1、 Price trend

According to the Commodity Analysis System of Business Society, the domestic market price of imported potassium chloride slightly decreased in February. The price of potassium chloride dropped from around 2800.00 yuan/ton at the beginning of the month to 2675 yuan/ton at the end of the month, a decrease of 4.46% and a year-on-year decrease of 30.82%. On February 28th, the potassium chloride (imported) commodity index was 85.71, unchanged from yesterday, a decrease of 50.91% from the highest point in the cycle of 174.60 points (2022-06-21), and an increase of 47.14% from the lowest point of 58.25 points on August 6th, 2020. (Note: The cycle refers to 2012-03-01 present)

2、 Market analysis

From the supply side perspective, mainstream domestic potassium chloride distributors have seen a significant drop in quotes this month. The monthly terminal price of potassium chloride in Qinghai Salt Lake is around 2500 yuan/ton; At the end of the month, 62% of the port’s white potassium was around 2500 yuan/ton, a decrease of about 50 yuan/ton compared to the beginning of the month; At the end of the month, the self raised price of 60% Dahong particles at the port was around 2700 yuan/ton, a decrease of about 50 yuan/ton compared to the beginning of the month; At the end of the month, 62% of Russian white potassium in border trade was around 2400 yuan/ton, a decrease of about 50 yuan/ton compared to the beginning of the month. The potassium chloride port has a storage capacity of about 4 million tons.

From the demand side, the market price of potassium carbonate has slightly declined this month, dropping from 7400 yuan/ton at the beginning of the month to 7330 yuan/ton at the end of the month, a decrease of 0.95%. The end of month price has decreased by 19.63% compared to the same period last year. The factory price of potassium nitrate has slightly decreased this month, dropping from 5175 yuan/ton at the beginning of the month to 5112.50 yuan/ton at the end of the month, a decrease of 1.21%. The price at the end of the month has decreased by 14.22% compared to the same period last year. Overall, the downstream market for potassium chloride has slightly declined. Agricultural demand is average, industrial demand is weakening, and downstream manufacturers are less proactive in purchasing potassium chloride.

3、 Future Market Forecast

In mid to early March, the trend of potassium chloride market may fluctuate slightly and fall, with consolidation being the main trend. The prices of potassium chloride in salt lakes and Zangge are temporarily stable, and the market situation is average. Downstream agricultural demand is average, industrial demand weakens, and the price of potassium chloride may fluctuate and fall in the future.

This week, the price of metal silicon # 441 remained weak and stable. As of March 1st, the average price in the domestic metal silicon market was 15000 yuan/ton, a decrease of 0.92% compared to the previous week. Last week, the industrial silicon market was mainly weak and stable, mainly due to differences in price expectations between buyers and sellers. Some silicon companies had a willingness to hold up prices, while downstream procurement had a stronger pressure on prices. The game between the two sides was obvious, so market transactions increased, but to a lesser extent than expected. Downstream buyers mostly held a bearish sentiment and purchased according to demand. Therefore, the weak and stable operation of industrial silicon last week was mainly focused on

On the 23rd, the price of 441 # silicon in various regions is as follows:

The price range of # 441 metallic silicon in the Huangpu Port area is 14900-15000 yuan/ton, with an average price of 14950 yuan/ton; The price range of # 441 metallic silicon in Tianjin Port area is 15000-15100 yuan/ton, with an average of 15050 yuan/ton; The price range of # 441 metallic silicon in Kunming is 14800-15000 yuan/ton, with an average price of 14900 yuan/ton; The price range of # 441 metallic silicon in Sichuan region is 14700~14800 yuan/ton, with an average of 14750 yuan/ton; The price range of Shanghai # 441 metallic silicon is 15400-15600 yuan/ton, with an average price of 15500 yuan/ton.

The Factors Influencing the Price of Silicon Metal

In terms of supply:

As of February 29th, the number of silicon metal furnaces in China has reached 320, with an overall start-up rate of 41.1%, an increase of 1 furnace compared to last week. Last week, the number of industrial silicon furnaces opened increased as expected, and some manufacturers in the northwest have gradually increased their furnace opening. However, the southwest silicon plant is currently facing pressure to make losses, and there may be room for production reduction in the future.

