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.

According to the Commodity Market Analysis System of Business Society, the domestic spandex market continued to decline in December. As of December 29th, the price of 40D spandex was 32125 yuan/ton, a decrease of 1.38% from the beginning of the month and a year-on-year decrease of 9.51%.

The cost side continues to weaken, and the pure MDI market for raw materials is declining. The spot reference in the East China region is between 20000-20300 yuan/ton for wire transfer in barrels for self pickup, a decrease of 500-1000 yuan/ton from the beginning of the month. The overall wait-and-see atmosphere in the market is strong, and downstream inquiries are light. In December, the raw material BDO was weak and downward, with average overall cost support. The PTMEG market declined, and mainstream factories quoted 17000 yuan/ton, a decrease of about 1500 yuan/ton from the beginning of the month. As of the end of December, the overall operating rate of the industry was around 78%.

Under the seasonal off-season background, the terminal elasticity, weaving, and printing and dyeing startup rates have slightly declined to around 72%. In terms of exports, as the end of the year approaches, there are signs of a rebound in foreign trade orders. In November, textile and clothing exports amounted to 23.66 billion US dollars, a decrease of 1.8%, and a month on month increase of 3%. Among them, textile exports amounted to 11.12 billion US dollars, a decrease of 0.5%, and a month on month increase of 3.8%. Clothing exports amounted to 12.55 billion US dollars, a decrease of 3%, and a month on month increase of 2.4%.

According to analysts from Business Society, as the Chinese New Year approaches, terminals will gradually take a break from mid January, leading to a rapid decline in production in the weaving industry and further contraction in demand. Due to insufficient cost support, it is expected that spandex prices will remain weak in January 2024.

1、 Price trend

According to monitoring data from Business Society, the average quotation for EPS ordinary materials at the beginning of the month was 10075 yuan/ton, and the average price for EPS ordinary materials on weekends was 10000 yuan/ton, a decrease of 0.74% and a decrease of 4.76% compared to the same period last year.

2、 Market analysis

In early December, crude oil weakened, styrene declined, and cost support weakened. The EPS wait-and-see atmosphere remains unchanged, with merchants maintaining their essential needs while the negotiation atmosphere is average. The EPS market may have slightly weakened consolidation, with the reference price for EPS ordinary materials in the South China region being around 9500-9600 yuan/ton (including tax).

In late December, with the rising prices of crude oil and styrene, supported by favorable cost factors, manufacturers raised their prices, and merchants increased their prices for shipments. The market atmosphere slightly improved, but the buying mentality remained cautious, and the continued pursuit of higher prices for styrene was limited. The market once again stabilized and consolidated.

3、 Future Market Forecast

EPS is affected by the upstream pull up, and the market atmosphere has slightly improved. It is expected that the domestic EPS market may experience a narrow range of fluctuations.

According to the commodity market analysis system of Shengyishe, the mixed xylene market in December first fell and then rose, and overall declined. On December 29th, the benchmark price of mixed xylene was 6950 yuan/ton, a decrease of 1.84% from 7080 yuan/ton at the beginning of the month, and the low point of the cycle was 6900 yuan/ton.

The external price of mixed xylene has risen, and port inventory has increased

Affected by the rebound in crude oil prices, the price of toluene in Asia gradually rose in December. As of December 28th, the price of isomeric grade xylene in Asia was between 906-907 US dollars per ton. The mixed xylene port inventory has increased compared to the previous period, putting pressure on the mixed xylene market. It is understood that as of December 28th, the total inventory of xylene in East and South China amounted to 41000 tons, a significant increase from 27500 tons in late November.

The overall crude oil price fell first and then rose this month. The cost support for mixed xylene was weak at the beginning and then strong at the end

The international crude oil prices continued to fluctuate in December, providing weak and strong support for the cost of mixed toluene. As of December 28th, WTI02 contract settlement is 71.77 yuan/barrel; The settlement price of Brent 03 contract is 77.15 US dollars per barrel.

Stable operation of xylene and necessary support for stable mixing of xylene

In December, the spot supply of xylene was normal, and the domestic PX operating rate remained above 80%. However, there were still some equipment repairs, and there was little change in spot supply. In December, international crude oil prices fluctuated and declined, and the country cancelled the preferential tax rate for imported PX from Taiwan. As a result, the price of PX in the foreign market rose. As of the 28th, the closing price in Asia was 1002-1004 yuan/ton FOB South Korea and 1027-1029 US dollars/ton CFR China. Recently, the operating rate of PX plants in Asia has been maintained, and overall, the operating rate of xylene plants in the Asian region is around 80%. The supply of PX goods in the Asian region is normal, but the domestic xylene market prices have increased due to the rise in foreign prices.

The production of phthalic anhydride is declining, and the demand for mixed xylene is weakly supported

Part of the domestic phthalic anhydride plants have been shut down for maintenance, resulting in a decline in the operating rate of phthalic anhydride and a decrease in the supply of phthalic anhydride. In addition, the shortage of naphthalene phthalic anhydride supply has led to an increase in the price of naphthalene phthalic anhydride, which in turn has driven up the adjacent phthalic anhydride market. As a result, phthalic anhydride manufacturers have low inventory and have raised their factory prices, leading to an upward trend in the phthalic anhydride market.

Domestic mixed blending demand weakened during the off-season mixed xylene demand support

Since the fourth quarter, the domestic mixed blending market has been in the off-season, with weak downstream inquiries, and the demand for mixed xylene continues to weaken. The nationwide refinery operation in December fluctuated narrowly around 7.1-7.3.

Market forecast: In the short term, the international crude oil range will fluctuate, and the cost of mixed xylene will still have some support. Domestic supply will continue to accumulate, and it is expected that mixed xylene will consolidate weakly in the later stage.