As of July 25th, the current domestic operating rate of BDO is around 67.82%, with a full month operating rate of around 65%. Most downstream terminal areas are in the off-season in July, with small orders for just needed purchases being the main focus, and the overall market is in a tight and balanced supply state.

From the current information, there is a decrease in supply in August. On the demand side, July August is the traditional off-season, while September is the traditional peak season. Downstream demand for BDO is increasing month by month. Based on the current actual supply and demand, it cannot be ruled out that there will be a “mismatch” between supply and demand in the third quarter of BDO. Specifically:

On the supply side, based on the comprehensive calculation of existing maintenance and restart messages, the BDO operation in August was around 54%. If there are new maintenance and unexpected shutdowns, the operation rate will be lower. From this perspective, the BDO supply in August significantly decreased compared to July.

On the demand side, August gradually enters the peak demand season, and the traditional peak season demand base in September is greater than the overall demand in the off-season. Among them, the main downstream PTMEG has maintained tight supply since July, and the seasonal demand for its main downstream spandex from August to September only increases and does not decrease for PTMEG. Another major downstream PBT is that the demand for spinning in the peak season will be higher than that in the off-season, while the demand for GBL, degradable materials, PU, TPU, and other fields will maintain and have the potential for slight growth.

Overall, it is expected that BDO in the third quarter, especially from August to September, will gradually decrease in market supply and inventory, and demand will inevitably increase under the peak season effect, with a high probability of tight market supply.

Product name: PVC

Latest price: 5683.33 yuan/ton

Key points of analysis: The PVC market was operating weakly on July 24th. The spot price of the market fell slightly, and the futures closed down, which depressed the confidence of the Spot market. Traders have low enthusiasm for purchasing goods, and downstream purchases are made on demand, with caution in actual orders. At present, the trading atmosphere in the Spot market is not good, and the market trading is light.

Forecast: In the short term, the PVC Spot market will be weak in consolidation and operation.

1、 Price trend

According to the Commodity Market Analysis System of the Business Society, as of July 21, the reference average price of 85% industrial grade thermal phosphoric acid in China was 6600 yuan/ton, which is 6560 yuan/ton compared to the reference average price on July 17. This week, the domestic thermal phosphoric acid price increased by 0.62%.

According to the Commodity Market Analysis System of Business Society, as of July 21, the reference average price of 85% wet process phosphoric acid in China was 6433 yuan/ton, which is 0.52% lower than the reference average price of 6466 yuan/ton on July 17.

2、 Market analysis

The market price of thermal phosphoric acid has increased this week. The price of raw material yellow phosphorus has increased, leading to increased cost support. Downstream on-demand procurement, with a focus on wait-and-see in the industry, and fair market trading. As of July 21, the ex factory quotation of 85% thermal phosphoric acid in Yunnan was about 6700 yuan/ton, that of 85% thermal phosphoric acid in Hubei was about 6600-6700 yuan/ton, and that of 85% thermal phosphoric acid in Sichuan was about 6400-6600 yuan/ton.

In terms of raw material yellow phosphorus, the market price of Yungui yellow phosphorus increased this week. As of July 21st, the quotation for yellow phosphorus in the Yungui region of China is around 23600 yuan/ton, and the actual transaction is negotiated.

In terms of raw phosphorus ore, the overall domestic phosphorus ore market showed a weak decline this week. As of July 21st, the domestic market price for 30% grade phosphate ore is based on a reference of around 902 yuan/ton.

3、 Future Market Forecast

Business Society phosphoric acid analysts believe that the price of thermal phosphoric acid has slightly increased this week, and the market is moving well. At present, the market for raw material yellow phosphorus is unstable, and terminal demand needs to be followed up. The phosphoric acid market is mainly cautious and wait-and-see. It is expected that in the short term, the market price of phosphoric acid will be adjusted and operated in a narrow range.

According to the Commodity Analysis System of the Business Society, in the first half of 2023, the overall decline of soda ash was observed, with a “parabolic” pattern. At the beginning of the year, the average market price was 2648 yuan/ton, and on June 30th, the price was 1960 yuan/ton, a decrease of 25.98%.

From the annual price comparison chart of soda ash, it can be seen that the highest price of soda ash occurred around November 2021, and in the first half of 2023, the overall trend was high and low.

According to the Commodity Analysis System of the Business Society, the first half of 2023 showed four stages as a whole, with prices rising from January to early February. The period of price consolidation from February to April, followed by a downward trend in prices from April to early June, and finally showing a consolidation trend.