In terms of inventory:

As of March 1st, the national social inventory of industrial silicon reached a total of 359000 tons, a decrease of 1000 tons compared to the previous week; This week, the inventory of industrial silicon factories was 86000 tons, a decrease of 3000 tons from last week. Among them, the social ordinary warehouse is 103000 tons, a decrease of 2000 tons compared to the previous week.

In terms of demand:

Last week, the price of polysilicon slightly increased, and the polysilicon industry started production steadily. After the holiday, the recovery of transactions was slow, and there may be a possibility of concentrated release in the later period. Currently, the demand for industrial silicon consumption from polycrystalline silicon continues to increase. In the early stage, polycrystalline silicon mainly consumed inventory of industrial silicon. Recently, silicon powder bidding orders have been released one after another, and the demand for replenishment may provide support for industrial silicon in the future.

Last week, the price of organic silicon slightly increased, while the price of aluminum alloy remained stable. The domestic organic silicon DMC market price reference was around 15120 yuan/ton, and the atmosphere of the organic silicon market was improving. Several companies were temporarily closed and did not provide external quotations. Coupled with the arrival of the traditional downstream peak season, the loss situation of organic silicon production has been improved. The current quotation for aluminum alloy ADC12 is 20000 yuan/ton. The production of aluminum alloy enterprises has increased, and it is expected to increase the consumption of industrial silicon during the traditional peak season. However, the current downstream demand for industrial silicon procurement has not been clearly reflected, and it is still mainly based on rigid demand procurement.

Future Market Forecast

In summary, on the supply side, silicon factories are gradually resuming production after the holiday, and the overall operating rate is still gradually increasing. However, in some areas, the operating rate is lower than expected, and the supply will not be concentrated in the short term; On the demand side, with the resumption of industry production, downstream silicon factory replenishment procurement will also gradually increase. The demand for polycrystalline silicon will maintain a stable growth trend, and the market heat of organic silicon will continue to increase under the traditional peak season. There may be a release of concentrated replenishment demand in the later stage, and the demand release is expected to increase. The social inventory has slightly decreased, and the overall inventory pressure is not significant. At present, the cost side support is temporarily stored, and the supply and demand side may turn into a situation of double increase in supply and demand. The fundamentals are favorable for the upward trend of silicon prices, but the recent weakening of futures markets and the specific release of downstream demand are unclear. The space for silicon price increase is limited, and it is expected that industrial silicon will slightly increase this week, with a strong operation as the main trend.

According to monitoring data from Business Society, as of February 29, 2024, the reference market price of domestically produced industrial grade propylene glycol was 8100 yuan/ton. Compared with January 1 (reference price of propylene glycol was 7900 yuan/ton), the price increased by 200 yuan/ton, an increase of 2.53%.

In February, the domestic propylene glycol market showed an overall upward trend. In early February, the overall performance of the propylene glycol market was calm. Before and after the Spring Festival, downstream demand for propylene glycol gradually weakened, and there was not much adjustment in supply and demand on the market. During the holiday period, the overall performance of the propylene glycol market was quiet, with limited market fluctuations. In late February, after the holiday, the focus of the propylene glycol market was overall upward. As of February 29th, the domestic propylene glycol market price was based on 7900-8200 yuan/ton, with an increase of about 100-300 yuan/ton compared to the beginning of the month.

Analysis of Supporting Factors for the Upward Market of Propylene Glycol

In terms of supply: In February, the overall production of propylene glycol was relatively low, and the overall inventory of propylene glycol in the field was controllable. After the holiday, there was less pressure on the supply side of the market. In addition, some factories performed well in export orders after the holiday, so the supply side provided some support for the propylene glycol market situation.

In terms of demand: On the eve of the Spring Festival, the downstream stocking of propylene glycol was basically completed, and the support provided by the demand side to the market was average. After the holiday, downstream factories of propylene glycol have resumed work and production, and downstream demand has gradually been released. The transmission between propylene glycol supply and demand has improved compared to before the holiday. Therefore, overall, the demand side also contributed to the rise in the propylene glycol market in February.

