Narrow decline in the aggregated MDI market

According to the Commodity Market Analysis System of Shengyishe, from March 1st to 8th, the domestic aggregated MDI market price fell from 17050 yuan/ton to 17000 yuan/ton, with a price drop of 0.29% during the cycle, a month on month increase of 2.82%, and a year-on-year increase of 0.59%. The domestic aggregated MDI market is weak and declining, with limited trading atmosphere and strong trading sentiment among traders. Overall, the intention to negotiate is maintained, and market prices are falling, with relatively insufficient support.

 

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The supply side is affected by favorable factors such as reduced supply from production enterprises.

 

On the cost side, raw material pure benzene: Domestic pure benzene prices fluctuate and fall after opening up high. Imported goods on board remain at a low level, with an increase in downstream maintenance facilities and a decrease in demand. Port inventory has slightly accumulated. As of March 8th, the benchmark price of pure benzene in Shengyishe is 8262.17 yuan/ton. Raw material aniline: The domestic price of aniline first fell and then stabilized, while the price of raw material pure benzene fell, weakening cost support. In the early stage, due to the high pressure from the aniline factory and poor factory shipments, the price of aniline decreased. In the later stage, downstream demand improved but fell short of expectations, and the price of aniline stabilized horizontally. As of March 8th, the benchmark price of aniline in Shengyishe is 11000.00 yuan/ton. The cost side of MDI aggregation is influenced by bearish factors.

 

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On the demand side, downstream demand is gradually recovering, and overall consumption power has improved. However, the current high price buying is still average, and further improvement and follow-up are needed. Waiting for the pipeline and sheet industry to start one after another, the market is slowly pushing forward. The short-term aggregate MDI demand side is temporarily affected by favorable factors.

 

In the future market forecast, as the supply of goods stabilizes and the quantity of goods is abundant, downstream follow-up will continue to be slow, and buying will be weak. Business Society’s MDI analyst predicts that the domestic MDI market consolidation will be the main focus.

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Cost and demand support for a significant upward trend in the trichloromethane market

Since 2024, the domestic market for trichloromethane has seen a significant increase. According to the Commodity Market Analysis System of Business Society, as of March 5th, the price of trichloromethane bulk water in Shandong Province was 2666 yuan/ton, an increase of 28.82% from the beginning of the year’s 2070 yuan/ton.

 

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The significant increase in the market for trichloromethane is mainly reflected in two stages before and after the Lunar New Year: mid to late January before the Spring Festival, and downstream is the peak season for winter storage and stocking after the holiday. There is a wave of purchases of trichloromethane, which drives up the price of trichloromethane; Since late February after the holiday, with the gradual increase in downstream refrigerant production and the low inventory of trichloromethane, the price of trichloromethane has risen again.

 

Since 2024, the domestic methane chloride production has fluctuated narrowly, with around 70% of domestic methane chloride production as of the end of February.

 

Since 2024, the prices of raw materials methanol and liquid chlorine have fluctuated and risen, supported by the cost of trichloromethane. According to the commodity market analysis system of Shengyishe, as of March 5th, the spot price of methanol was 2691 yuan/ton, an increase of 9.86% from 2450 yuan/ton at the beginning of the month; In January, the price of liquid chlorine tankers in Shandong region ranged from 100 to 300 yuan/ton. During the Spring Festival, the price dropped to 1 yuan/ton. As of March 5th, the price of liquid chlorine tankers in Shandong region was 400 yuan/ton, which is generally at a high level compared to the previous period.

 

The refrigerant market has rapidly rebounded after the holiday, with a significant increase in the production volume of air conditioning enterprises in March. It is expected that the production volume will be around 20-22 million units. In addition, the increase in export demand orders will provide strong support for the refrigerant market. In addition, due to the increase in HFC prices and another reduction in HCFC quotas next year, the R22 market will see a surge. After the holiday, the prices of refrigerants have risen and production has increased, providing strong support for demand in the face of trichloromethane.

