According to the Commodity Market Analysis System of Business Society, as of February 28th, the average price quoted by epoxy chloropropane enterprises was 8150.00 yuan/ton, an increase of 0.31% compared to the price on February 1st.

 

The market situation of epichlorohydrin remained stable with minor fluctuations in February. The pre holiday cost support is average, the industry’s capacity utilization rate is low, and the supply side inventory operates without pressure. After the downstream stage replenishment, the enthusiasm for inquiry and procurement decreases. With the approaching holiday and the impact of logistics transportation, the market atmosphere is calm and wait-and-see, and the focus of negotiations on epichlorohydrin is mainly stable. After the holiday, the factory mainly delivers contracts and orders, and the inventory pressure accumulated during the holiday gradually eases. Some enterprises have export orders to support their price boosting mentality, but downstream demand recovery is slow. The attitude of inquiry and procurement is cautious, and small orders with low demand are mainly selected. New orders in the market are generally sold.

 

Upstream propylene, according to the commodity market analysis system of Business Society, the reference price of propylene on February 27th was 6895.75, an increase of 0.77% compared to February 1st (6843.25), providing moderate support for the epichlorohydrin market.

 

According to the commodity market analysis system of Business Society, the reference price for downstream epoxy resin on February 27th was 13333.33, an increase of 1.52% compared to February 1st (13133.33), which provides limited support for the epoxy chloropropane market.

 

Analysts from Business Society believe that the current market is dominated by poor demand, and shippers are under pressure to ship. It is expected that the market for epichlorohydrin may be weak in the short term, and more attention should be paid to market news guidance.

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Recent trends in urea prices

 

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Agricultural demand is gradually starting, and urea prices in Shandong have slightly increased this week. According to the Commodity Analysis System of Business Society, the price of urea in Shandong increased from 2506.67 yuan/ton at the beginning of the week to 2525 yuan/ton over the weekend, an increase of 0.73%, and the weekend price decreased by 9.79% year-on-year.

 

From the supply side 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. The mainstream urea manufacturers in Shandong saw a slight increase in factory prices during the week.

 

From the upstream market perspective, there were ups and downs in the urea upstream market this week: the price of liquefied natural gas plummeted by 7.02%, and the weekend price fell by 41.35% year-on-year. Affected by rainy and snowy weather in some regions of China, market circulation is restricted, terminal demand is released slowly, and the trading atmosphere is poor. The price of liquid ammonia increased by 4.68%, and the weekend price fell by 37.13% year-on-year. However, the prices of anthracite coal have remained low and have stabilized. Over the weekend, the price of Yangquan anthracite coal (washed lump) was 960 yuan/ton, indicating a continued weak trend in the coal market in the short term. Overall, upstream raw material prices fluctuate, providing moderate support for urea prices.

 

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From the perspective of downstream demand: agricultural demand is gradually starting, and industrial demand is following the market. Composite fertilizer, board, and melamine enterprises are operating at a low level, with a focus on procurement for essential needs. This week, the downstream price of melamine in urea has stabilized at a high level, with a price of 7475 yuan/ton. From the perspective of exports: Although there are still bids overseas, the impact of urea export policies on the domestic market is not significant.

 

In the future, the urea market in Shandong may experience a slight fluctuation and increase in late February. Business Society urea analysts believe that the upstream market of urea has significantly declined, and the cost support for urea is insufficient. But downstream industries are mainly in demand, and agricultural demand is gradually starting. In the future, urea may experience a narrow range of fluctuations and mainly rise.

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This week, the domestic titanium tetrachloride market was operating steadily, with an average price of 10950.00 yuan/ton as of February 2, unchanged from the same period last week.

 

The high market price of raw materials and high slag still operates at a high level, resulting in significant cost pressure for production enterprises. Downstream procurement sentiment is insufficient, with a focus on essential procurement. The titanium tetrachloride market remains strong.

 

Business Society’s titanium tetrachloride analyst believes that the titanium tetrachloride market may remain stable in the short term due to high cost support and limited downstream product demand.

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According to monitoring data from Business Society, as of February 4, 2024, the domestic organic silicon DMC market price reference was 15000 yuan/ton. Compared with January 29 (organic silicon DMC reference was 15040 yuan/ton), the price decreased by 40 yuan/ton, a decrease of 0.27%.