Market analysis of propylene glycol

At present, the trading atmosphere of propylene glycol on the exchange is mild, and the mentality of the operators is good. The propylene glycol data analyst of Business Society believes that in the short term, the propylene glycol market will mainly operate with large stability and small fluctuations, and the specific trend still needs to pay more attention to changes in supply and demand news.

1、 Price trend

According to the Commodity Market Analysis System of Business Society, as of February 29th, the average price of refrigerant R22 was 23666.67 yuan/ton, an increase of 9.57% from the beginning of the month’s price of 21600.00 yuan/ton, and an increase of 22.41% from the same period last year

According to the Commodity Market Analysis System of Business Society, as of February 29th, the average price of refrigerant R134a was 30666.67 yuan/ton, an increase of 7.60% from the beginning of the month’s price of 28500.00 yuan/ton, and an increase of 24.32% compared to the same period last year.

2、 Market analysis

In February, the domestic price of trichloromethane continued to rise, rising by 6.52%. The cost of raw materials continued to rise, and with the issuance of refrigerant quotas, R22 quotas were once again reduced. Most trading entities were bullish on the future market. In addition, the downstream stocking season is approaching, and manufacturers have a strong attitude towards price support, supporting the continuous upward trend of domestic R22 market prices in February.

Entering February, the quota policy for third-generation refrigerants has been implemented, and the refrigerant industry pattern continues to optimize. The price war among manufacturers has weakened, and the refrigerant industry as a whole has entered a business cycle. In addition, with the upcoming peak season for downstream refrigerant stocking in March, manufacturers have maintained a strong price stance, supporting the strong upward trend of domestic refrigerant R134a prices.

In February, domestic hydrofluoric acid prices remained stable with a weak trend, resulting in an overall decline of 0.5%. The stable and weak trend in raw material costs will to some extent limit the overall increase in domestic refrigerants in the future.

3、 Future Market Forecast

According to refrigerant analysts from Business Society, overall, the upstream raw material costs of domestic refrigerants are stable and slightly strong. Downstream is about to enter the peak stocking season, and with the support of costs and demand, it is expected that the prices of domestic refrigerants R22 and R134a will continue to remain strong in March.

According to the Commodity Analysis System of Business Society, the mainstream market price of urea in Shandong Province fluctuated and increased in February. The price of urea increased from 2431.67 yuan/ton at the beginning of the month to 2515 yuan/ton at the end of the month, an increase of 3.43%, and the price at the end of the month decreased by 10.53% year-on-year.

On February 27th, the urea commodity index was 116.82, an increase of 0.15 points from yesterday, a decrease of 23.31% from the highest point in the cycle of 152.33 points (2022-05-15), and an increase of 110.11% from the lowest point of 55.60 points on August 17, 2016. (Note: The cycle refers to the period from September 1st, 2011 to present)

From the supply side perspective, the mainstream ex factory price of urea in Shandong slightly increased in February.

Cost side: Upstream market drops significantly

From a cost perspective: Due to the impact of rainy and snowy weather in some regions of China, market circulation is restricted, terminal demand is released slowly, trading atmosphere is poor, and bearish sentiment is strong. Liquid factories have lowered prices to digest inventory. In February, the price of liquefied natural gas (LNG) dropped significantly, from 5196 yuan/ton at the beginning of the month to 3796 yuan/ton at the end of the month, a decrease of 26.94%. The price of Yangquan anthracite (washed fast) stabilized at a low level, with a price of around 960 yuan/ton. The price of liquid ammonia has dropped significantly, from 3236.67 yuan/ton at the beginning of the month to 2960 yuan/ton at the end of the month, a decrease of 8.55%, and a year-on-year decrease of 32.83% at the end of the month. Overall, the upstream market for urea has experienced a significant decline, with insufficient cost support.

