According to the monitoring of the business community, the domestic asphalt market fell first and then rose in December, which generally rose. From December 1 to 29, the average price of asphalt producers in Shandong Province rose from 3573 yuan/ton to 3691 yuan/ton, up 3.28%, and the price rose 17.28% year on year.

At the beginning of the month, the domestic asphalt market declined significantly, mainly due to the demand side. The weather gradually turned cold, and pavement construction was limited in some areas, so the demand for asphalt was weakened. Specifically, on the macro level, the international crude oil price fluctuated and fell in the same period, causing the spread of negative sentiment throughout the industry chain. Although there are signs of recovery recently, it has little impact on the current asphalt market. In the first ten days of this month, the asphalt price continued to decline, mainly due to the demand side. Affected by weather factors, downstream terminal demand continues to be sluggish. In the middle of this month, the price of asphalt market stopped falling and rising, mainly due to the rebound of crude oil price, the implementation of asphalt winter storage policy, the emergence of bottom price, and the release of some expediting and stock demand, which led to the price rise. In the last ten days of this month, the price of asphalt market continued to rise in a narrow range, mainly due to the rise of crude oil, the strengthening of cost support, and the obvious destocking of some refineries, which led to the tight spot resources, driving the price up.

In terms of cost, on December 29, the benchmark price of WTI crude oil of the business community was $79.53 per barrel, down – 1.27% compared with December 1 ($80.55 per barrel). Since December, oil prices have continued to fall, recording a decline in six trading days. WTI and Brent crude oil both fell by about $10. The results of the OPEC meeting of oil producing countries were released at the beginning of this month, which failed to further reduce production; As well as the EU’s oil price limit policy for Russian seaborne oil has been implemented, but in the short term, it is virtually non-existent. The oil price fell to the annual low against the background of demand depression at the far end. It has completely returned to the level before the Russian Ukrainian conflict. The domestic oil industry chain MTBE product market was affected by the market shock and fell.

In terms of supply, the decrease in supply is mainly due to the reduction of production in some places in North China and the intermittent shutdown of asphalt production by Yunnan Petrochemical in Southwest China.

On the demand side, there is a demand for centralized goods preparation in northwest and south China, while refineries in other regions mainly implement contracts.

It is predicted that the rise of international crude oil will support the sentiment of asphalt market to some extent. Influenced by a new round of cold air factors, the temperature drop in the northern region is obvious, and the demand has slowed down. At present, most of the demand is small purchase and warehousing, while the southern region still has a certain demand for acceleration. The asphalt analysts of the business association predict that the domestic asphalt market may rise in a narrow range in the short term.

Zinc price fell in shock this week

According to the data monitoring of the business community, the zinc price was 23894 yuan/ton as of December 26, down 2.70% from 24556 yuan/ton on December 18. Zinc supply is expected to increase and demand is less than expected. This week, zinc prices fell in shock.

European gas price ceiling is set, and zinc smelting output is expected to increase

All EU countries agreed that the price ceiling of natural gas is set at 180 euros/megawatt hour, which is far lower than the price proposed by the EU last month. Natural gas prices fell, zinc smelting costs fell, zinc smelting output is expected to increase, and European zinc supply is expected to increase.

Demand is less than expected

The domestic prevention and control measures for zinc have changed, but the macroeconomic recovery is less than expected. The output of domestic factories has slowed down, retail sales continue to decline, and the supply and demand of zinc market have not met expectations. The impact of the epidemic has affected some employment. Most enterprises plan to take holidays in advance. The off-season effect may be greater than in previous years, and the downward pressure on zinc prices has increased.

Future market forecast

According to the data analysts of the business association, the cost of zinc smelting in Europe has decreased, the supply of zinc is expected to increase, while the recovery of the domestic market is less than expected, and the demand of zinc is less than expected. In general, the expected increase in zinc supply and demand is less than expected, and the zinc price is expected to fall slightly in the future.

Recent calcium carbide price trend

As can be seen from the above figure, the ex factory price of calcium carbide in northwest China fell slightly this week. This week, the average ex factory price of mainstream calcium carbide manufacturers in northwest China dropped from 3766.67 yuan/ton at the weekend to 3700.00 yuan/ton at the weekend, a drop of 1.77%. A year-on-year decrease of 24.49%. On December 18, the carbide commodity index was 96.94, unchanged from yesterday, down 54.32% from the highest point of 212.23 (2021-10-26) in the cycle, and up 74.70% from the lowest point of 55.49 on March 14, 2016. (Note: Period refers to 2011-09-01 to now)

The upstream support is general, and the downstream demand is good

From the manufacturer’s quotation, the ex factory price of calcium carbide in northwest China fell slightly this week.

