating rate of domestic POM enterprises has rebounded. The industry equipment load is approximately 84%. There are relatively few maintenance arrangements in the future, and it is expected that POM production will remain at a high level. Fortunately, the inventory position of most enterprises is still not high, and the supply side still has sufficient support for POM spot goods.

In terms of demand:

Recently, downstream POM enterprises in China have been operating at a poor level, with companies mainly digesting inventory. On exchange trading was weak, and POM consumption continued to be weak. The operator needs to follow up with a small amount of urgent needs, operates cautiously, and resists high priced sources of goods. Although there may be pre holiday stocking operations in the near future, overall, the demand side’s support for POM spot prices is weak.

Future Market Forecast

Last week, the POM market remained stagnant. The operating rate of domestic polymerization plants has increased, and the inventory position of enterprises is low, resulting in moderate pressure on the supply side. Manufacturers have stabilized market confidence through strong market operations, but some merchants are under high shipping pressure. On the demand side, terminal enterprises are operating at a low level, and may continue to have holidays before holidays, leading to a decrease in load. Purchasing operations are cautious, and they are resistant to high priced goods, resulting in weak on-site trading. It is expected that the POM market may operate weakly in the near future.

According to the Commodity Market Analysis System of Business Society, the average price of nitric acid on January 8th this week was 2166 yuan/ton, and on January 12th it was 2200 yuan/ton, with a price drop of 0.77%.

The price of concentrated nitric acid has fallen, and domestic acid market transactions have been weak. Adequate supply has led to a weak decline in acid prices. Sales are mainly based on orders, and the market lacks positive news support. The focus is on market transactions.

During the period of 1.8-1.12, upstream liquid ammonia decreased by 18.55%. Downstream aniline increased by 1.3%, potassium nitrate prices decreased by 2.74%, and TDI prices increased by 1.81%. Market transactions fell short of expectations, and customers in demand for dyes, pesticide intermediates, and other products had weak purchasing power. Nitric acid analysts from Business Society predict that nitric acid prices may mainly fluctuate weakly.

According to price monitoring data from Business Society, as of January 11, 2024, the reference price for domestic n-propanol market was 7950 yuan/ton, which was basically the same as January 6, 2024. Compared with December 13, 2023 (reference price for n-propanol was 7850 yuan/ton), the price increased by 100 yuan/ton, an increase of 1.27%.

From the monitoring chart of Business Society data, it can be seen that this week (1.6-1.11), the overall market situation of domestic n-propanol remained stable and consolidated. This week, the supply and demand news of the domestic n-propanol market remained calm, with no significant market fluctuations. The production of n-propanol on-site facilities was normal, and downstream demand continued to be mainly based on rigid procurement and stocking. The transmission between supply and demand was normal, and the mentality of n-propanol operators was mild. As of January 11th, the domestic market price of n-propanol in Shandong region is around 7400-7800 yuan/ton. The normal operation of the n-propanol plant in the Nanjing area, and the overall stable operation of the n-propanol market, with a reference price of around 8500-9000 yuan/ton for the n-propanol market. Dealers in different regions still have reservations about prices, and the difficulty in monitoring prices may lead to differences in specific negotiation situations. Each region also has differences, and actual negotiations are the main focus.

Prediction of future market trends of n-propanol

At present, the overall inquiry atmosphere in the domestic n-propanol market is quiet and mild. Downstream new orders are mainly in demand, with some small-scale stocking. The mentality of n-propanol operators is normal. Business Society n-propanol data analysts believe that in the short term, the domestic n-propanol market is mainly adjusted in a narrow range, and the specific trend still needs to pay more attention to changes in supply and demand news.

Recently, the acrylic acid market has experienced a narrow decline. According to the Commodity Market Analysis System of Shengyishe, as of January 9th, the average quoted price of acrylic acid in the East China region was 6200.00 yuan/ton, a decrease of 0.20% compared to last Wednesday (January 3rd).

