Weak stability of ethylene oxide prices in June

According to the data of the business society, the average price of ethylene oxide in the domestic Spot market will be 6000 yuan/ton on June 28, 2023, which will be the same as that at the beginning of the month; Compared to the beginning of the year, the price was 6800 yuan/ton, a decrease of 11.76%.

Overview of ethylene oxide industry chain

The terminal demand is lower than expected, and the price center of the main downstream polycarboxylate water reducing agent monomer has shifted downward. The production enthusiasm of polycarboxylate water reducing agent monomer enterprises is not high, and the demand for ethylene oxide is weakened.

Market Interpretation

At the end of last month, large factories lowered their prices by 500 yuan/ton. In June, epoxy ethane basically maintained a horizontal operation of 6000 yuan/ton. At present, prices are relatively low, and some manufacturers have hit the cost line, facing increasing pressure to lose money. From the supply side perspective, in June, some ethylene oxide factories had passive production reductions or proactive load reduction to balance enterprise benefits. In addition, some production factories switched to producing ethylene glycol or adjusted their own usage ratio to alleviate production and sales pressure. On the demand side, the main downstream polycarboxylate water reducing agent still has significant losses, and the factory’s production enthusiasm is not high. On the other hand, downstream has entered a seasonal off-season, with limited consumption volume, and overall demand for ethylene oxide is not strong.

Overall, the supply and demand of ethylene oxide are weak, and the price is horizontally stagnant at a low level. From the perspective of cost, the domestic mainstream processes are divided into Naphtha, ethane/mixed alkane, external ethylene production, MTO route, etc; Among them, the Naphtha route accounts for about 49%, followed by ethane and ethylene production. The cost of ethylene production is relatively favorable, and the cost pressure on crude oil routes is relatively high.

In the short term, the cost support for ethylene oxide is weak, and the supply and demand pattern is also difficult to improve. It is expected that the price will continue the current trend, with weak fluctuations as the main trend.

1、 Price trend

According to the Commodity Analysis System of Business Society, the overall price of caustic soda remained weak this week. On June 20th, the average market price in Shandong was 818 yuan/ton, while on June 27th, the average market price in Shandong was 792 yuan/ton, a decrease of 3.18% and a decrease of 36.74% compared to the same period last year. On June 26th, the caustic soda commodity index was 115.40, unchanged from yesterday, a decrease of 56.53% from the cycle’s highest point of 265.47 points (2021-10-27), and an increase of 77.24% from the lowest point of 65.11 points on October 9th, 2020. (Note: The cycle refers to the period from September 1st, 2011 to the present)

2、 Market analysis

According to the Commodity Analysis System of Business Society, the overall price of caustic soda in China was weak this week. The current average market price in Shandong region is around 720-800 yuan/ton. The mainstream factory quotation for 32% liquid alkali in Hebei region is around 720-900 yuan/ton. This week, the overall price of caustic soda has declined, and currently, the supply of caustic soda enterprises is relatively sufficient. The short-term demand for downstream alumina is average, with more purchases made on demand and a supply-demand game. The price of caustic soda remains weak.

According to the price monitoring of the Business Society, in the 25th week of 2023 (6.19-6.23), there were 0 products that rose or fell in the chlor alkali industry price list, 2 products that fell, and 5 products that rose or fell to 0. The main commodities falling include caustic soda (-1.92%) and flake soda (-0.40%). This week’s average increase or decrease was -0.33%.

Analysts from Business Society believe that in the near future, the price of caustic soda has been weak, and the overall supply is relatively sufficient. Downstream alumina still purchases more on demand in the near future. There is no favorable support, and the supply and demand game comprehensively predicts a weak operating market in the later stage, depending on the downstream market demand.

According to the monitoring of the commodity market analysis system of the business community, the price of 50% Potassium sulfate at the beginning of this month was 3500 yuan/ton, and the price of 50% Potassium sulfate at the end of this month was 3300 yuan/ton, down 5.71%.

Potassium sulfate price reference: enterprises in Shandong and Hebei: 52% powdered Potassium sulfate factory price reference 3200-3300 yuan/ton, 50% mainstream factory price reference 3100-3160 yuan/ton. Northeast enterprises: the ex factory quotation of 52% powdered Potassium sulfate is 3000-3080 yuan/ton.

In June, the domestic market demand for Potassium sulfate was general, and the price continued to the previous level. The shipment of Mannheim Potassium sulfate in some regions was relatively smooth, and the production and marketing balance was basically maintained. However, the demand in the southern market was still not strong, and the shipment was slightly difficult. At present, the operating rate of the main downstream compound fertilizer plants is low, and the summer market is basically over. The purchase of follow-up raw materials is relatively cautious, based on demand.