The price of the upstream semicarbon market was consolidated at a high level, while the price of the downstream PVC market rose slightly. The price of Shenmulan charcoal this weekend is about 1450-1800 yuan/ton, with average cost support. The PVC market price this week rose from 6025.00 yuan/ton at the beginning of the week to 6116.67 yuan/ton at the end of the week, up 1.52%. A year-on-year drop of 28.38%. The PVC market price rose slightly. Downstream customers’ enthusiasm for calcium carbide procurement increased. Downstream PVC market had a positive impact on calcium carbide price.

Calcium carbide may rise in the market after shocks

In late December, calcium carbide market rose mainly due to narrow fluctuations. The price of raw material semicarbon was consolidated at a high level, with good cost support. The PVC market in the downstream rose in a narrow range, and the demand in the downstream increased. In late December, calcium carbide prices in northwest China may rise in a narrow range.

According to the data monitored by the business community, as of December 19, the average price quoted by domestic premium DMF enterprises was 5500.00 yuan/ton, which was higher than that of the same period last week. The overall DMF market price rose 1.85%, maintaining a strong operation in the short term.

The domestic DMF price trend is relatively strong. At present, the mainstream price range is 5500.00 yuan/ton. The overall DMF market price has risen 1.85%. The operating rate is stable, the readiness of goods is poor, the logistics operation is slow, and the manufacturers give up profits and take orders.

Chemical commodity index: On December 18, the chemical index was 930 points, unchanged from yesterday, 33.57% lower than the cycle’s highest point of 1400 points (2021-10-23), and 55.52% higher than the lowest point of 598 points on April 8, 2020. (Note: the cycle refers to the period from December 1, 2011 to the present)

The DMF analyst of Business Agency believes that the DMF market is expected to run strongly next week.

According to the monitoring of the business community, the PP (wiredrawing) market in 2022 started to rise at 8130 yuan/ton at the beginning of the year, and began to fall at a high level in March. As of December 18, the PP price was 7941.67 yuan/ton, down 2.32% for the whole year, with the overall trend rising first and then declining.

The PP market trend in 2022 is mainly divided into four stages:

The first stage: rapid expansion stage. According to the monitoring of the business community, the price of PP wire drawing material was 8130 yuan/ton on January 1, and reached an annual high of 9360 yuan/ton as of March 9, with a range increase of 15.13%. During the period, the demand for goods preparation before the festival at the beginning of the year was met. Although the downstream enterprises’ work resumption and shipment after the Spring Festival were slowly released due to the impact of health events, the downstream enterprises’ demand for support was solid. In addition, at the end of last year, the coal falling market ended in January and the direct upstream propylene strengthened, so the polypropylene fundamental benefit was superimposed. In addition, the uncertainty of European situation in March is still strong, the market’s expectation of future energy supply interruption is further strengthened, the petrochemical industry chain continues to rise strongly, and the price position of polypropylene is rising rapidly due to various favorable factors.

The second stage: high shock stage. According to the monitoring of the business community, the average price of PP wire drawing material from 9360 yuan/ton on March 9 to 8941 yuan/ton on June 9 was high and volatile, with a range drop of 4.47%. At this stage, the divergence of the international market on the crude oil market caused sharp price fluctuations, the petrochemical industry chain was not smooth, and the direct upstream propylene gradually weakened. The purchase follow-up of PP downstream enterprises slowed down, and buyers were more resistant to high price goods. The merchants have a general mentality, and the offer follows the market. The smoothness of freight transport in some regions is not ideal, and the market gradually returns to the dominant role of fundamental game, but the overall position of PP price in the second quarter is still strong at a high position.

The third stage: off-season falling stage. According to the monitoring of the business community, as of August 22, the price of PP wire drawing material fell to a stage low of 7983.33 yuan/ton, 14.71% lower than 8941 yuan/ton in the first ten days of June. During this period, the trend of crude oil was weak due to the impact of macro inflation such as interest rate increase by the Federal Reserve, propylene fell due to the weakness of downstream industrial chain, and PP cost support weakened. The consumption of terminal enterprises was at the off-season level, the operating rate decreased, and the PP inventory position reached a high level year on year. The petrochemical plant and the traders took orders for the delivery of profits, mainly for stock removal, resulting in a large drop in the price of PP in the three stages.

