Price trend in 2023:

According to the Commodity Market Analysis System of Shengyishe, the average price of domestic melamine enterprises was 8233.33 yuan/ton on January 1, 2023. As of December 31, the average price of domestic melamine enterprises was 7475 yuan/ton, with a decrease of 9.21% in the year’s market.

In 2023, the melamine market first fell and then rose, with an overall downward trend.

In the first half of the year, there was strong cost support in January, with a large number of melamine maintenance devices and decent performance in the export market. However, domestic demand remained average before and after the Spring Festival, and the market remained stable and observed consolidation. In February, the melamine market fluctuated narrowly and rose, with raw material urea showing a “v” – shaped trend, which had a certain impact on the melamine market trend. Maintenance equipment gradually resumed, and downstream demand fell short of expectations. From March to June, the price of raw material urea fluctuated and fell, with weakened cost support and sufficient market supply. However, downstream demand was poor, and rigid demand followed suit. The melamine market continued to decline.

In the second half of the year, from July to August, the price of raw material urea increased, cost support increased, industry capacity utilization decreased, and spot supply was tight, supporting the rise of melamine prices. Downstream demand mainly followed suit. In mid to late September, downstream demand was weak, and new orders in the market were not well executed. Some enterprises resumed production, increased supply, and the mentality of operators was insufficient. Holders lowered prices to attract orders. In October, the market price of melamine remained stable with minor fluctuations, and holders followed the market to ship. In November, enterprise quotations first rose and then fell, with average cost support in the middle and late stages. The utilization rate of melamine production capacity was high, and domestic downstream demand was weak. The cost support in December is still acceptable, with a large number of parking devices, concentrated downstream hoarding, active entry into the market for purchasing, and strong price operation.

Market forecast for 2024:

Supply side:

In recent years, the production capacity growth rate of China’s melamine industry has slowed down compared to the previous period, with a slight increase in industry production capacity in 2023. The melamine market is sluggish in 2023, with limited profits and reduced production enthusiasm. Overall production in 2023 has slightly decreased compared to 2022, and it is expected that the melamine industry will continue to operate at a low level in 2024.

Demand side: Melamine has a wide demand side and is mainly used for boards, melamine powder, and impregnated paper. It can also be used in the production of coatings, resins, and flame retardant materials. It can also be used as anti folding and anti shrinkage treatment agents for textiles, synthetic fireproof layer bonding, fixing or hardening agents for waterproofing agents, etc. It is expected that downstream demand will remain relatively stable in 2024, with a focus on continuing to buy in demand.

Import and export: According to customs data, the total import volume of melamine in China in 2023 was 265928 kilograms, a year-on-year decrease of 29.34%. In 2023, the total export volume of melamine in China was 476452855 kilograms, a year-on-year decrease of 10.78%.

Cost side: Raw material urea: According to the commodity analysis system of Business Society, the mainstream market price of urea in Shandong Province has shown an overall downward trend in 2023. The starting price was 2698.00 yuan/ton, and the ending price was 2485.00 yuan/ton, with a year-on-year decline of 7.89%.

From the above figure, it can be seen that the price trend of melamine in 2023 is roughly similar to the trend of raw material urea. It is expected that the price changes in the melamine industry will still be greatly affected by the upstream urea industry in 2024.

Comprehensive prediction:

In summary, the changes in the supply and demand pattern of the melamine industry in 2024 may be relatively limited. It is expected that the melamine market will follow the trend of raw material urea prices in 2024, and more attention still needs to be paid to export demand, related policies, and other factors.

Introduction: Cyclohexanone is an important intermediate in organic synthesis. The greatest use of cyclohexanone is in the production of caprolactam and adipic acid, which are important monomers in the production of nylon, nylon 66, and other synthetic resins. In the downstream distribution of cyclohexanone, the chemical fiber industry accounts for over 90% of the total production.

Firstly, let’s review the trend of the cyclohexanone market in 2023. The domestic cyclohexanone market experienced severe fluctuations in 2023, with an overall “M” shaped price curve. The average price at the beginning of the year was 9210 yuan/ton, and the average price at the end of the year was 9450 yuan/ton, with a year-on-year increase of 2.61%. From the price trend chart of cyclohexanone, it can be seen that the highest point of cyclohexanone price in 2023 occurred in September, with a highest price of 10321 yuan/ton. The lowest point of cyclohexanone price occurred in early June, with a lowest price of 7994 yuan/ton and a maximum amplitude of 29.11%.