Demand side: Low price consolidation of melamine

From the demand side, agricultural demand for urea is gradually starting, industrial demand is following the market, and urea exports are currently not favorable. Composite fertilizer, board, and melamine enterprises are operating at a low level, with a focus on procurement for essential needs. In February, the price of melamine stabilized at a low level, with a price of 7475 yuan/ton. From a supply perspective, some gas companies have resumed production and started operating higher. The data shows that the operating rate of domestic coal urea enterprises this week is about 86.1%, while that of gas urea enterprises is about 85.8%. The daily urea production in China is about 190000 tons.

In the future, the urea market may experience slight fluctuations and gains in mid to early March. Although the price of liquefied natural gas has dropped significantly, there is insufficient cost support. But agricultural demand is gradually starting, with industrial primary demand. The daily production of urea is about 190000 tons, with sufficient supply. In the future, urea may experience a slight fluctuation and rise.

Price: 2960 yuan/ton

Analysis: On February 26th, the liquid ammonia market in Shandong region rose. According to the Commodity Market Analysis System of Business Society, the daily increase in the main production area of Shandong was 4.47%. The main reason is the decrease in ammonia emissions from large factories in the early stage, as well as the maintenance of some equipment failures, which provides support for the supply side. On Monday, large factories in Shandong and surrounding Hebei generally raised prices by 150-200 yuan/ton. The dealer’s offer followed suit. In addition, the downstream procurement enthusiasm has improved after the holiday, urea has stabilized its operation, and the demand side continues to recover. At present, the mainstream quotation in Shandong region is between 2800-3000 yuan/ton.

Prediction: It is expected that northern liquid ammonia enterprises may resume work in the short term, and the tight supply pattern may improve in the later stage. Coupled with the gradual end of downstream procurement peaks, it is expected that the upward trend of liquid ammonia in the later stage will be difficult to maintain, and the possibility of price reversal cannot be ruled out.

Recently (2.13-2.20), the price of butyl acrylate has slightly decreased. According to data from Business Society, as of February 20th, the average price of butyl acrylate in East China was 9580 yuan/ton, a decrease of 0.21% from last Monday. The prices in various regions are as follows: the reference price in the East China market is 10000 yuan/ton; The reference price for the North China market is 10100 yuan/ton, while the reference price for the South China market is 10200 yuan/ton;

After the holiday, the raw material market temporarily stabilized, and the utilization rate of butyl acrylate production capacity remained stable. The factory mentality was bullish, and the quotation was pushed up. Downstream factories gradually turned against the market, and the purchasing mentality was cautious. The wait-and-see atmosphere on the market was strong, and we waited for further market clarity. It is expected that the trading market will gradually become active today, and downstream markets will still adopt a wait-and-see attitude, with contracts being the main focus, while butyl acrylate may maintain a strong operation.

Overall, analysts from Business Society believe that with the end of the holiday, there is an expectation of high demand for domestic butyl acrylate supply and demand, and some terminals are in a state of replenishment. The production of acrylic acid and ester units is expected to drive an increase in downstream demand. In addition, the exploratory boost in the acrylic acid and ester industry after the holiday may bring support and benefits to butyl acrylate.

Market Overview: According to the bulk list data of Business Society, as of February 18, 2024, the reference price of diethylene glycol in the domestic market was 5565 yuan/ton, an increase of 25 yuan/ton or 0.45% compared to February 8, 2024 (reference price of diethylene glycol was 5540 yuan/ton).

Before and after the holiday, the arrival of ships at the main port:

Holiday market situation: During the Spring Festival, diethylene glycol is in a closed state, with a shortage of shipments. During the holiday, 8000 tons of ships arrived, and the accumulated inventory is within the expected range. The actual pressure on the fundamentals is average. According to data statistics, from February 1st to 17th, 10000 tons of ships arrived at the main port, with a shipment volume of 3500 tons. During the Spring Festival period, only 690 tons were shipped from the two storage areas, with an arrival volume of 8000 tons, indicating a significant increase in inventory in the short term. During the Spring Festival, it is mostly a regular accumulation period, and the main downstream has a shortage of parking and shipping during holidays. Business owners pay more attention to the situation of entering ships. During the holiday, crude oil showed a strong trend with significant cost support. Despite the increase in commercial crude oil inventories in the United States and the continuous decline in refinery operating rates, market concerns about demand prospects have not been eliminated. However, the situation in the Middle East still concerns the market and OPEC+’s stance on reducing production is firm. As of February 18th, Jiangsu spot goods closed at 5640-5660 yuan/ton, an increase of 25 yuan/ton compared to the previous period; The delivery price of spot goods in South China closed at 5590-5610 yuan/ton, unchanged from before the holiday.