The fourth stage: shock adjustment stage. According to the monitoring of the business community, the PP (wire drawing) price was 7941.67 yuan/ton as of December 18, down 0.52% from 7983 yuan/ton on August 22. At this stage, the main fulcrum is the traditional peak demand season of “golden nine and silver ten”. Seasonal digestion and inventory operations have boosted the market from September to early October. However, with the end of the stock boom, the price increase gradually gave up. Looking back on the demand in the peak season of this year, its performance was not as good as that of previous years, and the pattern of PP weakening was not improved subsequently. In addition, the product market of major downstream enterprises such as plastic knitting and BOPP was poor, and the spot price of PP had fallen below the 8000 yuan/ton mark by the end of the year.

Overall, the PP market trend in 2022 is mainly affected by the following aspects:

Long term loose expectation of supply due to rapid expansion of industrial capacity

In recent years, China’s polypropylene industry has been in the big cycle of capacity expansion. Since 2018, the domestic average annual capacity growth rate has been 10.27%. Under the background of rapid growth of domestic total capacity, the pressure on the supply side is gradually increasing, and the price level is difficult to rise or fall.

According to the business community, the distribution of time points for the production of new capacity in 2022 is relatively average. In the first half of the year, Zhejiang Petrochemical’s third and fourth line oil made PP plants with a total annual output of 900000 tons were put into production in January and March respectively. The 10 t/a unit of Daqing Haiding was completed in February, and the process of producing PP from propylene was adopted. In addition, Zhenhai Refining and Chemical Phase II, Weifang Comfortable and Tianjin Bohai Chemical all have 300000 t/a units put into production. In the second half of the year, except that Ningbo Daxie (300000 t/a) and Zhongjing Petrochemical Phase II (600000 t/a) were put into production in September, other units are expected to be put into production successively in November and December. As of October, 2.8 million tons of new PP had been put into production, and the total domestic PP production capacity reached 34.87 million tons. If the capacity of six new projects such as Sinochem Hongrun is realized on time, the total new PP capacity will reach 5.4 million tons/year this year. In the long run, the expectation of supply easing will not change, and the pressure on suppliers will increase significantly.

Consumption is restricted by many parties and demand side lags behind

The downstream of polypropylene is mainly concentrated in plastic knitting. In 2022, plastic knitting will account for 32.5% of the overall consumption of polypropylene, and the main application fields are plastic knitting, net rope, fishing net, etc. However, the low technical threshold of the plastic knitting industry and the low profit of the enterprise have restricted the development of the industry. Although the downstream consumption of wire drawing increased by 0.94% this year, its follow-up is relatively lagging in the face of the rapid expansion of polypropylene production capacity.

In addition, various downstream polypropylene industries, including plastic knitting industry, were affected by imported inflation to varying degrees this year, resulting in high cost pressure and low profits, which restricted the orders of enterprises. Due to the decline of the general consumption index of daily necessities and fuel vehicles in 2022, the consumption of polypropylene decreased. Compared with last year’s consumption, low melt copolymerization decreased by 0.51%, homopolymer injection molding decreased by 0.28%, high melt copolymerization decreased by 0.36%, and medium melt copolymerization decreased by 0.01%. It will take some time to tap the demand for polypropylene downstream industry in the domestic market.

The polypropylene market is dragged down by the increased loss of raw propylene industry

According to the monitoring of the business community, as of December 17, the average spot price of domestic propylene was 7608.60 yuan/ton, up 0.79% from 7548 yuan/ton at the beginning of the year. It rose first and then fell, with the decline concentrated in the third quarter. The supply and demand of propylene continued to grow, the demand follow-up was relatively weak, and the price of raw materials remained high, resulting in a continuous decline in the profitability of the industrial chain. During the year, the propylene market was highly competitive, and the industry suffered more losses. The support for PP price gradually weakened throughout the year.

Future market forecast: Polypropylene analysts from the business community believe that the PP industry will expand significantly in 2022. If all new production lines are put into production on time at the end of the year, it will be difficult for the terminal enterprises to follow up the demand for the time being. By then, the staged mismatch of production and marketing will be deepened, and the pressure on the supply side will inevitably have a peak. The current macro inflationary economic environment remains unchanged, and the profits of petrochemical enterprises have shrunk due to its impact. The overall support of the cost side for PP has weakened, and the market returns to the basic guidance of the supply and demand game. To sum up the influencing factors, the current PP industry chain is full of empty space, the mentality of practitioners is not strong, downstream activities tend to be conservative, and the market momentum is general. It is expected that the PP price will fluctuate in a narrow range, mainly for consolidation and operation.

