According to the Commodity Market Analysis System of Business Society, the domestic PTA market has been fluctuating and declining since January. As of January 15th, the market price in East China was 5753 yuan/ton, a decrease of 2.98% compared to the beginning of the month. PTA supply is sufficient, dragging down prices. In addition, international crude oil has high volatility, but overall it shows a downward trend, which weakens the support for PTA costs.

 

In the crude oil market, the disturbance in the Middle East continues, and the situation is not clear. There is no sign of cooling in the short term, and oil prices still receive significant support. However, the US oil inventory has accumulated, and the market is once again concerned about economic weakness, which has significantly dragged down oil prices. Therefore, under the long short game, crude oil prices are mainly volatile. As of January 12th, the settlement price of the main contract for WTI crude oil futures in the United States was $72.68 per barrel, and the settlement price of the main contract for Brent crude oil futures was $78.29 per barrel.

 

Since January, from the perspective of PTA supply side, the production capacity operating rate has remained stable with little change, and the industry operating rate has remained around 82%. The pressure of sufficient supply of goods still exists. Among them, the 2 million tons/year installation of Yisheng Hainan will be inspected on December 25, 2023, and will be restarted to increase the load around January 15, 2024, or to increase the pressure of PTA supply.

 

The downstream polyester operating load is around 84%, and there are currently no plans for maintenance or restart of other large-scale polyester plants. The polyester factory has entered the annual maintenance phase, and production will slowly decline. Currently, as the Spring Festival maintenance period approaches, the load will further decrease. Although terminal demand has significantly weakened, there has not been a large-scale shutdown in the downstream. Currently, the comprehensive production of weaving machines in Jiangsu and Zhejiang is around 70%, and there has been no significant decline. Some enterprises may purchase raw materials at low prices in stages.

 

According to analysts from Business Society, the PTA market has recently declined, and the enthusiasm of polyester factories to replenish goods has increased compared to the previous period. The strengthening of short-term support for PTA demand may improve the pressure on sufficient supply of PTA goods. But considering that the Spring Festival is approaching, most downstream factories will be shut down for a month and a half, and demand is expected to weaken. In the crude oil market, the situation in the Middle East is still turbulent and there is no sign of cooling in the short term, which may continue to fluctuate. Therefore, overall, PTA will experience a short-term warming adjustment, and prices will also weaken in the future as demand drags down.

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According to the commodity market analysis system of Shengyishe, on January 12th, the benchmark price of Shengyishe glycerol (glycerol) was 4575.00 yuan/ton, a decrease of 0.27% compared to the same period last week.

 
Influencing factors:

 

The domestic glycerol market has been affected by the impact of imported glycerol and cost factors, resulting in weak and stable glycerol prices. The downstream market demand for epichlorohydrin is weak, and manufacturers have low operating rates. Most enterprises purchase on demand. At present, there is no improvement in the market and it is operating weakly and steadily.

 

Analysts predict that the domestic glycerol market will mainly operate weakly and steadily in the future.

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According to the commodity market analysis system of Business Society, the formaldehyde market in Shandong has recently declined. At the beginning of the week, the average price of formaldehyde in Shandong was 1166.67 yuan/ton, and on the weekend, the average price of formaldehyde in Shandong was 1153.33 yuan/ton, a decrease of 1.14%. The current price has dropped by 4.42% compared to last year.

 

formaldehyde

 

Recently, the price of formaldehyde in the Shandong region has fluctuated and fallen. From the above chart, it can be seen that the formaldehyde market has mainly fluctuated slightly in the past two months, and this week the market continues to decline slightly. As of January 11th, the mainstream market price in Shandong region is 1060-1200 yuan/ton. This week, the price of raw material methanol fluctuated, with poor cost support. The Spring Festival is approaching, and downstream sheet metal factories are taking early leave. Demand continues to decline, and the formaldehyde market is mainly experiencing a slight decline.

 

Upstream methanol situation: The domestic methanol market is operating in a narrow range. In terms of supply, global coal supply is stable, domestic imports have increased, and the increase in domestic demand is not enough to support coal prices to operate at high levels; In terms of demand, the overall pressure on inventory in power plants is relatively low. Currently, the terminal mainly relies on long-term cooperative replenishment, with on-demand replenishment. The demand for coal in the market is relatively flat, and the overall sentiment is wait-and-see. The short-term coal market maintains a weak operation. The cost side of methanol is influenced by bearish factors.

 

Recently, the methanol market has been consolidating, with poor cost support. Downstream panel factories have been taking a break, and the formaldehyde operating rate has also continued to decline. Market trading has been light, so formaldehyde analysts from the Chemical Branch of Shengyishe predict that the price of formaldehyde in Shandong will mainly decline in the near future.

