As the holiday approaches, the epoxy resin market has broken the long-term downturn and the focus of negotiations has increased this week. By the 26th, the mainstream negotiated price in East China was 14000-14500 yuan/ton of purified water, and the negotiated price in Mount Huangshan solid epoxy resin market was 1360-14000 yuan/ton. Compared to last week, the increase is about 500 yuan/ton.

Enhanced cost support for dual raw material heating

The market for raw material bisphenol A has shown a significant upward trend. Prior to the holiday, due to tight supply and tight spot resources, the market quotation quickly exceeded 10000 yuan. As of the 26th, the negotiated price for bisphenol A in the market was 10050 yuan/ton. The market resource is limited, and there is no pressure on the supply of goods by the holders to release profits and have little intention of shipping. However, the downstream procurement pace has slowed down after the price rose to 10000 yuan. With the approaching holiday, the actual orders on the market mainly need to be followed up, with fewer large orders. However, the upward trend of the bisphenol A market has a greater support for downstream epoxy resins.

The raw material epichlorohydrin also showed a significant upward trend in late April. On April 20th, the market negotiated a price of 8825 yuan/ton, and as of now, the market negotiated a price of 8975 yuan/ton. Although the trading volume this week was slightly weak, it still has a supportive effect on the downstream epoxy resin market from a cost perspective.

The current operating rate of the epoxy resin plant is around 50%, and downstream demand is mainly small orders. Although the current cost support is strong, the actual order volume of the epoxy resin itself is insufficient.

The increase in raw material bisphenol A is significant, with negotiations reaching around 10050 yuan/ton. The price of raw material epichlorohydrin continues to be strong. Both raw materials are supported, but from the downstream perspective of epoxy resin, there has been no significant improvement in procurement. The actual transaction volume of epoxy resin is insufficient, and it is expected that there will be little change before the holiday, maintaining a strong operating state. The negotiation reference for liquid epoxy resin in the East China region is 14000-14500 yuan/ton of purified water for factory delivery.

The high price of aluminum has fallen back

According to the Commodity Market Analysis System of Business Society, on April 25, 2023, the average price of domestic aluminum ingots in the East China market was 18843.33 yuan/ton, a daily decrease of 0.37%, and an increase of 0.89% compared to the aluminum price of 18676.67 yuan/ton at the beginning of the month (April 1).

In the long run, after the current high price has fallen, it has been fluctuating sideways within the range of 17500 to 19500 yuan/ton. In mid April, aluminum prices improved, breaking through 19000 yuan/ton within the month, and starting to decline this week.

Overview of recent market trends and motivations

The insufficient precipitation in the southwest and northwest has triggered a trend of reduced production of electrolytic aluminum, driving up the early aluminum price market. Recently, the hype has been released, and the high aluminum price has slightly declined.

Supply and demand fundamentals

Supply side: Electrolytic aluminum production is slowly resuming in Guizhou, Sichuan, and other regions, while new production capacity is released in Gansu Zhongrui and Baiyinhua. The drought in the southwestern region is intensifying, and attention is being paid to the trend of another reduction in production of electrolytic aluminum.

On the demand side: Downstream processing enterprises have a stable preference for operating conditions, and overall demand is expected to be positive, but the range is limited.

Inventory data: The significant decline in domestic inventory is mainly due to the increase in the proportion of aluminum to water, leading to a decrease in ingot production. At the same time, the maintenance of Xinjiang’s outbound railways has affected the shipment volume. Data shows that as of April 24th, the social inventory of mainstream regions in China was 838000 tons, which is 220000 tons compared to March 30th.

Future market forecast

From the supply side perspective, production remained stable in April, and inventory data showed a clear trend of inventory depletion in the electrolytic aluminum industry. The main game point currently lies in the actual supply and demand changes in the later stage. It is expected that aluminum prices will mainly fluctuate around 18800 yuan/ton in the short term, and we will be watching downstream consumption intensity in the near future.

Latest price: 9900 yuan/ton in the East China market

The focus of the domestic bisphenol A market is on the rise, with market offers ranging from 9850 to 9900 yuan/ton. The current industry operating rate is 70%, and the spot resources are limited towards the end of the month. As the holiday approaches, the enthusiasm for entering the downstream epoxy resin market has increased, and the market negotiation atmosphere has improved. The supply of goods in North China is still slightly tight, and the intention of factories to adjust prices is obvious. Traders’ offers have driven up. It is expected that the market will continue to strengthen in the near future, and attention will be paid to downstream demand.

On April 24th, the quotation situation of bisphenol A in the mainstream domestic market:

Region/ Quotation/ Daily fluctuations

East China region/ 9900./ 150

Shandong region/ 9850 ./ one hundred

According to the monitoring of the Commodity Market Analysis System of the Business Society, the domestic price of LLDPE (7042) was 8314 yuan/ton on April 17, and the average price on April 21 was 8340 yuan/ton. During this period, the increase was 0.31%, an increase of 0.79% compared to April 1.

According to the monitoring of the Commodity Market Analysis System of the Business Society, the average ex factory price of LDPE (2426H) on April 17th was 8812 yuan/ton, and the average price on April 21st was 8757 yuan/ton. During this period, the decline was 0.62%, a decrease of 1.46% compared to the quotation on April 1st.

According to the monitoring of the Commodity Market Analysis System of the Business Society, the average ex factory price of HDPE (5000S) on April 17th was 8866 yuan/ton, and the average price on April 22nd was 9062 yuan/ton. During this period, the quotation increased by 2.21%, an increase of 4.97% compared to April 1st.

This week, polyethylene saw a narrow adjustment, with LDPE prices falling in a narrow range and LLDPE and HDPE prices rising. On the cost side, the weakening of international crude oil prices this week has weighed on the polyethylene market. On the supply side, HDPE prices have increased due to insufficient supply. Next week, the maintenance device will restart and start operation, and there is expected to be an increase in polyethylene supply. Downstream demand, overall demand is lower than expected, and in terms of packaging film, procurement is mainly for just needs; The peak season for plastic film is gradually coming to an end, and the demand for plastic film is average, with insufficient order follow-up.

Next week, the maintenance device will resume operation, and there are expectations of an increase in polyethylene supply; The demand in the agricultural film market has weakened, and packaging film is mainly purchased in demand. The market demand is less than expected, and polyethylene analysts from Business Society predict that polyethylene may be adjusted as the main demand.

According to the Commodity Market Analysis System of the Business Society, as of April 19, the average price of epoxy propane enterprises was 9465.00 yuan/ton, a decrease of 0.79% compared to last Thursday (April 13).

The recent market situation of epoxy propane has been stagnant and showing weak performance. Recently, the prices of raw materials such as propylene and liquid chlorine have risen, leading to increased cost support. Last Friday, there was a slight accumulation of inventory on the supply side, but the pressure was controllable. The enthusiasm for downstream procurement was not high, and the market outlook showed weak consolidation. At the beginning of this week, shipments from factories in production were flat, and downstream prices were kept low. The market outlook atmosphere was strong. On the 19th, the mainstream quotation for epoxy propane in the Shandong region was around 9550-9700 yuan/ton.

Upstream propylene, according to the commodity market analysis system of the business community, the price of propylene in Shandong has risen recently. On April 18, the reference price of propylene was 7400.60, up 3.67% from April 1 (7138.60).

The epoxy propane analyst at Business Society believes that the current cost support is average, with stable supply side devices being the main focus, and downstream cautious and low volume follow-up. The market atmosphere is average, and it is expected that the epoxy propane market may wait and see for consolidation and operation in the short term, and more attention needs to be paid to market news guidance.