According to the monitoring of the business community, the domestic spandex market has been weak since December. As of December 15, the average market price was 35500 yuan/ton, down 3.27%% from the beginning of the month and 50.83% year on year. Spandex manufacturers adjust their prices appropriately, making small profits but quick turnover.

Current mainstream price statistics of polyurethane fiber market (unit: yuan/ton)

20D./ 30D./ 40D

Zhejiang./36000-42000./34000-38000./32000-35500

Shandong./36000-42000./34000-38000./32000-36000

Fujian./36000-46000./34000-40000./32000-38000

Jiangsu./36000-42000./34000-38000./32000-35500

PTMEG industry started to fall below 70%. The factory mainly keeps the price, the inventory pressure is fair, and the interest giving intention is temporarily limited, of which (1800 molecular weight) is temporarily assessed as 18500-19000 yuan/ton through market negotiation. The pure MDI market is stable, traders are reluctant to sell and bullish, and the market reference is 16200-16500 yuan/ton T/T barreled self lifting.

Downstream customers purchase conservatively. Most of them have the mentality of “buying up but not buying down”. The demand of the terminal market is flat, and the actual transaction receipt is discussed in detail. The order volume of textile enterprises this year is also far lower than that of the same period in previous years, and the demand has not been centralized. At present, the operating rate of circular machine industry is around 40%, and that of warp knitting industry is 60% to 70%.

Analysts from the business community believe that at present, the cost side support is maintained, but the downstream end customers are not very enthusiastic about taking goods, and they are resistant to the high price supply, focusing on just need. It is expected that the spandex market will be mainly stable in the short term.

Price trend

Recently, the domestic POM market has been reorganized and operated, and the overall price performance has fluctuated. According to the data monitoring of the business community, as of December 12, the average ex factory price of domestic POM was 13933.33 yuan/ton, which was the same as that at the beginning of the month.

Cause analysis

In terms of raw materials: the formaldehyde market in Shandong Province is not good recently, as can be seen from the figure below, the recent decline in formaldehyde market is mainly due to the following. As of December 12, the mainstream market price in Shandong was 1280-1380 yuan/ton. Last week, the construction of downstream factories continued to decline, the demand was significantly weakened, the formaldehyde market turnover was light, the inventory was accumulated, and the market was weak and fell.

In terms of supply: Recently, the operating rate of domestic POM enterprises has remained at a high level, and the current industry load is generally higher than before, approaching 95%. Imported materials are also abundant, and the price is lower. In terms of processing profit, the margin of enterprises rose by a narrow margin, with the gross profit level of about 2500 yuan per ton, which is fairly good.

Demand: the load of POM industry rose last week, and the market supply was abundant. The mentality of manufacturers and traders is supported by the firm factory price, but the recent demand is weak, and there is much room for profit in the on-site shipment negotiation. The enthusiasm of terminal enterprises to prepare goods is average, and the demand follow-up is slightly lagging behind.

Future market forecast

In the first ten days of December, the POM market was in a stalemate. The load of domestic polymerization plants is almost full, and the overall supply is abundant. The factory price of domestic materials is deadlocked, the pressure on inventory is fair, and the demand is relatively weak. Downstream enterprises mainly digest inventory, and pick up goods mostly in small pieces. The market supply and demand game is expected to turn POM market into weak operation due to weak demand in the short term.

1、 Price trend

As can be seen from the figure above, the domestic isobutyraldehyde market price fell slightly this week. This week, the average price of domestic isobutyraldehyde mainstream market fell from 6233.33 yuan/ton at the weekend to 6216.67 yuan/ton at the weekend, down 0.27%. A year-on-year decrease of 13.26%. On December 11, the isobutyraldehyde commodity index was 31.56, unchanged from yesterday, down 70.11% from the cycle’s highest point of 105.58 (2021-09-16), and up 4.78% from the lowest point of 30.12 on October 7, 2022. (Note: Period refers to 2021-09-01 to now)

2、 Market analysis

The quotation of mainstream isobutyraldehyde manufacturers fell this week.

From the perspective of upstream and downstream industrial chains, the propylene market of isobutyraldehyde upstream raw material market fell slightly this week, with the price falling from 7710.60 yuan/ton at the end of last week to 7434.60 yuan/ton at the end of this week, a decrease of 3.58%. The upstream raw material market price fell slightly, and the cost support weakened. Affected by the supply and demand side, the price of isobutyraldehyde was negatively affected. From the perspective of the downstream industry chain, the market price of neopentyl glycol was adjusted at a low level, with the price of 8966.67 yuan/ton. The market of neopentyl glycol was consolidated at a low level, and the downstream demand was general, which had a negative impact on isobutyraldehyde.