Factors affecting the price of acrylic acid:

Cost side: According to the commodity market analysis system of Shengyishe, the reference price for propylene on January 9th was 6643.25, a decrease of 3.28% compared to January 1st (6868.25). Since January, the domestic propylene (Shandong) market prices have first fallen and then increased, and the cost pressure on the acrylic acid market still exists.

Supply and demand side: There has been little pressure on the supply side recently, but the demand side has been light. Downstream prices have been following suit, and market transactions are mainly small orders in demand, with a strong wait-and-see atmosphere.

According to the acrylic acid analyst at Business Society, the current cost and supply side support continue, coupled with the strong downstream butyl acrylate market, which has boosted market sentiment. However, the demand follow-up is weak, and inquiries and purchases are made at a lower price for essential needs. The market game is being sorted out, and it is expected that the acrylic acid market will operate with narrow fluctuations in the short term. More attention should still be paid to market news guidance.

According to monitoring data from Business Society, as of January 9, 2023, the domestic market price of organic silicon DMC was referenced at 14760 yuan/ton. Compared with January 7 (organic silicon DMC reference 14260 yuan/ton), the price increased by 500 yuan/ton, an increase of 2.66%. Compared to January 1st (organic silicon DMC reference 13940 yuan/ton), the price has increased by 820 yuan/ton, an increase of 5.88%.

From the data monitoring chart of Business Society, it can be seen that as we enter this week, the domestic organic silicon DMC market has continued to rise, with a broad rise in the market, with a two-day increase of 2.66%. At the beginning of the week, Shandong large factories and leading companies were the first to break the stable situation and raise the price of organic silicon DMC, with an increase of about 400-600 yuan/ton. Other factories have also followed in the footsteps of large factories, raising the shipment price of organic silicon DMC by about 300-400 yuan/ton. Supported by the continuous upward trend of the organic silicon DMC market, the downstream inquiry atmosphere has improved, the enthusiasm for stocking has increased, and the overall shipment rhythm of the market has improved. In addition, some regions have reduced their load operations, and the overall supply side has also provided market support. Currently, as of January 9th, the domestic market price of organic silicon DMC is around 14600-14800 yuan/ton, with a relatively high price around 15000 yuan/ton.

Prediction of the future trend of organic silicon DMC market

At present, the trading atmosphere of organic silicon DMC on the market is good, and the mentality of the operators is positive. The transmission between supply and demand has improved, and the overall market buying sentiment has increased. According to the organic silicon DMC data analyst of Shengyi Society, the domestic organic silicon DMC market will mostly operate steadily with a strong bias in the short term, and more attention needs to be paid to the changes in supply and demand news.

Recent trends in urea prices

According to the Commodity Analysis System of Business Society, the urea market price in Shandong Province slightly increased this week. The urea price increased from 2485 yuan/ton at the beginning of the week to 2508.33 yuan/ton at the weekend, an increase of 0.94%, and the weekend price decreased by 8.19% year-on-year. On January 7th, the urea commodity index was 116.67, unchanged from yesterday, a decrease of 23.41% from the highest point in the cycle of 152.33 points (2022-05-15), and an increase of 109.84% from the lowest point of 55.60 points on August 17th, 2016. (Note: The cycle refers to the period from September 1st, 2011 to present)

Cost support is average, downstream demand weakens, and urea supply is sufficient

From the supply side perspective, the mainstream price of urea in Shandong has slightly increased this week.

From the data of the upstream and downstream industry chains, it can be seen that the urea upstream market has fluctuated and fallen this week. The price of liquefied natural gas has fluctuated and fallen, from 5510 yuan/ton at the beginning of the week to 5500 yuan/ton at the end of the week, a decrease of 0.18%, and the weekend price has dropped by 14.57% year-on-year. The price of anthracite coal has stabilized at a low level, with the price of Yangquan anthracite coal (washing medium block) at 960 yuan/ton this weekend; The price of liquid ammonia fluctuated and increased, rising from 3623.33 yuan/ton at the beginning of the week to 3640 yuan/ton at the end of the week, an increase of 0.46%. The weekend price fell by 20.98% year-on-year. Upstream raw material prices fluctuate, providing moderate support for urea prices.