In the cost composition of the traditional cyclohexanone process route, pure benzene accounts for 53%, and the market trend of pure benzene directly affects the price trend of cyclohexanone. The cyclohexanone plant is mainly equipped with downstream production of caprolactam, which is one of the main downstream sources of cyclohexanone. The market trend of caprolactam also has a significant impact on the market trend of cyclohexanone. From the comparison chart of the price trends of pure benzene cyclohexanone and cyclohexanone caprolactam in Business Society, it can be seen that the market trend of cyclohexanone in 2023 is roughly the same as that of pure benzene and caprolactam.

There were two significant fluctuations in the cyclohexanone market in 2023. The first was a significant decline that began in mid May, with a decline of 15.18%. The main reason is the weak decline of raw material pure benzene, lack of cost support, increased supply of market goods, intensified industry competition, and weak downstream demand, strong resistance to high prices. Manufacturers are offering discounts to sell, resulting in a decline in transactions. Another time was a significant rebound from early July to mid September, with an increase of 27.95%. The main reason is that the market price of raw material pure benzene continues to rise, with strong cost support. The supply of cyclohexanone products is relatively low. Driven by costs, manufacturers are reluctant to sell at low prices and actively explore price increases. As prices rise downstream, the prices of the entire industry chain products have increased to varying degrees. From this, it can be seen that the market trend of pure benzene is influenced by the cyclohexanone market. In 2024, it is necessary to closely monitor the price trends of pure benzene and caprolactam.

In terms of imports and exports, according to customs data statistics, the overall export volume of cyclohexanone from China showed an increasing trend from 2018 to 2023. The increase in cyclohexanone exports in recent years is mainly due to the continuous increase in domestic cyclohexanone production capacity supply, and the supply growth rate is significantly faster than the demand growth rate. On the other hand, in the context of a shift in supply and demand patterns, the domestic price of cyclohexanone has led to a reduction in industry profits and a relative advantage in price. Therefore, the overall trend of cyclohexanone exports is increasing. Affected by weak global demand in 2023, overseas facilities are mostly supporting and production is stable. The downstream solvent market demand is average, and the export of cyclohexanone has decreased to a certain extent. In 2024, it is still necessary to pay more attention to the supply situation of domestic and foreign enterprises.

According to the commodity market analysis system of Business Society, the domestic production capacity of cyclohexanone is about 7.14 million tons, and the overall operating load of the industry is currently around 60%, which is at a relatively low level. The main production enterprises have limited product supply due to equipment maintenance. In 2024, domestic cyclohexanone production still needs to pay more attention to industry operating rate information.

In the future, the main influencing factors on the price of cyclohexanone are upstream and downstream products and industry operations. In 2024, it is necessary to pay more attention to the traditional peak season of “Golden Three Silver Four” and “Golden Nine Silver Ten”, as well as the trend of raw material pure benzene under the influence of crude oil market.

Recent price trends of tetrahydrofuran

Recently, there has been an increase in maintenance of 1,4-butanediol units, limited spot production, an upward shift in market focus, increased cost support, and a slight increase in domestic tetrahydrofuran market prices. According to the Commodity Analysis System of Business Society, the average price of tetrahydrofuran in the mainstream domestic market increased from 13125 yuan/ton at the beginning of the week to 13150 yuan/ton at the end of the week, an increase of 0.19%, and the weekend price increased by 2.41% year-on-year.

From the supply side perspective, the prices of mainstream domestic tetrahydrofuran distributors have slightly increased this week, with average inventory and strong reluctance from traders to sell.

From the perspective of upstream raw materials, the market for 1,4-butanediol has slightly increased this week, with prices rising from 9542.86 yuan/ton at the beginning of the week to 9550 yuan/ton at the end of the week, an increase of 0.07%, and a year-on-year decrease of 15.41% in weekend prices. Recently, there has been an increase in the maintenance of 1,4-butanediol units, with limited spot production by enterprises. The intention of suppliers to maintain prices has continued, and the market focus has shifted upwards, leading to increased cost support and a positive impact on the price of tetrahydrofuran.

