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.

According to the commodity market analysis system of Shengyishe, the price of styrene in Shandong was 8000 yuan/ton on January 1st, and 8560.00 yuan/ton on December 31st, with a year-on-year increase of 7.00%. The lowest point of the price trend appeared at around 7163.33 yuan/ton at the end of June, and the lowest point appeared in mid September at 9766.67 yuan/ton, an increase of 36.34% from the lowest point.

styrene

In 2023, the overall price of styrene showed a trend of “fluctuating decline, rise, and fluctuating decline”. From the monthly K-bar chart of Business Society, the number of months in which styrene prices fell in 2023 was more than the number of months in which they rose. Among them, July had the largest upward trend, reaching 15.29%, and June had the largest downward trend, reaching 8.34%.

The specific market situation of styrene in 2023 is as follows:

In January, before the Spring Festival, under optimistic expectations after the epidemic was lifted, the price of styrene continued to rise and reached 9000 yuan/ton. After the Spring Festival, downstream demand has recovered slowly, with prices falling back to 8400 yuan/ton in February, March, and April.

In May, weak costs and pessimistic macroeconomic sentiment dragged down prices, with prices continuing to decline from 8200 yuan/ton to 7400 yuan/ton, a monthly decline of 5.84%. In June, due to the continued downward shift in raw material prices and an increase in port inventory, prices further declined, with a monthly decline of 8.34%.

In the third quarter, there were many unplanned maintenance and slow restarts of the styrene unit, resulting in a supply increase that was lower than expected; On the cost side, as crude oil enters the peak season and major oil producing countries continue to reduce production, oil prices continue to rise. At the same time, pure benzene continues to deplete inventory and supply and demand are tight, leading to a stronger price; Multiple positive factors are driving the price center of styrene to continue to rise.

In the fourth quarter, prices fluctuated horizontally. The maintenance of the styrene plant is still concentrated, with relatively low production and low port inventory, which provides good support for prices. The overall stability of downstream construction is maintained, and there is still a demand for styrene. The supply and demand of pure benzene are tight, and the price is relatively firm. Therefore, the price trend of styrene deviates from crude oil and remains fluctuating in the range of 8300-9000 yuan/ton.

Prediction of styrene market in 2024:

Cost side

In 2023, pure benzene inventory continued to decline and supply and demand were tight, supporting strong prices. The overall price center shifted upwards, and the mainstream price of pure benzene in East China fluctuated between 6040-8915 yuan/ton, with an annual increase of 10.51% as of December 31. Looking ahead to 2024, pure benzene will continue to maintain a tight supply-demand balance and be at the profitable end of the industry chain. The price trend will be relatively strong downstream. In 2024, pure benzene is expected to be put into production by 1.2 million tons, while major downstream industries such as styrene, caprolactam, and phenol are expected to build 4.28 million tons of production capacity. From the price trend, pure benzene prices will still be constrained by upstream and downstream factors, but overall performance is relatively strong, and it is expected that the market will continue to rise.

Supply side

Since 2020, styrene production capacity has rapidly expanded, with a growth rate of over 20%. In 2023, 3.755 million tons of new equipment were put into operation, with a total production capacity of 20.865 million tons, an increase of 19.81% compared to 2022. As shown in the above figure, there are plans to invest 2.8 million tons/year of production capacity in 2024, most of which are concentrated in the first half of the year, and the industry’s production capacity is still increasing. In the upcoming year 2023, styrene is still in a large production cycle, and the industrial chain will also experience concentrated production. The growth rate of production capacity in various core links upstream and downstream may reach a high level. Looking ahead, styrene is rapidly moving towards supply saturation or even excess.

Demand side

The demand for styrene mainly lies in the three downstream industries, with EPS accounting for 24%, PS accounting for 24%, and ABS accounting for 22%, totaling 70% of the total consumption. In recent years, with the expansion of PS and ABS production capacity, their proportion in styrene consumption has increased. In 2024, based on the initial estimation of the production plan and annual operating rate of the equipment, the new production of styrene is expected to reach 2.04 million tons, and the new demand from the three major downstream industries is expected to reach 4.6 million tons. The supply-demand gap is expected to be 2.56 million tons, indicating that the supply pressure of styrene will be alleviated. In summary, the increase in production capacity in the three downstream sectors is favorable for the styrene market.

styrene

The import volume of styrene in China in 2023 was 790500 tons, a decrease of 30.85% compared to 2022. The export volume of styrene from China in 2023 was 366200 tons, a decrease of 34.90% compared to 2022. Looking ahead to 2024, domestic styrene is still in the period of expanding production capacity, with abundant supply. It is expected that imports will continue to decline, and monthly imports may remain below 50000 tons/month. Affected by the continuous expansion of domestic production capacity, the profits of the equipment have been continuously compressed and have been in a state of loss or low profit for a long time. Some overseas equipment has also been affected and stopped production due to economic efficiency issues, resulting in a decrease in overseas production and an increase in domestic exports. Looking ahead to 2024, styrene exports are expected to maintain a stable and increasing trend.