 

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From the monitoring chart of Business Society data, it can be seen that this week (1.29-2.4), the overall domestic organic silicon DMC market showed a slight fluctuation and a downward trend. At the beginning of the week, Shandong large factories slightly lowered the shipment price of organic silicon DMC, by about 100 yuan/ton. The price adjustment by large factories broke the high stability and calm situation of the organic silicon DMC market, and the organic silicon DMC market experienced narrow fluctuations. Suppliers may follow the footsteps of large factories or adjust the shipment price of organic silicon DMC narrowly based on their own inventory factors, with an adjustment range of about 100 yuan/ton. As of February 4th, the domestic market price of organic silicon DMC is based on around 14800-15600 yuan/ton.

 

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Prediction of the future trend of organic silicon DMC market

 

As the Spring Festival approaches, logistics in some regions of China have also started to stop shipping and operation. The trading atmosphere in the organic silicon DMC market is gradually quiet, and downstream procurement and stocking have basically ended. The overall market atmosphere is gradually mild and calm. According to the organic silicon DMC data analyst from Shengyishe, in the short term, the domestic organic silicon DMC market will mainly operate steadily, with limited fluctuations in the market. More attention should be paid to changes in supply and demand news.

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According to data monitored by Business Society, as of January 31st, the average price of industrial grade premium cyclohexane in China was 7000 yuan/ton. In January, the cyclohexane market saw a narrow decline, with a decrease of 1.64%, around 100 yuan/ton. Currently, the overall market supply and demand are balanced, and the market negotiation atmosphere is average.

 

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In January, the market price of cyclohexane slightly declined, with mainstream prices around 7000 yuan/ton. The overall price of cyclohexane in January fell by 1.64%, and mainstream manufacturers maintained a price range of around 7000 yuan/ton. The upstream cost side was not supported enough, and downstream demand was limited, with on-demand procurement being the main focus. The overall market transaction atmosphere was cold, with enterprise quotations of 7400 yuan/ton for Jiangsu Runfeng Synthetic Technology Co., Ltd., 6800 yuan/ton for Nantong Runfeng Petrochemical Co., Ltd., and 7500 yuan/ton for Liaocheng Yuanze Chemical Products Co., Ltd.

 

Chemical index: On February 1st, the chemical index was 866 points, a decrease of 1 point from yesterday, a decrease of 38.14% from the highest point in the cycle of 1400 points (2021-10-23), and an increase of 44.82% from the lowest point of 598 points on April 8th, 2020. (Note: The cycle refers to 2011-12-01 present)

 

Business Society’s cyclohexane analyst believes that in the short term, the cyclohexane market is mainly strong, with price fluctuations around 7100-7300 yuan/ton.

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Review of mixed xylene market in 2023

 

In 2023, the mixed xylene market fluctuated widely, with an overall slight increase. According to the bulk list data from Business Society, the benchmark price of mixed xylene in the market was 6970 yuan/ton on December 31, an increase of 3.87% from 6710 yuan/ton at the beginning of the year. The highest point for the year appeared at 8720 yuan/ton on September 19.

 

The international crude oil range fluctuated from January to April, with some support for the cost of mixed xylene; In 2023, four new PX devices were put into operation in China, with a total production capacity of 7.7 million tons all put into operation in the first half of the year. Mixed xylene has shifted from export to domestic use. In addition, the demand for mixed xylene in North America has remained high, providing strong support for mixed xylene. In addition, arbitrage activities between Asia and the United States have led to an increase in external prices, which has also driven up the price of mixed xylene; Taking into account the above factors, the mixed xylene market saw a significant increase from January to April.

 

The continued interest rate hikes by the Federal Reserve and the European Central Bank from April to June have had negative feedback on the economy, leading to a bleak outlook for global demand and an increased risk of economic recession. The price of crude oil has dropped significantly, while the cost of mixed xylene has declined.

 

Against the backdrop of OPEC+continuing to reduce production in July, coupled with the United States entering summer, the driving season is the peak season for refined oil consumption. With the support of tight supply and strong demand in the market, oil prices continue to rise, and the cost of mixed xylene in the market has significantly increased. In addition, the widening interest rate spread between Asia and the United States has led to active exports of mixed xylene, driving it to rise rapidly.

 

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From August to September, with the high price of mixed xylene, downstream resistance increased, and the mixed xylene market stabilized at a high level. At the end of September, as crude oil prices further rose, mixed xylene prices ultimately surged to the highest point of the year.

 

In the fourth quarter, on the one hand, domestic gasoline consumption has entered the off-season, and the demand for blending has also decreased. The overall demand for blended xylene is weak. On the other hand, the high level of the international crude oil market has significantly declined, and the cost center of blended xylene has significantly shifted, resulting in a continuous decline in blended xylene prices.