From the perspective of downstream demand, the spandex market prices have stabilized at a low level this week. The price of spandex is 31500 yuan/ton, with a year-on-year decrease of 10.32% over the weekend. The quotation from the spandex factory has been weakly adjusted, and the manufacturer’s shipment is average. They are cautious about raw material procurement, and are currently waiting and waiting for the Spring Festival stocking.

In the future, in late January, the domestic tetrahydrofuran market may experience a slight fluctuation and decline. Although the upstream 1,4-butanediol market has slightly increased, the support is limited. The downstream spandex market is consolidating at a low level, with a cautious attitude towards raw material procurement and a strong wait-and-see atmosphere. Business Society’s tetrahydrofuran analyst believes that in the short term, the domestic tetrahydrofuran market may experience slight fluctuations and declines due to various factors such as supply and demand and raw materials.

441 # Overview of Silicon Price Trends

This week, the price of metal silicon # 441 slightly declined. As of January 19th, the average price of domestic metal silicon market was 15390 yuan/ton, a decrease of 1.09% compared to the previous week. With the increase of silicon metal production reduction, silicon factories have started to resume production and supply has resumed. At the same time, as the holiday approaches, downstream short-term essential procurement has been basically completed, and the market spot sentiment has cooled down. As a result, market transactions have weakened, leading to a weakening of spot prices.

The price of 441 # silicon in various regions on the 19th is as follows:

The price range of # 441 metallic silicon in the Huangpu Port area is 15500~15600 yuan/ton, with an average price of 15550 yuan/ton; The price range of # 441 metallic silicon in Tianjin Port area is 15500~15600 yuan/ton, with an average of 15550 yuan/ton; The price range of # 441 metallic silicon in Kunming area is 15200-15400 yuan/ton, with an average price of 15300 yuan/ton; The price range of # 441 metallic silicon in Sichuan region is 15200~15300 yuan/ton, with an average of 15250 yuan/ton; The price range of Shanghai # 441 metallic silicon is 16100~16200 yuan/ton, with an average price of 16150 yuan/ton.

The Factors Influencing the Price of Silicon Metal

In terms of supply:

As of January 19th, the number of furnaces opened this week was 301, an increase of 3 compared to last week. Among them, Yunnan and Fujian each increased by 2 units, Guizhou and Sichuan each decreased by 1 unit, Yunnan and Hunan each decreased by 2 units, and Chongqing increased by 1 unit. Recently, some silicon factories on the supply side have started resuming production, and some silicon factories in Chongqing and Yunnan have started production to deliver orders. However, according to the data as of the 11th, the number of weekly furnaces has increased.

In terms of inventory:

As of January 19th, the national social inventory of industrial silicon reached 351000 tons, a decrease of 3000 tons compared to the previous week. Among them, the social ordinary warehouse was 114000 tons, a decrease of 2000 tons compared to the previous week, and the social delivery warehouse was 237000 tons (including unregistered warehouse receipts), a decrease of 1000 tons compared to the previous week.

In terms of demand:

This week, the domestic polycrystalline silicon market continued to stabilize, and the mainstream range of single crystal dense materials with a current model of first-class solar energy has slipped to 52000 to 58000 yuan/ton. Due to seasonal reasons, downstream installed demand has decreased, and the recent increase in demand in the silicon material market has been insufficient. We need to continue to follow up, but the current price decline space is gradually narrowing, and it may stabilize in the later stage, but we have not seen any signs of rebound.

The prices of organic silicon and aluminum alloy have slightly increased. The domestic organic silicon DMC market price is referenced around 13940 yuan/ton, and the current quotation for aluminum alloy ADC12 is 20150 yuan/ton. The aluminum alloy market is stable, with aluminum alloy factories making small-scale purchases and placing appropriate inquiries for replenishment, resulting in an overall increase in demand.