Post holiday forecast: Currently, the supply increment has been clarified, and there is still room for upward adjustment in domestic equipment production. The short-term import contraction is not significant, and the pace of destocking is relatively slow. After the holiday, the demand side will recover and adjust. The increase in downstream factory orders this week may not be clear, but the replenishment of raw materials will have a certain impact on the market. After the demand increases, there is room for the market to explore. Analysts from Shengyishe Diethylene Glycol believe that it is difficult to see a clear market trend in the short term, and prices may fluctuate and adjust with changes in demand.

During the Spring Festival holiday, the domestic PTA futures market remained silent, and CFR China’s trend followed the strength of crude oil. As of February 16th, CFR China rose to $778 per ton, up 2.10% before the holiday.

The geopolitical crisis continues to affect supply, with crude oil continuing to strengthen and PTA cost benefits providing significant support. As of February 16th, the settlement price of the main contract for WTI crude oil futures in the United States was $78.46 per barrel, and the settlement price of the main contract for Brent crude oil futures was $83.47 per barrel.

In the short term, international crude oil prices are temporarily strong, the peak of PX production has passed, and future new production capacity is limited, maintaining a tight supply situation. At the same time, the seasonal maintenance cycle of PX is approaching, so the cost side drive of PTA is still relatively strong.

With the expansion of the industry, PTA still has excess production capacity. By the end of 2023, the total production capacity of PTA reached 80.615 million tons, with a growth rate of 16.4%. The processing fee is showing a decreasing trend year by year, and some mainstream PTA suppliers have released maintenance plans for March and April, supporting the temporary healthy operation of processing fees. However, the deployment of new devices may still suppress expectations.

The demand for downstream polyester and terminal textiles is gradually recovering with the resumption of work during the Spring Festival. The traditional peak season in March is approaching, and domestic and foreign trade is heating up. Business Society analysts believe that under the expectation of stronger fundamentals, PTA prices may fluctuate after the Spring Festival.

Price trend

Recently, the domestic PA6 market has been relatively strong, with most spot prices remaining stable. According to data monitoring from Business Society, as of February 7th, the domestic benchmark price of PA6 mixture was 14775 yuan/ton, which is consistent with the average price level at the beginning of the month.

Cause analysis

In terms of raw materials:

From the above chart, it can be seen that the market price of caprolactam has continued to rise recently. Affected by the rising price of raw material pure benzene, the cost support of caprolactam has strengthened. Overlapping with the reduced load operation of some enterprise devices, the market supply has decreased, and the price of caprolactam has steadily increased, increasing the support for the cost side of PA6.

In terms of supply:

Recently, the load of PA6 production enterprises has remained stable and slightly increased, with the average operating rate rising narrowly from 79% at the beginning of the month to about 81%. The market supply has remained relatively stable compared to the previous period, and the on-site supply of goods is relatively abundant. The inventory level is still not high, the pressure on suppliers is not significant, and there is still support for PA6 spot goods.

In terms of demand: In the downstream sector, the main downstream industries are gradually on vacation, and the load has significantly decreased. In terms of spinning, the operating rate has been reduced by 11% to around 67%. The weaving load decreased by 32% to 23%. The pre holiday stocking demand of terminal enterprises has been basically completed, and the current market trading is concentrated on forward contracts. Reduced impact on PA6 demand side.

Future Market Forecast

Recently, the PA6 market has shown a strong consolidation trend. The price of caprolactam has strengthened, and there is still support for the cost side of PA6. The load of domestic polymerization plants remains stable with small fluctuations, and the inventory position remains low. Terminal enterprises are basically on vacation and delisted. Overall, the post holiday PA6 market may continue to operate strongly due to cost side benefits.