 

Business Society methane chloride data analysts believe that the rising raw material prices have provided strong support for the cost of trichloromethane; The downstream refrigerant industry is still in the peak season of production, and the demand for trichloromethane will continue to support in the short term. Overall, the trichloromethane market will continue to maintain a high and strong trend in the short term.

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Downstream demand slows down, ethyl acrylate market is weak

Last week (2.27-3.5), ethyl acrylate experienced a downward trend. The ethylene raw material market is stable and declining, with weak cost support. It is difficult for factories to make concessions, and the terminal still maintains a wait-and-see attitude. The negotiation for acrylic acid is about 5950 yuan/ton, with a starting load of 70.73%. As of March 5th, the benchmark price of ethyl acrylate in Shengyishe was 9505 yuan/ton, a decrease of -5.89% compared to last Monday (10100 yuan/ton).

 

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At present, the new transaction volume of ethyl acrylate market is relatively low, and terminal demand continues to be weak. Most ethyl acrylate enterprises produce according to orders, while downstream enterprises mostly purchase according to demand. The market has a high wait-and-see attitude, and the trading atmosphere is relatively cold. The raw material market situation is average, and actual orders need to be followed up. We need to pay attention to the market demand sentiment in the future. Analysts from Business Society predict that the market quotation for ethyl acrylate will remain stable next week, with a price range of 9400-9600 yuan/ton.

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The industrial chain has declined, and the crude benzene market has followed suit (February 26th to March 4th)

According to the Commodity Market Analysis System of Shengyi Society, the auction price of crude benzene during the period from February 26 to March 4, 2024 has decreased by 5.62%, from 7201.25 yuan/ton last week to 6796.25 yuan/ton this week.

 

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In terms of crude oil: Currently, there is still a long short game in the crude oil market, and in the short term, crude oil will still be affected by the geopolitical situation, and the price will remain relatively rigid. On March 1st, international crude oil futures rose. The settlement price of the main WTI crude oil futures contract in the United States was $79.97 per barrel, up $1.71 or 2.2%. The settlement price of the Brent crude oil futures main contract was $83.55 per barrel, up $1.64 or 2.0%.

 

On March 1, 2024, Sinopec lowered the listed price of pure benzene by 200 yuan/ton, and currently implements a price of 8350 yuan/ton.

 

Other companies: Jingbo Petrochemical quoted 8300 yuan/ton, HSBC Petrochemical quoted 8350 yuan/ton, Weilian Chemical quoted 8003 yuan/ton, Xinhai Petrochemical quoted 8300 yuan/ton, and Hongrun Petrochemical quoted 8350 yuan/ton.

 

According to the commodity market analysis system of Business Society, the price of pure benzene has slightly decreased this week. On February 26th, the price of pure benzene was 8717 yuan/ton, and on Friday (March 1st), the price of pure benzene was 8483 yuan/ton, a decrease of 2.68% from last week and an increase of 19.42% from the same period last year.

 

K-bar chart of commodity prices, using the concept of price trend K-line, reflects the weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations. The weekly K-bar chart of pure benzene shows that the pure benzene market has seen more ups and downs in recent times.

 

In terms of the industrial chain, pure benzene and crude oil rose first and then fell after the holiday. In this cycle, confidence in the spot market declined due to downstream maintenance news, and the domestic pure benzene market continued to decline. The latest quotation for hydrogenated benzene this week fell to 8300 yuan/ton, a decrease of 400 yuan/ton from last week. The external market of pure benzene continues to decline, and Sinopec has lowered its listed price of pure benzene three times this week. As of now, it has executed a price reduction of 8350 yuan/ton, with a cumulative decrease of 500 yuan/ton.