Future Market Forecast

In summary, on the supply side, with some silicon factories resuming production, the spot sentiment in the market has cooled down. In addition, the disturbance in the north has not been eliminated due to the approaching holiday, and the cost pressure in the southwest region is low. The overall operating rate is still at a low level; On the demand side, downstream replenishment is basically coming to an end, and downstream procurement is mainly based on demand. Market transactions have weakened, and demand release is weak, but resilience still exists. The social inventory has slightly decreased, and the overall inventory pressure has been alleviated. At present, cost support is temporarily in place, and it is expected that industrial silicon will continue to operate in a weak and volatile manner next week. We will continue to monitor supply side disturbances and downstream replenishment progress before the Spring Festival.

Product Name: PVC

Latest price: 5554 yuan/ton

Analysis points: On January 17th, the PVC spot market prices fluctuated. Manufacturers mainly maintain stable prices, with a moderate trading atmosphere on the market. Dealers are more flexible in pricing, and market transactions are cautious. At present, the quotation for PVC SG5 is mostly around 5280-5700 yuan/ton. Downstream players are more cautious, and market transactions are relatively light.

It is expected that the PVC spot market will consolidate and operate within the short term.

Recent price trends of tetrahydrofuran

According to the Commodity Analysis System of Business Society, the price of tetrahydrofuran in the domestic market has slightly increased this week. This week, the average price of tetrahydrofuran in the mainstream domestic market increased from 12925 yuan/ton at the beginning of the week to 13075 yuan/ton over the weekend, an increase of 1.16%, and the weekend price increased by 1.83% year-on-year.

Upstream support is average, downstream demand weakens

From the supply side perspective, mainstream domestic tetrahydrofuran distributors have seen a slight increase in quotes this week, with average inventory levels.

From the upstream raw material market of tetrahydrofuran, the 1,4-butanediol market saw a slight increase this week, with prices rising from 9514.29 yuan/ton at the beginning of the week to 9535.71 yuan/ton at the end of the week, an increase of 0.23%, and a year-on-year decrease of 12.76% over the weekend. This week, the market for maleic anhydride experienced a significant decline, with prices dropping from 7740 yuan/ton at the beginning of the week to 7300 yuan/ton over the weekend, a decrease of 5.68%, and a year-on-year increase of 5.42% over the weekend. Overall, the upstream raw material market prices fluctuate, with average cost support. However, due to the impact of supply and demand, it has a negative impact on the price of tetrahydrofuran.

From the downstream market of tetrahydrofuran, the price of spandex in the market has stabilized at a low level this week. The price of spandex is 32000 yuan/ton, with a year-on-year decrease of 8.90% over the weekend. The downstream spandex market prices are consolidating at a low level, and downstream customers are generally enthusiastic about purchasing tetrahydrofuran.

Future prospects

In mid to late January, the domestic tetrahydrofuran market may experience a slight fluctuation and decline. The upstream maleic anhydride market has slightly declined, with insufficient cost support. The downstream spandex market is consolidating at a low level, and downstream demand is weakening. Business Society’s tetrahydrofuran analyst believes that in the short term, the domestic tetrahydrofuran market may experience slight fluctuations and declines due to various factors such as supply and demand and raw materials.

1、 Overview of Yellow Phosphorus Industry

Yellow phosphorus, also known as white phosphorus. White or light yellow semi transparent solid. Yellow phosphorus is located in the middle of the entire phosphorus chemical industry chain, and the downstream demand distribution of yellow phosphorus is mainly concentrated in the two major fields of phosphoric acid (43%) and phosphorus trichloride (37%), and it is also widely used in specific applications. The main uses of yellow phosphorus in other aspects are the production of sodium hypophosphate, phosphorus pentoxide, red phosphorus, hexametaphosphate, phosphorus pentoxide, etc. Its consumption accounts for about 15% of the total consumption of yellow phosphorus.

2、 Market analysis

According to monitoring of commodity data, the yellow phosphorus market in 2023 is mainly divided into three stages of decline, rise, and fall, with overall prices falling. At the beginning of the year (January 1st), the average price of yellow phosphorus was 33125 yuan/ton, and at the end of the year (December 31st), the average price was 22962.67 yuan/ton. The price has decreased by 30.68% during the year. The highest point of the year occurred on January 4th at 33250 yuan, and the lowest point occurred on May 11th at 20000 yuan. The first stage is the downward phase from January to mid May. The second stage is the upward phase from mid May to mid November. The third stage is the downward phase from mid November to the end of December.