Phase 1: Upward phase. At the beginning of the year, the price was 2468 yuan/ton, and on February 6th, the price was 2730 yuan/ton, with a price increase of 3.1%. Because during the Spring Festival, although the supply of soda ash is relatively stable, downstream glass is stocked up before the festival, and the price of soda ash has slightly increased.

Second stage: consolidation stage. On February 6th, the price of soda ash was 2730 yuan/ton, and in early April, it was 2760 yuan/ton, with a price increase of 1.1%. The supply of soda ash is relatively stable, and the market trading atmosphere is relatively mild. However, downstream glass is mostly purchased according to demand, with a wait-and-see attitude, and supply and demand are still in a game.

Phase 3: Downward phase. At the beginning of April, the price of soda ash was 2760 yuan/ton. On June 6th, the price of soda ash was 1950 yuan/ton, a decrease of 29.36%. The supply of soda ash is relatively sufficient. According to data from the National Bureau of Statistics, the cumulative production of soda ash in China from January to May was 13.14 million tons, an increase of 1.03 million tons or 8.47% compared to the same period last year. The downstream demand for soda ash is average, and it is still mainly purchased on demand, with a strong wait-and-see sentiment. Market participants have a strong bearish mentality in the upstream and downstream supply and demand game.

Stage 4: It is also a consolidation stage, but the price is far lower than the beginning of the year. The entire June was consolidated at around 1960 yuan/ton. The soda ash plant is relatively stable, and the overall trading atmosphere is acceptable. Recently, downstream soda ash has been purchased on demand, with supply and demand playing a game and soda ash prices fluctuating.

Forecast: Supply side

Data shows that as of July 6th, the inventory of domestic soda ash production enterprises was 395800 tons, which is at a five-year low level. The maintenance of soda ash from July to August is relatively concentrated, and it is expected that domestic soda ash inventory will slightly decrease in the short term.

In terms of demand

From the comparison chart of soda ash and glass price trends, it can be seen that the spot market of glass rose from January to June 2023. The average price in the monitored area was 18.68 yuan/square meter on January 1, and 21.35 yuan/square meter on June 30, with a comprehensive increase of 14.29% in the first half of the year. Although the price of glass slightly increased from April to May, it fell behind in stage replenishment after May, weakening market confidence, and the price of glass continued to weaken.

Analysts from Business Society believe that there will be more companies engaged in equipment maintenance for soda ash from July to August, and overall inventory will decline, providing favorable support for soda ash prices. However, based on the glass situation, real estate support is average, market confidence is average, and there is little room for soda ash prices to rise. In addition, although there are many short-term maintenance plans for soda ash, the production capacity deployment cycle for soda ash will also start. If new production capacity is launched on schedule in September, the inventory of soda ash will continue to accumulate. Data shows that the total inventory of domestic soda ash is expected to increase by 500000 to 700000 tons in the fourth quarter, with upstream inventory exceeding 1 million tons. Overall, it is expected that after a slight increase in the price of soda ash in the short term, the price may decline under pressure, depending on downstream market demand.

Recent price trends of hydrochloric acid

According to the Commodity Analysis System of Business Society, the domestic hydrochloric acid market price has temporarily stabilized this week, with an average market price of 179.60 yuan/ton. Weekend prices fell by 20.77% year-on-year. On July 16th, the hydrochloric acid commodity index was 47.26, unchanged from yesterday, a decrease of 65.73% from the cycle’s highest point of 137.89 points (2021-10-26), and an increase of 162.85% from the lowest point of 17.98 points on September 5th, 2012. (Note: The cycle refers to the period from September 1st, 2011 to the present)

Upstream support is average, while downstream demand weakens

From the supply side perspective, the domestic hydrochloric acid market prices have temporarily stabilized this week, and manufacturers’ inventory is average.

From the perspective of the upstream and downstream industrial chain of hydrochloric acid, the upstream liquid chlorine market is consolidating at a low level, with average cost support. The downstream Aluminium chlorohydrate market price rose slightly, from 1712.50 yuan/ton at the beginning of the week to 1718.75 yuan/ton at the end of the week, up 0.36%. Weekend prices fell by 22.23% year-on-year; The market price of ammonium chloride has stabilized at a low level, with a market price of 605.00 yuan/ton. Over the weekend, the price fell by 58.91% year-on-year. Overall, upstream support is average, while downstream demand is weak.

Future Market Forecast

In late July, the market price of hydrochloric acid may experience a narrow range of fluctuations and declines. The upstream liquid chlorine market was consolidated at a low level, and the cost support was general. The downstream Aluminium chlorohydrate market rose slightly, while the ammonium chloride market was consolidated at a low level, and the downstream purchase intention was weak. Analysts from Business Society believe that the recent slight fluctuations in the hydrochloric acid market have been the main trend.