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Product Name: MIBK

 

The latest price (January 10th) is 15333 yuan/ton, an increase of 1.55% from the previous working day’s 15100 yuan/ton. Analysis: Affected by the tight supply side, the MIBK market has seen an upward shift in focus, with tight spot supply and insufficient circulation of goods in the market. Traders have pushed up prices with a small amount of supply. From a downstream perspective, terminal factories mainly rely on rigid procurement, and their acceptance of high prices is limited. From a cost perspective, the impact is not significant, as the acetone market rose and then fell.

 

Affected by short-term tight demand, it is expected that the MIBK market will continue to operate steadily in the near future, but downstream enthusiasm for raw material procurement is not high, with primary demand for essential goods.

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Price trend

 

According to the monitoring of Business Society, the average price of PS in 2023 was 9766 yuan/ton. At the end of 2023, the average price of PS was 9566 yuan/ton, a decrease of 2.05%.

 

quotations analysis

 

Phase 1

 

Prices have fallen from January to March. With the sharp decline of crude oil and the continuous decline of styrene, the pressure on petrochemical manufacturers to ship has increased. The market supply is sufficient, and businesses have reduced prices to sell, forming an inverted market situation. At the end of March, due to the reduction of production and parking of some PS devices, and the tight supply of some materials and goods, merchants raised their offers, but the pressure on shipping remains significant.

 

Phase 2

 

From April to June, prices first rose and then fell. In April, affected by weak demand, merchants reduced prices to sell, but the overall decline in the PS market was limited due to tight supply of goods and support from replenishment costs. From May to June, due to the increase in the focus of styrene, businesses are exploring to increase prices for sales. In addition, the PS plant has been shut down for maintenance and production reduction, resulting in an increase in market prices.

 

Third stage

 

Prices have increased from July to September. In July, the manufacturers carried out a lot of equipment maintenance, which led to a tight spot circulation of some materials. The price of some PS petrochemical manufacturers increased, which led to a rise in the prices of merchants. After the Mid Autumn Festival, the petrochemical manufacturers actively raised prices and the supply of goods was tight. The atmosphere of price increases in the market was strong, and PS prices continued to rise.

 

Stage 4

 

Prices have fallen from October to December. The overall trend of crude oil shows a volatile downward trend, with styrene under heavy pressure and futures continuously falling. PS petrochemical manufacturers have lowered prices, while ordinary material prices have also fallen. Although some materials have tightened due to production cuts, merchants mainly offer discounts for shipments.

 

Future Market Forecast

 

In terms of supply: China’s polystyrene industry is still in the development stage, and there is still a certain gap compared to foreign countries in terms of technology level, product quality, and product structure. The scale of the domestic polystyrene market is growing rapidly, and production capacity is in the growth stage from 2020 to 2023. In 2023, China’s effective PS production capacity is about 7.2 million tons, accounting for 39% of the global production capacity. In 2024, PS is in a high-speed expansion period, with an expected new production capacity of about 1.46 million tons and a capacity growth rate of 20.1%.

 

PS production capacity growth situation

 

In terms of supply: China’s polystyrene industry is still in the development stage, and there is still a certain gap compared to foreign countries in terms of technology level, product quality, and product structure. The scale of the domestic polystyrene market is growing rapidly, and production capacity is in the growth stage from 2020 to 2023. In 2023, China’s effective PS production capacity is about 7.2 million tons, accounting for 39% of the global production capacity. In 2024, PS is in a high-speed expansion period, with an expected new production capacity of about 1.46 million tons and a capacity growth rate of 20.1%.

 

In terms of demand: In 2023, China’s PS demand increased by 7% year-on-year, maintaining a high global demand position. This high growth rate is mainly due to the rapid recovery of the home appliance and fast-moving consumer goods sectors after the end of the epidemic. The main application areas of PS are the inner and outer compartments of household appliances, as well as the packaging of fast-moving consumer goods, accounting for 49% and 21% respectively.

In summary, under the policy of “ensuring delivery of buildings”, the completion data has performed well, driving the demand for household appliances and boosting PS consumption to a certain extent. It is expected that PS supply will steadily increase. In 2024, it is planned to add 1.46 million tons of production capacity, distributed throughout the year, which is equivalent to about 1.3432 million tons of styrene demand, still the second largest downstream of styrene.

 

In 2024, the global economy still faces challenges as domestic economic fundamentals slowly recover, PS expansion continues, domestic supply continues to rise, industry pressures continue to escalate, and downstream demand grows steadily, but far slower than supply growth. Overall, it is expected that the low prices in the domestic PS market will become the norm in 2024. The mainstream operating range for ordinary grade GPPS products may be between 7400-10000 yuan/ton, while the mainstream operating range for ordinary grade HIPS products may be between 8000-10200 yuan/ton.

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