The market price of yellow phosphorus mainly declined from January to March in the first quarter. Before and after the Spring Festival holiday in January, the market was relatively quiet. The news of power rationing in Yunnan in late February has improved the overall market trading situation. In March, the supply of yellow phosphorus in the market increased significantly, making it difficult for high-end prices to be traded and leading to a decrease in market prices. The average price on January 1st was 33125 yuan/ton, and on March 31st it was 30300 yuan/ton. The cumulative decline from January to March was 8.53%.

In the second quarter, from April to June, the price of yellow phosphorus first fell and then rose, with the overall decline being the main trend. The domestic yellow phosphorus market continued to be weak in April, with limited new orders and a significant drop in yellow phosphorus market prices. In May, the market price of yellow phosphorus first fell and then rose. Many yellow phosphorus producing enterprises reduced their production load, some enterprises stopped production, delayed driving time, and later increased prices, causing prices to hit the bottom and rebound. In June, the price of yellow phosphorus in the market first rose and then fell, and there was not much inventory on the market. They were reluctant to sell at low prices, and the overall market situation rose. The average price on April 1st was 30300 yuan/ton, and on June 30th it was 22900 yuan/ton. The cumulative decline from April to June was 24.42%.

In the third quarter, from July to September, the price of yellow phosphorus first rose and then fell, with an overall increase being the main trend. The construction of the 7-8 market is still at a low level, and it is difficult to find low-priced goods on the market. The atmosphere of new order negotiations is strong, and prices are rising. In late September, downstream stocking and procurement were basically completed, and on-site distributors sold at low prices. The focus of new transaction prices gradually declined. The average price on July 1st was 22900 yuan/ton, and on September 30th it was 25522.67 yuan/ton, with a cumulative increase of 11.45% from July to September.

In the fourth quarter, from October to December, the price of yellow phosphorus first rose and then fell, with an overall decline being the main trend. In October, the price of upstream phosphate ore increased, and there were many inquiries from downstream, making it difficult to purchase at a lower price. Manufacturers increased their prices. Affected by the power rationing policy in Yunnan region in November, companies showed strong reluctance to sell and their prices were raised. The market trading situation in December was light, with poor demand and downstream procurement at lower prices, resulting in a downward market focus. The average price on November 1st was 25522.67 yuan/ton, and on December 31st it was 22962.67/ton. The cumulative decline from October to December was 10.03%.

Yellow phosphorus production capacity

The production capacity of yellow phosphorus in China is distributed in provinces with relatively concentrated phosphate ore and hydropower resources, mainly in the four provinces of Hubei, Sichuan, Guizhou, and Yunnan. In 2022, the total production capacity of yellow phosphorus reached 1.4485 million tons, an increase of 2.73% year-on-year. According to incomplete statistics from relevant institutions, the domestic yellow phosphorus production capacity has slightly increased. As of the end of December 2023, the scale of yellow phosphorus production capacity has increased to 1.459 million tons/year. There is not much difference compared to 2022. In terms of production, May 2023 had the lowest output, with a monthly output of around 35000 tons. The highest production was in October, with a monthly output of around 74500 tons. The comprehensive estimated production in 2023 is around 660000 tons.

Yellow phosphorus import and export volume

According to customs statistics, the cumulative export volume of yellow phosphorus from January to November 2023 was 57600 kilograms, with an export amount of 385920 US dollars. From January to December 2023, China imported a total of 0 tons of yellow phosphorus. Considering tariffs and transportation costs, large-scale import and export of yellow phosphorus is still not feasible. It is expected that in recent years, China’s yellow phosphorus will still be mainly produced and sold domestically, with relatively small import and export volumes.

In terms of upstream raw materials

According to data monitoring by Business Society, as of December 31, 2023, the reference average price of 30% grade phosphate ore in China was around 1034 yuan/ton. Compared with January 1, 2023 (reference price of 1056 yuan/ton), the price decreased by 22 yuan/ton, a decrease of 2.08%. In 2023, the overall market situation of domestic phosphate ore showed a slight decline ending in a mixed trend of ups and downs.