3、 Future market forecast

The market trend of isobutyraldehyde in mid and late December may rise slightly. The upstream propylene market stopped falling to maintain stability, and cost support increased. The market price of neopentyl glycol in the downstream was adjusted at a low level, and the purchasing enthusiasm in the downstream was general. The isobutyraldehyde analysts from the business community believe that the isobutyraldehyde market may rise slightly due to the impact of supply and demand, raw materials and other aspects in the short-term isobutyraldehyde market.

1、 Price data

According to the data from the bulk list of business cooperatives, the price of petroleum coke of local refiners was weak and volatile this week. On December 11, the average price of Shandong market was 3459.00 yuan/ton, down 0.14% from 3464.00 yuan/ton on December 5.

On December 11, the petroleum coke commodity index was 269.03, unchanged from yesterday, down 34.17% from the highest point 408.70 (2022-05-11) in the cycle, and up 302.20% from the lowest point 66.89 on March 28, 2016. (Note: the cycle refers to the period from September 30, 2012 to now)

2、 Analysis of influencing factors

This week, the price of petroleum coke in refineries rose and fell with each other. The local refining enterprises shipped well. At present, the logistics in many places across the country has been restored, and the petroleum coke market is in sufficient supply. Downstream companies have begun to stock up on demand.

Upstream: The international crude oil price fell sharply, and the international crude oil price fell to the lowest level within the year. Because some economic data in the United States exceeded expectations, the possibility of the Federal Reserve’s radical interest rate increase still exists, which suppressed the benefits of OPEC+production reduction and Western sanctions against Russia. The unexpected growth of the US ISM non manufacturing index in November, released on Monday, reflects that the domestic economy is still resilient. The continued economic boom has triggered market concerns about the Federal Reserve’s transition from “dove” to “eagle”, which may disappoint the Federal Reserve’s previous desire to slow down interest rate hikes. The market provided the basis for the Federal Reserve to curb inflation and maintain the monetary tightening path, which affected the crude oil market to decline significantly. The overall global economy is weak, the prospect of energy demand is still not optimistic, and the economic weakness depresses oil prices.

Downstream: the price of calcined coke was basically stable this week; The price of metal silicon market declines; The downstream electrolytic aluminum price fluctuated and fell. As of December 11, the price was 19270.00 yuan/ton; At present, downstream carbon enterprises are under great financial pressure, mainly purchasing on demand.

The oil coke analysts of the business agency believe that: the international crude oil has dropped sharply this week, and the cost support of oil coke is limited; At present, the logistics in many places across the country has been restored, and the downstream enterprises are highly motivated to stock up. However, the petroleum coke market is currently in sufficient supply, and the downstream has an obvious intention to depress the price. It is expected that the price of locally refined petroleum coke will be mainly adjusted in the near future.

This week (12.5-12.9), the overall domestic dimethyl ether market declined slightly, and the price in Henan was temporarily stable. According to the data monitoring of the business community, the average price of dimethyl ether in Henan market was 4620 yuan/ton on December 5, and 4620 yuan/ton on December 9. There was no rise or fall in the week, up 17.33% compared with the same period last year.

As of December 9, the market prices of dimethyl ether in various regions in China are as follows:

Regional/mainstream quotation

Jiangxi region./4570 yuan/ton

Hebei region./4500 yuan/ton

Henan Province./4250-4620 yuan/ton

This week, the overall transaction focus of the domestic dimethyl ether market moved downward. Although the market inventory position, the downstream demand followed slowly. At the same time, the crude oil price fell several times to a new low in the year, which depressed the mentality of the industry. Upstream shipment was the first, and the focus of individual enterprises’ negotiations was lowered. The market in Henan is relatively strong, the offer of enterprises is stable, and the actual transaction price is loose.

The main reason for the weak market of raw material methanol is supply and demand. The operating rate of the production enterprises has increased, while the source of imported goods continues to arrive at the port, and the supply is abundant. However, the existing demand has not been significantly boosted. Liquefied gas, a related product, rebounded after falling, but the crude oil continued to fall in the future market, resulting in insufficient upward momentum. The market stopped rising and stabilized, increasing resistance to continue rising.

In general, the dimethyl ether market is weak as a whole. Although the supply side remains stable, the cost side and demand side drag significantly. It is expected that the methyl ether market will remain weak next Tuesday.