 

In terms of supply, the fourth round of decline in the coke market after the holiday has quickly landed, with a cumulative decrease of 400-440 yuan/ton. Coking companies have generally incurred losses, and currently, active production restriction enterprises continue to increase, with operating rates dropping to around 68%. Crude benzene production has significantly declined, and supply is tight. In terms of demand, the operating rate of downstream hydrogenated benzene enterprises has not changed much, and currently there is not much change in demand. The positive supply and demand side still exists, but news of reduced production and maintenance of some downstream units of hydrogenated benzene and pure benzene has been reported, resulting in poor performance of terminal demand and dragging down market sentiment. Overall, the decline in downstream demand is dragging down market sentiment, and it is expected that the pure benzene industry chain will continue to operate weakly in the short term. However, there will be positive factors emerging from the macro perspective in the near future, and it is expected that the market will continue to have limited downward space, with stable, moderate, and weak operations as the main focus.

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The price of pure benzene has slightly decreased this week (2023.2.26-3.1)

1、 Price trend

 

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According to the commodity market analysis system of Business Society, the price of pure benzene has slightly decreased this week. On February 26th, the price of pure benzene was 8717 yuan/ton, and on Friday (March 1st), the price of pure benzene was 8483 yuan/ton, a decrease of 2.68% from last week and an increase of 19.42% from the same period last year.

 

2、 Analysis and Review

 

This week, the price of Sinopec pure benzene was 8550 yuan/ton (prices in Shandong and Hebei regions have dropped by 300 yuan/ton simultaneously)

 

Downstream aspect

 

3、 Future Market Forecast

 

Night trading of pure benzene was discussed at 8350-8400 yuan/ton, and it is expected that pure benzene in East China will fluctuate and consolidate in the morning.

 

Crude oil: Market concerns about demand prospects continue, and there has been no significant improvement in the global economy, leading to a decline in international oil prices. NYMEX crude oil futures 04 contract 78.26 fell 0.28 US dollars per barrel, or 0.36%; ICE oil futures 04 contract 83.62 fell 0.06 US dollars per barrel, or 0.07%. The main contract of China INE crude oil futures, 2404, rose 3.6 to 609.1 yuan/barrel, and fell 3.2 to 605.9 yuan/barrel in overnight trading.

 

Core logic: Yesterday, the price of pure benzene was weakly consolidated, and the trading atmosphere was average. The market atmosphere is stagnant, and both buyers and sellers have a clear wait-and-see attitude. Shandong has been experiencing consecutive days of poor shipments, putting pressure on some refineries’ inventory and causing prices to continue to decline. After the price drop, the follow-up of buying gas is average, with a focus on just needs.

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This week, gold prices rose by 0.36% and silver prices fell by 0.66%

Summary of Precious Metal Prices in February

 

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According to the Commodity Market Analysis System of Business Society, as of February 29, 2024, the spot market price of gold was 480.84 yuan/gram, a decrease of 0.25% from the pre holiday (February 8) gold spot market price of 482.04 yuan/gram. However, this week, the gold price began to slightly recover, rising by 0.36% in the past four days.

 

According to the Commodity Market Analysis System of Business Society, the average price of silver in the market on February 29, 2024 was 5861.33 yuan/kg, an increase of 1.11% compared to the average price of silver in the market before the holiday (February 8), which was 5797 yuan/kg. However, silver prices continued to decline this week, falling by 0.66% in the past four days.

 

From November 2022 to early February 2023, precious metal prices significantly increased. From March to the end of April, due to the impact of the US banking crisis, precious metal prices once again entered a period of skyrocketing. Silver prices began to fall in May, while gold remained relatively strong. In June, gold prices hit a high level and silver prices began to rise. After July, gold prices became stronger. In mid to late September, precious metal prices were affected by news from the Federal Reserve, leading to a high level correction. In October, due to geopolitical factors, the risk aversion sentiment rose and continued to rise. In early November, the high range was weak and fluctuated horizontally. At the end of the month, precious metal prices resumed, and silver saw a stronger monthly increase than gold. Silver prices slightly declined in December, while gold prices remained relatively strong. From January to February 2024, precious metal gold and silver fluctuated horizontally at high levels.