In 2022, China’s phosphorus ore production reached 104.745 million tons, a year-on-year increase of 1.8%. From January to November 2023, the overall production of phosphate ore was 94.05 million tons, and the cumulative production of major phosphate ore producing areas for the year decreased by 3 million tons compared to 2022.

In terms of upstream fuel

According to the Commodity Market Analysis System of Business Society, on January 1, 2023, the ex factory price of quasi first grade metallurgical coke was 2682 yuan/ton, and on December 31, the ex factory price of quasi first grade metallurgical coke was 2430 yuan/ton. The price has dropped by 9.4% this year. In 2023, the coke market first rose and then fell, with an overall downward trend.

According to the National Bureau of Statistics, from January to November 2023, the national coke production reached 450 million tons, an increase of 3.27% year-on-year. The overall production of coke has maintained a slight increase, with an estimated coke production of 490 million tons in 2023.

In terms of domestic demand

In terms of phosphorus trichloride, China is one of the world’s largest producers and consumers of phosphorus trichloride. It is expected that the production of phosphorus trichloride in China will increase to 1.9759 million tons in 2023, and the demand is expected to increase to 1.9653 million tons.

According to the commodity market analysis system of Shengyishe, as of January 1, 2023, the average price of phosphoric acid was 9025 yuan/ton, and as of December 31, the average price was 6340 yuan/ton. The price has dropped by 29.75% this year. In 2023, phosphoric acid showed an overall downward trend.

3、 Future Market Forecast

At the macro level, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Natural Resources, the Ministry of Ecological Environment, the Ministry of Agriculture and Rural Affairs, the Ministry of Emergency Management, the Chinese Academy of Sciences and other eight departments jointly issued the Implementation Plan for Promoting the Efficient and High value Utilization of Phosphorus Resources recently. The plan proposes that by 2026, China’s sustainable guarantee capacity for phosphorus resources will be significantly enhanced, the independent innovation ability and green safety level of phosphorus chemical industry will steadily improve, the supply capacity of high-end phosphorus chemicals will be significantly improved, the complementary regional advantages and linkage development ability will continue to strengthen, and the resilience and safety level of the industrial chain supply chain will be more stable. And specific development goals have been clarified from four aspects: innovation driven, structural optimization, green development, and ecological cultivation.

Upstream aspect: The slight decline in phosphate ore prices generally supports the cost of yellow phosphorus. The price decline in the coke market has limited support for yellow phosphorus. Overall, the cost support is not significant.

On the supply side, there is currently a slight increase in domestic yellow phosphorus production capacity, which is not much different from 2022. At present, there are plans for new projects in Yunnan, Sichuan, and Guizhou regions, but the actual implementation situation still needs to be evaluated based on the current situation. In the situation where the supply-demand contradiction in the yellow phosphorus market still exists in 2024, the actual plan for the production of new production capacity may be delayed.

In terms of import and export: According to customs statistics, the cumulative export volume of yellow phosphorus from January to November 2023 was 57600 kilograms. From January to November, a total of 0 tons of yellow phosphorus were imported. Considering tariffs and transportation costs, large-scale import and export of yellow phosphorus is still not feasible. It is expected that in recent years, China’s yellow phosphorus will still be mainly produced and sold domestically, with relatively small import and export volumes.

In terms of demand: With the continuous development of the economy, the scale of downstream industries such as phosphate fertilizers and lithium batteries continues to expand. In recent years, the demand for yellow phosphorus in China has continued to grow, and the industry has a broad consumer market. The downstream phosphorus trichloride has a promising prospect and has played a certain supporting role in the demand for yellow phosphorus.

In summary, in the year 2023, the supply-demand contradiction in the yellow phosphorus market led to an overall decline in market prices. In 2024, opportunities and challenges coexist in the yellow phosphorus market. Overall, the future will maintain stable development. Domestic yellow phosphorus production enterprises need to increase investment in environmental protection, improve production processes, reduce energy consumption and pollution emissions, and promote the industry’s development towards green and sustainable direction.

Recently (1.8-1.14), the market for butadiene rubber has slightly declined. According to the Commodity Market Analysis System of Business Society, as of January 14th, the market price of butadiene rubber in East China was 12240 yuan/ton, a decrease of 0.81% from last Friday’s 12340 yuan/ton.