The styrene data analyst from Business Society believes that in 2024, the price of styrene will be balanced by changes in cost guidance, import and supply volume, and downstream purchasing enthusiasm. From a cost perspective, pure benzene will continue to maintain a tight supply-demand balance and be at the profit end of the industry chain, with a relatively strong price trend compared to downstream. From the supply side perspective, production capacity continues to expand. From the demand side perspective, downstream production capacity continues to expand rapidly, and if the equipment is put into operation as scheduled, it will bring about a significant increase in demand. From the perspective of imports and exports, with the continuous increase of domestic production capacity, the proportion of imports and exports has reversed, and the proportion of exports has continued to increase. In summary, it is expected that the styrene market in 2024 will mainly increase compared to above 2023, and it is expected to operate mainly in the range of 7000 to 10000 yuan/ton.

Price: 2983 yuan/ton

Analysis: On February 5th, the liquid ammonia market in Shandong region fell. According to the Commodity Market Analysis System of Business Society, the daily decline in the main production area of Shandong was 2.19%. The main reason is that manufacturers try to ship as much as possible before the holiday, leading to an increase in ammonia emissions from large factories, as well as the resumption of work after some equipment failures and maintenance, resulting in a loose supply side performance. Last weekend, a large factory in Shandong lowered prices by over 300 yuan/ton. On Monday, dealers mostly reported lower prices, resulting in sluggish sales. And the downstream procurement enthusiasm is not high, urea remains weak in operation, and the weak demand side suppresses the price of liquid ammonia. At present, the mainstream quotation in Shandong region is between 2800-3000 yuan/ton.

Prediction: Downstream procurement will slow down before the holiday, with sufficient supply and no improvement in downstream demand. It is expected that liquid ammonia will remain weak in the near future.

1、 Price trend

According to the Commodity Market Analysis System of Business Society, as of February 4th, the reference average price of 85% thermal phosphoric acid in China was 6410 yuan/ton, which is 0.31% lower than the reference average price of 6430 yuan/ton on January 29th.

According to the Commodity Market Analysis System of Business Society, as of February 4th, the reference average price of 85% wet process phosphoric acid in China was 6366 yuan/ton, which is lower than the reference average price of 6366 yuan/ton on January 29th. The domestic wet process phosphoric acid price remained stable this week.

2、 Market analysis

This week, the price of hot process phosphoric acid slightly decreased, while the price of wet process phosphoric acid remained stable. The raw material prices have remained stable this week, and there have been no fluctuations in the cost side for the time being. At present, phosphoric acid factories and downstream enterprises are gradually on vacation, leading to a decrease in market supply and a weakening demand for terminal replenishment. As of February 4th, the factory price of 85% thermal phosphoric acid in Yunnan region is around 6600 yuan/ton, and the factory price of 85% thermal phosphoric acid in Hubei region is around 5950-6700 yuan/ton. The domestic market quotation for 85% wet process phosphoric acid is around 5450-6950 yuan/ton.

Market for raw material yellow phosphorus. This week, the domestic yellow phosphorus market prices remained stable, with pre holiday market trading approaching its end and few new orders. As of February 4th, the market price for yellow phosphorus is around 24000 yuan/ton, and the actual transaction is negotiable.

In terms of raw material phosphate ore. The overall supply and demand adjustment of phosphate ore is not significant this week. As the Spring Festival approaches, the downstream stocking and winter storage of phosphate ore have come to an end, and the market has remained stable and organized. The fluctuation of phosphate ore market is relatively small, and the overall market is relatively quiet. As of February 4th, the domestic market price for 30 grade phosphate ore is around 1030-1100 yuan/ton.

3、 Future Market Forecast

The phosphoric acid analyst from Business Society believes that the phosphoric acid market has been stabilizing recently. The shutdown of phosphoric acid enterprises has begun to increase, and downstream replenishment demand has weakened. It is expected that the short-term phosphoric acid market prices will remain stable and operate steadily.

Recently (1.29-2.2), the market trend of ethyl acrylate has also remained stable. According to data from Business Society, as of February 2, the average price of isooctyl acrylate in Shandong was 10600 yuan/ton,

The market price of ethyl acrylate in East China is 10500 yuan/ton, and in North China it is 10700 yuan/ton; The market price in South China is 10800 yuan/ton.

The market price of ethyl acrylate tends to stabilize for most of the time. With the increase in stocking demand before the Spring Festival, the overall price of the acrylic acid and ester industry chain has risen, driving the stable price of the ethyl acrylate market. However, downstream users still generally maintain a rhythm of essential purchase, and the market mostly maintains a low consolidation operation before and after the Spring Festival.

At present, the rise of the ethyl acrylate market is mainly affected by the rise of raw materials, with limited support from the raw material and spot ends. From the perspective of the acrylic ester industry chain, the ethyl acrylate market has the smallest fluctuation, and the pre holiday prices are mostly stable.