Prediction: The domestic potassium fertilizer market has light trading volume and currently lacks positive support. It is expected that the market price may be dominated by a weak consolidation trend.

1、 Price trend

According to the commodity market analysis system of the business community, as of June 25, the reference average price of 85% thermal phosphoric acid in China was 6290 yuan/ton, which was 1.45% higher than the reference average price of 6200 yuan/ton on June 19.

According to the Commodity Market Analysis System of Business Society, as of June 25th, the reference average price of 85% wet process phosphoric acid in China was 6250 yuan/ton, which is lower than the reference average price of 6250 yuan/ton on June 19th. The domestic wet process phosphoric acid price remained stable this week.

2、 Market analysis

The market price of phosphoric acid has slightly increased this week, with phosphoric acid companies mainly increasing their prices. The raw material yellow phosphorus operates steadily and steadily, with acceptable cost support. Downstream still maintain a wait-and-see attitude, with immediate replenishment being the main focus, and the market trading atmosphere is light. As of June 25, the ex factory quotation of 85% thermal phosphoric acid in Yunnan was about 6400 yuan/ton, that of 85% thermal phosphoric acid in Hubei was about 6000-6300 yuan/ton, and that of 85% thermal phosphoric acid in Sichuan was about 6200 yuan/ton. The domestic market quotation for 85% wet process phosphoric acid is around 5550-6700 yuan/ton.

In terms of raw material yellow phosphorus, the Yungui yellow phosphorus market has been stable and improving this week. At present, the yellow phosphorus market is facing a tight supply of goods, with an increase in market inquiries and a focus on price competition from enterprises. The manufacturer mainly issues preliminary orders, and the enterprise will not provide external quotations for the time being. The actual order will be discussed in detail. As of now, the quotation is around 22800-23000 yuan/ton, and the actual transaction is subject to negotiation.

In terms of raw phosphorus ore, the overall domestic phosphorus ore market is showing a weak decline. Prior to the holiday, the downstream stage stocking of phosphate ore was generally carried out, and the weak demand side continued to loosen the support for the phosphate ore market. Phosphate ore shipments gradually slowed down, and some mining companies implemented early shipment plans. The supply and demand sides of phosphate ore showed a stalemate, and some mining companies started to sell at discounted prices, lowering the prices of mid to high grade phosphate ore shipments. As of June 25th, the domestic market price of 30% grade phosphate ore is around 950-1080 yuan/ton.

3、 Future Market Forecast

Phosphoric acid analysts from Business Society believe that the price of thermal phosphoric acid has slightly increased this week, and the support of raw material yellow phosphorus is still acceptable. However, downstream demand is average, and the phosphoric acid market is mainly cautious and wait-and-see. It is expected that in the short term, the market price of phosphoric acid will be adjusted and operated in a narrow range.

1、 Price trend

According to the commodity analysis system of the business agency, the price of Neopentyl glycol in the domestic market fell slightly this week. This week, the average price of Neopentyl glycol in the domestic mainstream market fell from 9766.67 yuan/ton at the beginning of the week to 9666.67 yuan/ton at the end of the week, a decline of 1.02%. Weekend prices fell 40.82% year-on-year. On June 19, the Neopentyl glycol commodity index was 45.78, down 0.81 points from yesterday, down 55.82% from the cycle’s highest point of 103.61 (2021-09-22), and up 6.34% from the lowest point of 43.05 on November 28, 2022. (Note: The cycle refers to the period from September 1st, 2021 to present)

2、 Market analysis

The price of Neopentyl glycol in the mainstream market fell slightly this week.

From the perspective of Neopentyl glycol upstream raw material market, the domestic Isobutyraldehyde market price rose slightly this week. This week, the average price of Isobutyraldehyde in the domestic mainstream market rose from 6566.67 yuan/ton at the beginning of the week to 6600.00 yuan/ton at the end of the week, up 0.51%. Weekend prices fell by 5.63% year-on-year. The price of upstream raw material market rose slightly, with general cost support. Affected by the supply and demand side, it has a positive impact on the price of Neopentyl glycol.

3、 Future prospects

In late June, the market trend of Neopentyl glycol may slightly fluctuate and decline. Although the upstream Isobutyraldehyde market rose slightly and cost support increased, the increase was small and the support was limited. The downstream paint market is average, and the enthusiasm for downstream procurement is average. The Neopentyl glycol analysts of the business agency believe that the short-term Neopentyl glycol market is dominated by small fluctuations and falls in the market under the influence of supply and demand, raw materials and other aspects.

Price trend

Recently, the domestic PA6 market has been plagued by bullish and bearish trends, with various spot prices showing mixed fluctuations. According to data monitoring from Business Society, as of June 16th, the average factory price of PA6 in China was 13500 yuan/ton, a decrease of -0.18% compared to the average price level at the beginning of the month.