The price of raw material butadiene has narrowed and stabilized, with the main focus on the cost of butadiene rubber remaining stable. Downstream tire factories have started to recover, and there is a strong demand support for butadiene rubber; Multiple devices have been shut down and reduced in load. Recently, the supply of butadiene rubber has been tight, providing strong support for butadiene rubber. However, some plans have been restarted in the near future, and the supply of butadiene rubber is expected to rebound. The bearish atmosphere in the market has increased, and the factory prices of enterprises have slightly decreased. As of January 14th, PetroChina Northeast Sales Company’s Daqing Shunding Northeast Warehouse has raised prices by 12300 yuan/ton, while the mainstream price of Shunding rubber in the East China region is reported at 12000~12500 yuan/ton; Private polybutadiene rubber costs 11800-11900 yuan/ton.

Some of the early parking and maintenance devices have plans to restart in the near future, and the supply of butadiene rubber is expected to rebound.

Recently (1.8-1.14), the price of butadiene has narrowed, and the cost center of butadiene rubber has remained stable. According to the commodity market analysis system of Shengyishe, as of January 14th, the price of butadiene was 8753 yuan/ton, which was unchanged from Monday’s price and fell to 8687 yuan/ton within the week.

Recently (1.8-1.14), the natural rubber market has slightly increased, which has had a slightly positive impact on butadiene rubber. According to the Commodity Market Analysis System of Business Society, as of January 14th, the price was 12810 yuan/ton, an increase of 1.10% from Monday’s 12670 yuan/ton, and the highest point in the cycle was 13180 yuan/ton.

Demand side: After the holiday, downstream tire companies have partially restarted their maintenance equipment, resulting in an increase in tire production and a slight rebound in demand for rubber. It is understood that as of mid January 2023, the operating load of all steel tires in rubber tire enterprises in Shandong region is around 560%; The operating load of semi steel tires in domestic rubber tire enterprises is around 7.2%.

Market forecast: Business Society analysts believe that raw material prices will continue to narrow down, and the cost of butadiene rubber will remain stable. In the near future, the plan to restart parking facilities will restart, and the supply of butadiene rubber is expected to return to loose. Downstream tire production will slightly increase, but stocking is still cautious. Overall, the spot market of butadiene rubber will remain stable and weak in the short term.

According to monitoring data from Business Society, as of January 11, 2024, the factory price reference for domestically produced industrial grade dimethyl carbonate is 4000 yuan/ton. Compared with January 7 (reference price for dimethyl carbonate is 4033 yuan/ton), the price has decreased by 33 yuan/ton, a decrease of 0.83%; Compared with January 1st (reference price of dimethyl carbonate at 4066 yuan/ton), the price has been reduced by 66 yuan/ton, a decrease of 1.64%.

From the monitoring chart of Business Society data, it can be seen that this week (1.7-1.11), the overall domestic dimethyl carbonate market showed a weak downward trend. During the week, with the increase in supply of dimethyl carbonate on-site, the pressure on the supply side of dimethyl carbonate increased. Under the pressure of supply, some dimethyl carbonate factories narrowly reduced the shipment price of dimethyl carbonate by about 100 yuan/ton. As of January 11th, the domestic market price of dimethyl carbonate is referenced to be around 3700-4100 yuan/ton, while the high price is referenced to be 4300 yuan/ton.

Analysis of future market trends

At present, the downstream demand side of dimethyl carbonate is generally weak, and the transmission of supply and demand is relatively slow. The trading atmosphere of dimethyl carbonate on the market is light, and the mentality of the industry is average. The dimethyl carbonate data analyst of Business Society believes that in the short term, the domestic dimethyl carbonate market will mainly adjust and operate in a narrow range, and the specific trend still needs to pay more attention to the changes in news on the supply and demand side.

According to monitoring data from Business Society, as of December 31, 2023, the reference market price for domestically produced industrial grade propylene glycol was 8300 yuan/ton. Compared with January 1 (reference price for propylene glycol was 7400 yuan/ton), the price increased by 900 yuan/ton, an increase of 12.16%. The overall market situation of propylene glycol in China in 2023 showed a wide range of fluctuations. Throughout the year, the lowest point of the price reference was 7133 yuan/ton, with a maximum decline of 26.90%.