From a demand perspective: Agricultural demand has weakened, while industrial demand is average. Agriculture has entered the off-season. Composite fertilizer, board, and melamine enterprises generally start construction, with a focus on procurement for immediate needs. This week, the downstream price of melamine in urea has stabilized at a high level, with a price of 7475 yuan/ton. From the perspective of supply, some enterprises have completed maintenance, resulting in a further increase in daily urea production and sufficient supply.

Slight fluctuation and decline in the future market

In mid to late January, the urea market in Shandong may experience a slight fluctuation and decline. Business Society urea analysts believe that the upstream urea market has ups and downs, and the cost support for urea is average. Downstream industrial demand is average, while agricultural demand is weakening. The daily production of urea is around 180000 tons, with sufficient supply. In the future, urea may experience a narrow range of fluctuations and decline.

In 2023, the propylene market in China showed a “V” shaped trend, with a sustained decline in the first half of the year and a weak rebound in the second half. Taking Shandong propylene as an example, the average price at the beginning of the year was 7244 yuan/ton, and the average price at the end of the year was 6965 yuan/ton, with a year-on-year decline of 3.85%. The highest point of the price appeared at 7695 yuan/ton at the end of February, and the lowest point appeared at 6155 yuan/ton in mid June. The highest point of the price decreased by 20.01% compared to the lowest point.

From the annual trend of propylene in recent years, it can be seen that the market price in 2023 has mostly been lower than previous years, especially in the first half of the year when the decline was significant and the rebound in the second half of the year was weak. Especially in the traditional peak season of gold, silver, and ten, there were no bright spots in the trend of propylene. What specific factors have caused the propylene market to show such a trend? Let’s take a look at the specific reasons.

Supply side: 2023 is still a stage of rapid expansion of propylene production capacity. According to statistics, in 2022, China’s propylene production capacity maintained stable growth, with an additional production capacity of 5.74 million tons/year and a total production capacity of 56.68 million tons/year, an increase of 11.3% year-on-year. The period from 2023 to 2025 is still the peak period for propylene production capacity, and the propylene production capacity using PDH as the production path will converge and start production. It is estimated that China’s propylene production capacity will reach 67.938 million tons/year in 2023. The successive deployment of new production capacity has had a certain negative impact on the propylene market, demonstrating the price trend of small increases and large decreases in the propylene market in 2023.

Demand side: The propylene demand market is also expanding in 2023, but the growth rate of demand cannot keep up with the expansion speed of propylene. Taking the main downstream polypropylene as an example, the production of polypropylene powder in the first half of 2023 has consistently been less than 40%. In the first half of the year, the value trend of propylene and powder materials was normal, with a small value gap between the two. The profit of powder materials was severely inverted, and the pressure on the powder industry was high. Risk was reduced through load reduction and parking. Although there was a peak season in the second half of the year, the market did not meet expectations and was ultimately dragged down by terminal demand, resulting in a dismal ending at the end of the year.

Cost wise: In the first half of 2023, the trend of propylene and crude oil was roughly consistent. However, in the second half of the year, there was a divergence starting from October. The easing of the Palestinian Israeli issue combined with the weakening of crude oil supply and demand reality led to a decline in oil prices since October 20th. As of mid December, most of the increase since July has been recouped, while propylene prices remained fluctuating within the range until the end of the year. It can be seen that the trend of crude oil is also an important influencing factor for propylene, but it is not the only influencing factor.

Market forecast: 2024 is still the peak period for propylene production capacity investment, and propylene production capacity using PDH as the production path will be intensively put into operation. Based on the comprehensive analysis of crude oil and supply and demand, the pressure on the supply and demand as well as cost in the propylene market will continue to rise in 2024. It is expected that the center of gravity of propylene prices may continue to decline compared to 2023. However, due to the continued high volatility of international crude oil expectations and the good support of propylene costs, the expected decline is relatively controllable. Taking the Shandong market as an example, it may fluctuate within the range of 4000-6000 yuan/ton in 2024, with a high-frequency fluctuation range of 5500-6000 yuan/ton. It is expected that the market price will have a low point in the first quarter and a high point in the third quarter.