 

Market Outlook for Mixed Xylene in 2024

 

Cost side: The international crude oil price center expects a slight increase in mixed xylene costs, with support from the cost side

 

The external environment in which crude oil operates in 2024 is still quite complex, with a complex geopolitical situation and constant conflicts. This will have an unpredictable direct impact on oil prices, resulting in even more drastic fluctuations. In the long run, the supply-demand game remains dominant, and on the supply side, OPEC’s production control will continue to play a role in managing oil price expectations. The demand side faces more uncertainty, and an economic slowdown is likely to create a constraint on oil prices. According to the EIA report in December, the EIA lowered its forecast for Brent crude oil prices in 2024 to $83 per barrel, a decrease of $10 per barrel compared to the November forecast. Overall, due to the large number of oil price variables in 2023, oil prices have been operating at low levels for a long time, and the base oil price is not high. It is expected that the average oil price in 2024 may still be slightly higher than in 2023, but due to demand constraints, oil prices will not increase significantly.

 

Supply side: It is expected that the supply side of mixed xylene will continue to increase in 2024

In 2023, there is still a significant demand gap in the domestic mixed xylene market, with both industry supply and demand maintaining a growth trend. However, the growth rate of product supply is slower than downstream, and the structural tension is supporting product prices. In 2023, China’s mixed xylene production capacity and output both maintained a growth trend, but the growth rate decreased compared to previous years. In 2024, there will still be new production capacity for mixed xylene in China, and the tight supply situation is expected to be alleviated to a certain extent. In addition, with more refineries separating mixed xylene in the third quarter of 2023, the production of mixed xylene will significantly increase in 2024.

 

Demand side: Slow growth rate of mixed xylene market demand in 2024

 

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In recent years, downstream PX plants for mixed xylene have been concentrated and put into operation. The total PX production capacity in China for the whole year of 2023 was 43.485 million tons, with an additional domestic production capacity of about 6.2 million tons. The total production is expected to be around 32.1 million tons in 2023, and the external dependence has decreased to 22%. In the next three years, there will still be nearly 10 million tons of newly added production capacity in China, providing strong support for the demand for mixed xylene.

 

The downstream mixing market is the second largest consumer industry for mixed xylene. With the increase in domestic car ownership, the consumption of gasoline has also increased, which has driven an increase in demand for mixed xylene. However, due to the improvement of gasoline quality in China, the proportion of mixed xylene has decreased. In addition, with the continued increase in the proportion of new energy passenger vehicles, the demand for mixed xylene in gasoline mixtures has grown relatively slowly.

 

Market forecast: Business Society’s mixed xylene analyst believes that the international crude oil price is expected to fluctuate slightly higher in 2024, and the cost of mixed xylene still has support. The supply of mixed xylene is expected to increase, and downstream PX production capacity will continue to grow significantly in the future. However, the demand in the mixed blending field will slow down, and overall, downstream mixed xylene will continue to support. Overall, it is expected that the toluene market in 2024 will fluctuate and rise.

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According to the Commodity Market Analysis System of Business Society, the TDI price in East China slightly increased in late January. On January 30th, the average market price in East China was 16900 yuan/ton, an increase of 100 yuan/ton compared to the price of 16800 yuan/ton on January 21st, an increase of 0.60%.

 

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In late January, the domestic TDI market was consolidating and operating, with slight price fluctuations. The filling of spot goods in factories is slow, with suppliers mainly raising prices. The trading market follows the market and actively ships. Many sets of TDI devices in factories have lowered their negative prices, slightly boosting the market. Holders have slightly increased their offers, but downstream purchases are average, and the market trading atmosphere is weak. There have been rumors of a small number of low-priced transactions, and the overall market growth is weak.

 

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The upstream toluene market is relatively strong and rising. On January 30th, the domestic average price of toluene was around 6940 yuan/ton, an increase of 2.06% compared to the price of 6800 yuan/ton on January 21st. The international crude oil prices have fluctuated and risen, with good support from the cost and external prices of toluene. The rebound of toluene prices in Asia has provided some support to the domestic market, while downstream demand has shown weak performance and limited support for toluene. Under the influence of costs, the toluene market has slightly risen.

 

In the future market analysis, TDI data analysts from Business Society believe that the domestic TDI spot filling is slow, factories are mainly supportive of the market, and the trade market mentality is stagnant. Holders are actively shipping, but downstream purchasing enthusiasm is not high, and the rise of suppliers is limited. On the market, there is a strong wait-and-see sentiment. Under the supply-demand game, it is expected that the TDI market will remain stagnant and consolidate in the future. Specific attention will be paid to downstream purchasing situation and the release of market news from suppliers.

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