What will be the market situation for propylene glycol in 2024?

Firstly, let’s review the market trends of propylene glycol over the past three years. From the comparison chart of market data from Business Society, it is clear that in 2023, the domestic propylene glycol market has shown a significant decline compared to the market in 2021. In 2021, the price of propylene glycol in the market was almost always above 15000 yuan/ton, and the propylene glycol market was also at a high level in the first half of 2022. In the second half of 2022, The propylene glycol market is gradually falling to a low level. Therefore, in 2023, the propylene glycol market started at a low level. Although there was a significant fluctuation throughout the year, the market still failed to break through the 10000 yuan mark, with a tight increase of 12.56% throughout the year.

In terms of production capacity: In 2023, the overall production capacity of propylene glycol units in China has been improved. In June 2023, Shandong Depu New Materials Company successfully completed the production of 69000 tons/year of dimethyl carbonate and 55000 tons/year of propylene glycol units. The production capacity of propylene glycol units in the East China region has increased to 78% in the country. As of the end of 2023, the production capacity of domestic propylene glycol units is based on 1.08 million tons per year. The increase in propylene glycol production capacity is a double-edged sword. On the one hand, in the past two years, the overcapacity of propylene glycol in China has become apparent, and the increase in production capacity will bring certain supply pressure to enterprises. On the other hand, the improvement of propylene glycol production capacity is more conducive to the comprehensive development of the propylene glycol upstream and downstream industry chain, and the overall improvement of propylene glycol production capacity is also more conducive to the profit and loss control of the propylene glycol upstream and downstream industry chain.

In terms of supply: At present, China’s propylene glycol production is mainly based on the propylene glycol/dimethyl carbonate co production process and the epoxypropane hydration method. Among them, the PO ester exchange method of the dimethyl carbonate/propylene glycol co production process has a certain production cost advantage compared to the epoxypropane hydration method, and the main production enterprises are concentrated in provinces such as Shandong, Anhui, and Guangdong. By the end of 2023, the PO ester exchange method accounted for 80%, a slight increase compared to last year. In 2023, with the increase in domestic epoxy propane production capacity, the overall production of its by-product propylene glycol has also increased. Therefore, in 2024, it is expected that there will be significant supply side competition in the propylene glycol market, and the supply pressure on factories will also increase accordingly.

Export: China is one of the world’s major propylene glycol exporters. The top three countries and regions for China’s export are Türkiye, the United Arab Emirates and Indonesia. Announcement No. 15 of 2020 issued by the Ministry of Finance and the State Administration of Taxation will be implemented from March 20, 2020, increasing the export tax rebate rate for some products, with the export tax rebate rate for propylene glycol increasing to 13%, which is a favorable policy for propylene glycol exports. From January to November 2023, the export volume of propylene glycol reached 188400 tons, a year-on-year increase of 9.45%. From 2021 to 2023, the proportion of propylene glycol exports has been increasing year by year. It is expected that the export of propylene glycol will continue to show a growth trend in 2024.

In terms of demand: In 2023, the overall demand performance of the propylene glycol market is average, with insufficient support from the main downstream consumer sectors of propylene glycol, and a low operating rate in the downstream unsaturated resin industry. The proportion of downstream UPR, the main force of propylene glycol, in the industry has also decreased in 2023. Due to weak demand in terminal fiberglass, real estate and other fields, the overall capacity utilization rate of the UPR industry is low. In 2024, with the continuous recovery of the downstream terminal market and the production of new devices in the downstream propylene glycol elastomer polyether market, the market demand for waterproof coatings, adhesives and other fields in the terminal application market will be boosted. Therefore, it is expected that the overall downstream demand in the propylene glycol market will increase in 2024.

In summary, the propylene glycol data analyst from Business Society believes that the domestic propylene glycol market in 2024 will be a year of both opportunities and challenges. In terms of market challenges, the pressure on the propylene glycol supply side is still present, and downstream demand is also concerned. For market opportunities, the deployment of new raw material production capacity for propylene glycol and the production of new equipment for propylene glycol itself will bring new supply-demand distribution to the market. The demand side also has expectations, combined with the positive effects of exports on the market. It is expected that in 2024, the domestic propylene glycol market will mostly warm up and grow step by step.