Cause analysis

In terms of raw materials:

It can be seen from the figure above that the market price of Caprolactam fell slightly this week. The price of raw material pure benzene has decreased, weakening cost support. The spot supply of Caprolactam market is tight, and the supply side is still supported. The downstream purchase intention is weak, and the purchase is on demand. It is expected that the narrow range of Caprolactam market will be dominated in the short term.

On the supply side:

In the near future, the overall load of PA6 production enterprises has remained relatively stable, operating with narrow fluctuations below 70%. This week, the industry’s load increased narrowly, and the market supply remained stable. There is a risk of inventory position continuing to rise, and the supplier’s support for spot goods is average, with factory pricing under pressure.

In terms of demand: Downstream, the load of the weaving and spinning industries has fluctuated. The actual trading is generally concentrated in low-end spot goods. The overall atmosphere of stocking on site is cautious, with no improvement in the situation of new orders. Buyers are resistant to high priced sources, and the overall demand for PA6 chips is average.

Future Market Forecast

Recently, the PA6 market has been fluctuating in a narrow range. The load of domestic polymerization plants is stable, and the supply remains sufficient. In terms of demand, it is average, and stocking tends towards low-priced sources. The price of Caprolactam weakened, and the support of PA6 cost side fell back. It is expected that the PA6 market may continue to fluctuate and consolidate in the short term.

This week (6.5-6.12), the market of chloroform was weak and declined. According to the data of the business society, as of June 12, the price of chloroform bulk water in Shandong was 2125 yuan/ton, down 4.49% from 2225 yuan/ton last Monday. The price of raw methanol fluctuates slightly, and the cost support of chloroform is weak; The replenishment of some downstream enterprises ended, and the demand for chloroform weakened again; Although some enterprises have shut down and reduced the burden of methane chloride devices, the overall supply side is still loose. Chloroform market fluctuated and fell back.

This week (5.29-6.5) saw slight fluctuations in the start of the methane chloride plant.

This week (6.5-6.12), the price of raw methanol was adjusted at a low level, and the cost support of chloroform was still weak. According to the Commodity Market Analysis System of Business Society, as of June 12th, the spot price of methanol was 2041 yuan/ton, a decrease of 6.35% from last Monday’s 2180 yuan/ton.

Short term replenishment orders have ended, coupled with the gradual end of the domestic refrigerant market peak season, some downstream refrigerant R22 enterprises have temporarily stabilized their parking and maintenance prices. In the short term, chloroform will rise and fall back. In addition, the total production quota of R22 will be reduced by 19% to 181800 tons in 2023, which will make it difficult to improve the demand for Chloromethane in the medium and long term.

According to the methane chloride data analysts of the business society, although the overall domestic demand support for chloroform is weak at present, and the cost level is low, it is expected that the chloroform market will be weak in the later period.

According to the Commodity Market Analysis System of the Business Society, the domestic methanol market continued to be low. From June 5th to 9th (as of 15:00 in the afternoon), the average price of the East China port in the domestic methanol market dropped from 2180 yuan/ton to 2075 yuan/ton. During the cycle, prices decreased by 4.82%, with a month on month decrease of 13.60% and a year-on-year decrease of 25.89%.

The domestic methanol market continues to decline, with coal prices falling and methanol production cost support weakening. Traditional demand has entered the off-season and demand is weak. At the same time, some methanol parking devices have recovered, and new investment devices such as Xuzhou Longxingtai and Jiyang New Energy have production plans in the near future. Overall, the supply in the mainland market is still relatively sufficient.

By the end of June 9, methanol futures in Zhengzhou Commodity Exchange had risen. The main methanol futures contract 2309 opened at 2045 yuan/ton, with a maximum price of 2055 yuan/ton and a minimum price of 2013 yuan/ton. It closed at 2043 yuan/ton in the end of the day, an increase of 2 yuan/ton or 0.10% compared to the previous trading day’s settlement. The trading volume was 1378258 lots, the position was 1746563 lots, and the daily increase was 114916 lots.

On the cost side, coal prices have weakened, but the inventory of enterprises is running at a low level, with little pressure. This provides some support for prices, and some northwest enterprises are still able to ship. The cost of methanol is relatively weak.

On the demand side, downstream dimethyl ether: a factory in East China has shut down, a unit in Henan has reduced its load, and the demand for dimethyl ether has decreased; Downstream chloride: reduced demand for chloride; Downstream formaldehyde: formaldehyde demand may decrease. The demand for methanol is mixed.