 

Macro data

 

On the overseas US side, the US GDP data for the fourth quarter unexpectedly revised downwards, and the US economy fell short of expectations. Market expectations for the magnitude of the Federal Reserve’s interest rate cut continue to weaken.

 

Federal Reserve Director Bauman stated that the time point for starting interest rate cuts has not yet been reached; The latest inflation data indicates a slowdown in inflation progress; Strong economic activity and consumer spending, coupled with a tight labor market; If inflation stagnates or reverses, still willing to raise policy interest rates; Premature reduction of policy interest rates may lead to the need for future interest rate hikes; If inflation continues to reach the 2% target, the ultimate interest rate cut will be appropriate.

 

Kansas Federal Reserve Chairman Jeffrey Schmid stated that there is no need to adjust policy stance in advance. In terms of interest rate cuts, patience should be maintained to continue observing the economy’s response to previous tightening policies and to seek conclusive evidence that inflation is being controlled.

 

In addition, the draft G20 Finance Ministers’ Communique shows that G20 finance ministers believe that the possibility of a soft landing for the global economy is increasing, and that a faster than expected decline in inflation is one of the risks.

 

The market still maintains the expectation of the Federal Reserve lowering interest rates for the first time in June, but the Federal Reserve’s swap rate shows that the Federal Reserve may only cut interest rates by 75 basis points in 2024.

On the domestic side, the central bank has lowered the benchmark loan interest rate LPR again after eight months. The People’s Bank of China authorizes the National Interbank Funding Center to announce that on February 20, 2024, the loan market quoted interest rate (LPR) is 3.45% for 1-year LPR and 3.95% for 5-year and above LPR. The former remained unchanged compared to the previous period, while the latter decreased by 25 basis points compared to the previous period. Lowering the medium – and long-term LPR benchmark interest rate will help reduce the pressure on residents to purchase properties and repay existing housing loans, which is conducive to further promoting investment and consumption.

 

Future Market Forecast

 

The dominant tone of precious metals remains unchanged. The Federal Reserve’s interest rate hike cycle is gradually coming to an end and entering a rate cut cycle, which logically favors interest free assets such as precious metals. Although the expectation of immediate interest rate cuts in the short term has weakened, the direction of the cycle remains unchanged. Short term precious metals continue to be affected by inflation data, and long-term support from expected interest rate cuts is still expected. It is expected that in the short term, the price of precious metals will remain high and there is a high probability of horizontal fluctuations.

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The stable market situation of ammonium nitrate in February is the main focus

According to the commodity market analysis system of Shengyishe, the domestic ammonium nitrate market price trend remained stable in February. As of the end of the month, the market price of ammonium nitrate was 4060 yuan/ton, which was the same as the price of 4060 yuan/ton at the beginning of the month, and the year-on-year price decreased by 6.45%.

 

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In February, the domestic ammonium nitrate market was mainly stable in price, with stable operation of domestic ammonium nitrate manufacturers. Recently, the supply of goods on site has been normal, and the sales situation is average. Downstream demand is normal, and the price trend of ammonium nitrate market is temporarily stable. Recently, the shipping market of ammonium nitrate manufacturers has been normal, and downstream purchases are on demand. Recently, downstream purchases of nitro compound fertilizers have been average, and domestic purchases in the downstream civil explosive industry have been average. Domestic ammonium nitrate manufacturers are operating normally, and the market price of ammonium nitrate is mainly stable. As of now, the mainstream negotiation prices in Shaanxi region are 5500-5600 yuan/ton, Shandong region is 3800-4000 yuan/ton, and Hebei region is 3800-3900 yuan/ton.