On the supply side, maintenance of a set of devices in Hengxin High Tech, Shenhua Xilaifeng, and Heilongjiang; Guangxi Huayi, Jiuyuan Chemical, and Sinopec SVW units have reduced production; Pucheng Clean Energy, Xinjiang Guanghui, and Jinfeng Wenxi devices have been restored. The overall recovery exceeds the loss, so the capacity utilization rate has increased this week. The supply side of methanol is negatively affected.

In terms of external trading, as of the close on June 8th, the CFR Southeast Asian methanol market closed at $299.00- $301.00 per ton. The closing price of the US Gulf methanol market is 74.00-77.00 cents per gallon; The FOB Rotterdam methanol market closed at 253.00-255.00 euros/ton, up 0.25 euros/ton.

According to future forecasts, supply remains abundant, demand changes are limited, and costs continue to be weak. Business Society Methanol Analysts predict that the domestic methanol market may continue to be weak.

Recent price trends of hydrochloric acid

According to the Commodity Analysis System of Business Society, the domestic hydrochloric acid price has temporarily stabilized this week, with an average market price of 175.00 yuan/ton. Weekend prices fell 45.31% year-on-year. On June 4th, the hydrochloric acid commodity index was 46.05, unchanged from yesterday, a decrease of 66.60% from the cycle’s highest point of 137.89 points (2021-10-26), and an increase of 156.12% from the lowest point of 17.98 points on September 5th, 2012. (Note: The cycle refers to the period from September 1st, 2011 to the present)

Insufficient upstream support, weakened downstream procurement

From the supply side perspective, the domestic hydrochloric acid market prices have temporarily stabilized this week, and manufacturers’ inventory is average.

From the perspective of the upstream and downstream industrial chain of hydrochloric acid, the upstream liquid chlorine market is consolidating at a low level, with average cost support. The downstream market price of polyaluminum chloride slightly decreased, dropping from 1782.50 yuan/ton at the beginning of the week to 1768.75 yuan/ton at the weekend, a decrease of 0.77%. Weekend prices fell by 21.13% year-on-year; The market price of ammonium chloride has stabilized at a low level, with a market price of 627.50 yuan/ton. Over the weekend, the price fell by 58.92% year-on-year. Overall, upstream support is insufficient and downstream demand is weakening.

Future Market Forecast

In mid to late June, the market price of hydrochloric acid may fluctuate and decline in a narrow range. The upstream liquid chlorine market is consolidating at a low level, with insufficient cost support. The downstream polyaluminum chloride and ammonium chloride markets have slightly declined, and downstream purchasing willingness is weak. Analysts from Business Society believe that the recent slight fluctuations in the hydrochloric acid market have been the main trend.

According to the Commodity Market Analysis System of the Business Society, the domestic methanol market fluctuated at a low level. From May 29th to June 2nd (as of 15:00 in the afternoon), the average price of the East China port in the domestic methanol market dropped from 2208 yuan/ton to 2191 yuan/ton. During the cycle, the price fell by 0.75%, with a maximum amplitude of 2.19%, a month on month decrease of 9.56%, and a year-on-year decrease of 22%.

The domestic methanol market is in a weak state, with weakened support for methanol production costs, the recovery of Baofeng units, an increase in domestic supply, and a decrease in local formaldehyde load, resulting in a decrease in methanol demand. As prices decline, traders and downstream sentiment weaken accordingly.

As of the close on June 2nd, methanol futures on the Zhengzhou Commodity Exchange rose. The main methanol futures contract 2309 opened at 2060 yuan/ton, with a maximum price of 2110 yuan/ton and a minimum price of 2018 yuan/ton. It closed at 2089 yuan/ton in the end, an increase of 44 yuan/ton or 2.15% compared to the previous trading day’s settlement. The trading volume was 2461887, the position was 1922656, and the daily increase was 48624.

On the cost side, there is a clear contradiction between supply and demand in the market, and the trading atmosphere is weak. The price of raw coal is mainly weak. The cost of methanol is relatively weak.

On the demand side, downstream dimethyl ether: The demand for dimethyl ether has slightly increased; Downstream MTBE: MTBE demand or increase; Downstream formaldehyde: formaldehyde demand may weaken. The demand for methanol is mixed.

Supply side, device recovery. The overall recovery exceeds the loss, so the capacity utilization rate has increased this week. The supply side of methanol is negatively affected.

In terms of external trading, as of the close on June 1st, the CFR Southeast Asian methanol market closed at $307.00- $309.00 per ton. The closing price of the US Gulf methanol market is 78.00-81.00 cents per gallon; The FOB Rotterdam methanol market closed at 260.00-262.00 euros/ton, down 1 euro/ton.

According to future forecasts, supply remains abundant, demand changes are limited, and costs continue to be weak. Business Society Methanol Analysts predict that the domestic methanol market may continue to be weak.