 

The price trend of concentrated nitric acid in China declined in February, with an average price of 1916.67 yuan/ton as of the end of the month, a 4.17% decrease from the price of 2000 yuan/ton at the beginning of the month. Mainstream enterprises in East China offer a price range of 1900-2000 yuan/ton, while those in the North and Central China offer a price range of 1800-2000 yuan/ton. At present, there is not much change in the supply side of the concentrated nitric acid market. The supply of concentrated nitric acid is normal, and the market mainly relies on orders. The market transaction situation is not good, and industry insiders are mostly wait-and-see. The price of nitric acid in the market has slightly decreased, and the price trend of ammonium nitrate in the market is stable.

 

The domestic liquid ammonia market price trend declined in February, with a price of 2960 yuan/ton as of the end of the month, a decrease of 8.55% from the initial price of 3236.67 yuan/ton. The liquid ammonia price trend declined in February. The amount of ammonia released in the main production areas in the north has not changed much, and some units in Shandong have started operating steadily. The market has shown sufficient supply, and prices of large factories in Shandong and surrounding Hebei have generally declined. In addition, downstream procurement enthusiasm is poor, and there is a sharp supply-demand contradiction. Some manufacturers have lowered their factory prices. Currently, the mainstream quotation in Shandong is between 2900-3000 yuan/ton, and the fluctuation of ammonium nitrate prices is not significant due to this impact.

 

Recently, the downstream purchase order situation has been average, coupled with a downward trend in the market price of raw material nitric acid. However, there is an upward trend in the price of liquid ammonia, which is influenced by both long and short factors. The ammonium nitrate analyst at Business Society believes that the market price of ammonium nitrate may stabilize in the future.

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Supplier support&cost boost: PC stabilized first and then rose in February

Price trend

 

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According to the bulk list data from Business Society, the domestic PC market stabilized first and then rose in February, with most spot prices of brand names concentrated in the post holiday period. As of February 27th, the mixed benchmark price of Shengyishe PC is around 16133.330 yuan/ton, with a+1.89% increase or decrease compared to the beginning of the month.

 

Cause analysis

 

In terms of raw materials, it can be seen from the above chart that the market price of bisphenol A has gradually increased this month. In the early stage, there were many restart devices for bisphenol A, and there were also new devices put into operation, which put pressure on the supply side. With the continuous increase of raw materials such as pure benzene and phenol, the cost support for PC has been strengthened. But the downstream stocking intensity is average, and it will shift to consolidating the market at the end of the month. Bisphenol A has a stronger overall support for PC in February.

 

In terms of supply: In February, the overall operating rate of domestic PC increased, and the industry average operating rate increased from 72% at the beginning of the month to around 84%. Enterprise production capacity returns and supply increases. However, due to the excessive delivery of pre-sale contracts before the holiday, the pressure on on-site shipment of goods is not high. The factory price often increases after the price increase, which provides sufficient support for spot prices.

 

In terms of demand: During the Spring Festival, PC consumption will continue to follow the previous rigid demand pattern, with a focus on digesting inventory. Downstream enterprises returning after the holiday are lagging behind in resuming work, and there is poor demand for on-site stocking. In addition, buyers have some resistance to PC sources with rising prices, and the demand side generally supports spot prices.

 

Future Market Forecast

 

The PC market saw a positive increase in February. After the strengthening of the upstream bisphenol A market, the consolidation has increased the support for PC costs. The load of domestic polymerization plants has significantly increased, and the market has abundant spot supply, but there is no significant accumulation of inventory, and the supply pressure is still acceptable. The confidence of traders is supported by suppliers, and their offers are actively high. The demand side is expanding slowly after the holiday, and the increase in PC prices is limited. It is expected that the PC market in the future may form a stalemate pattern.

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Domestic calcium carbide continued to decline in February and has bottomed out

After the holiday, accompanied by rainy and snowy weather in most northern regions, logistics continued to be hindered, leading to a significant increase in enterprise inventory. Many enterprises have reduced their operating rates to alleviate the pressure of losses, while downstream enterprises have encountered insufficient replenishment. Starting this week, transportation has gradually eased, factory inventory has decreased significantly, terminals have arrived one after another, and market transactions have heated up. However, overall market prices are still not optimistic. Since February, the market has continued to decline, with the price of Northwest calcium carbide monitored by Business Society dropping to 2900 yuan/ton, a decrease of 3.33%. It is understood that the mainstream price in the Wuhai area has dropped to 2700-2750 yuan/ton.

 

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From the supply side perspective, production enterprises had high inventory before and after the Spring Festival. In order to actively ship goods, many enterprises provided subsidies and discounts, leading to a slight decline in the market. In the middle and late stages, logistics were hindered by the Spring Festival holiday and post holiday rainy and snowy weather, leading to further increase in enterprise inventory. Factories were forced to reduce production burden, leading to a shortage of raw materials near the end of the month. With the gradual arrival of goods, the supply side inventory pressure has decreased, and it is expected that the operating rate of enterprises may slightly increase.

 

From the demand side, due to the delayed arrival of calcium carbide, enterprises have been passively reducing their burden and have gradually recovered in the near future. It is expected that there will be fewer maintenance plans for the downstream PVC industry in March, and the overall demand will be relatively stable. The demand for calcium carbide will increase in the later stage.

 

In the future, the calcium carbide market has bottomed out. Considering that enterprise inventories are still at a medium to high level and prices remain relatively stable, as the speed of outbound shipments increases and downstream demand gradually improves, the calcium carbide market is steadily improving.

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Shandong styrene market price fluctuates slightly

According to the commodity market analysis system of Business Society, the mainstream price of styrene in Shandong has fluctuated slightly recently. This week, the average price of styrene in Shandong was 8750.00 yuan/ton, with a month on month increase of 5.42%. The price has increased by 2.34% compared to the same period last year.

 

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styrene

 

Recently, the market price of styrene has risen. From the above chart, it can be seen that the price of styrene has been mainly fluctuating and consolidating in the past three months, with slight fluctuations in the market this week. International oil prices continue to decline, with poor cost support. As the Spring Festival approaches, the supply of styrene increases while spot demand weakens. The spot transactions in the styrene market are flat, with slight fluctuations in the market.

 

In terms of raw materials, the price of pure benzene has slightly increased this week, with Sinopec’s pure benzene price at 8300 yuan/ton (prices in Shandong and Hebei regions have increased by 450 yuan/ton simultaneously). The price of pure benzene in East China continues to rise significantly, and downstream buying is still acceptable, with a positive transaction atmosphere. Some refineries in Shandong have a weak willingness to hold goods, resulting in a slight decline in their offers. Some businesses are bullish and actively buy, driving higher trading volume within the day.

 

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On the downstream side, the prices of styrene in the three major downstream markets have fluctuated. At the beginning of this week, the average price of PS was 9633 yuan/ton, and over the weekend, the average price of PS was 9633 yuan/ton. The price remained stable and decreased by 1.03% compared to the same period last year. PS (Polystyrene) petrochemical manufacturers have gradually stopped reporting, and cost support is still acceptable. Some merchants have withdrawn from the market and are observing, resulting in a weak market atmosphere.

 

This week’s EPS market has fluctuated and stabilized, with an average price of 10171 yuan/ton for ordinary materials over the weekend. EPS is affected by the upstream pull up, and the market atmosphere has slightly improved. It is expected that the domestic EPS market may experience a narrow range of fluctuations.

 

Recently, the domestic ABS market has been consolidating. The number of market participants has decreased, and ABS may gradually have a price but no market. It is expected that the market will consolidate and operate horizontally in the short term.

 

International oil prices continue to decline, with poor cost support. As the Spring Festival approaches, the supply of styrene increases while spot demand weakens. It is expected that the short-term volatility of the styrene market will be mainly downward.

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