The ABS market in China remained stable and organized in January, with spot prices of various grades showing small fluctuations. According to the Commodity Market Analysis System of Shengyi Society, as of January 14th, the average price of ABS sample products was 11875 yuan/ton, with a price level increase or decrease of+0.32% compared to the beginning of the month.

Fundamental analysis

Supply level: In January, the operating rate of the ABS industry in China remained stable with a slight decrease, and the industry load level saw a narrow decline of about 1% to 73% compared to the beginning of the month. Mainly due to the decrease in load of the Tianjin Dagu plant. However, the weekly average production within the range is still close to 130000 tons, and the inventory level of aggregated enterprises is close to 170000 tons, both of which are in a high horizontal trend. The overall pattern of abundant supply of goods remains unchanged. Overall, there was no improvement in the supply side’s support for ABS spot prices in mid January.

Cost factor: Recently, the three upstream materials of ABS have shown mixed trends, with overall support for ABS costs being average. The domestic acrylonitrile market has maintained a sideways trend recently. In the early stage, the industry maintained low load operation, and it will take time for supply to return. In addition, the industry’s inventory position is low, and prices are running steadily. But downstream buying sentiment has weakened, and the overall market is adopting a wait-and-see attitude.

Recently, the butadiene market has also remained strong at a high level, and the available supply of goods in the spot market has remained relatively tight. Holders of goods have a strong mentality of raising prices. But with the continuous rise of spot prices in the early stage, the downstream high-level receiving ability gradually declines. At the same time, with the expectation of increased production capacity in the future, it is expected that butadiene may enter a weak consolidation market.

In terms of styrene, it fell in early January, but recently the market has fluctuated and rebounded narrowly. Entering January, it is common for styrene plants to restart, and the tight supply situation has become more relaxed, resulting in a weakened market. However, in recent times, upstream crude oil prices have risen, coupled with low styrene prices and stable downstream demand, resulting in a narrow rebound in prices.

On the demand side: In January, the purchasing power in the middle and lower reaches was weak, and the demand for export of some front-end home appliances in the terminal sector was exhausted. At the same time, as the Lunar New Year holiday approached, terminal factories gradually closed, and the overall load position fell. Downstream enterprises gradually completed stocking. Overall, the demand side provides average market support. However, the extension of the national subsidy policy for household appliances will stimulate the market, and terminal products may continue to receive policy support in the future. There is hope for enterprise inventory digestion, and market confidence is expected to remain stable.

Future forecast

The ABS market in China in January was mainly sorted out. The performance of the upstream three materials is still acceptable, but the comprehensive support for ABS cost side is average. The load of ABS polymerization plant has slightly decreased, with limited changes in the supply side. The demand on the demand side is weak, and the demand on the market is becoming weaker. Business analysts believe that the ABS market may enter a pre holiday period and stabilize.

This week, the phthalic anhydride market has seen a significant increase

According to the Commodity Market Analysis System of Shengyi Society, as of January 13th, the price of phthalic anhydride was 7050 yuan/ton, a significant increase of 6.62% compared to the price of 6612.50 yuan/ton on January 6th; Compared to January 1st, the price of phthalic anhydride increased significantly by 6.82% to 6600 yuan/ton. Stable operation of phthalic anhydride equipment and low inventory of phthalic anhydride; Plasticizer companies are operating at a high level, and there is active demand for phthalic anhydride procurement, which supports the demand for phthalic anhydride. With stocking up before the Spring Festival, the demand for phthalic anhydride briefly increased. The price of ortho benzene has risen significantly, the cost of raw materials has increased, and the driving force for the price increase of phthalic anhydride has increased.

Supply side: Adequate supply of goods

Domestic phthalic anhydride plants operate at low loads, with approximately 60% of phthalic anhydride manufacturers operating at capacity. Phthalic anhydride manufacturers have low inventory levels, resulting in tight supply of phthalic anhydride.

The cost of raw materials such as benzene has increased this week

According to the Commodity Market Analysis System of Shengyi Society, as of January 13th, the price of ortho xylene was 7200 yuan/ton, a significant increase of 7.46% compared to the price of 6700 yuan/ton on January 6th. The price of ortho benzene has significantly increased, and the cost of ortho phthalic anhydride has risen, increasing the driving force for the rise of ortho phthalic anhydride. Industrial naphthalene prices are consolidating strongly, and the cost of naphthalene phthalic anhydride is rising. The overall cost support for phthalic anhydride raw materials has increased.

Demand side: The DOP market has fluctuated and fallen this week

According to the Commodity Market Analysis System of Shengyi Society, as of January 13th, the DOP price was 8401.25 yuan/ton, a fluctuating decrease of 1.32% compared to the DOP price of 8513.75 yuan/ton on January 6th. Plasticizer companies have high profits, and they are actively starting production. The demand for raw material phthalic anhydride is also active, and before the Spring Festival, plasticizer manufacturers will replenish their inventory, which will greatly support the demand for phthalic anhydride.

Future forecast

According to the data analyst of Shengyi Society’s phthalic anhydride products, in terms of cost, the price of ortho xylene has significantly increased, and the price of industrial naphthalene has remained strong and consolidated. The cost of phthalic anhydride has risen, and the driving force for the increase in phthalic anhydride costs has increased; In terms of demand, DOP manufacturers have high operating loads, coupled with stocking up before the Spring Festival, which provides strong support for phthalic anhydride demand. Overall, with cost support and downstream demand, it is expected that the phthalic anhydride market will rise in the future.

According to the Commodity Market Analysis System of Shengyi Society, as of January 10th, the average selling price of PET is 6227 yuan/ton, and the price trend shows an upward trend.

Recently, crude oil and raw materials have risen strongly, and PET cost support has been strong. Against this backdrop of rising costs, PET market prices have continued to rise, coupled with low industry processing fees and strong willingness from factories to raise prices. Today, PET market quotations have risen.

Overall, Business Society believes that the cost side support is strong, and the PET market price may fluctuate at a high level in the short term. The actual trend still needs to pay attention to the follow-up equipment, demand situation, and cost support under the traction of crude oil. Looking ahead, starting from the end of December, with the gradual increase in stocking demand during the Spring Festival, as well as the potential increase in operating rates in the oil and PET sheet industries, domestic demand for PET is expected to see a slight increase.

According to the Commodity Market Analysis System of Shengyi Society, as of January 9, 2025, the reference price of n-butanol in Shandong Province, China is 7216 yuan/ton. Compared with January 5 (reference price of n-butanol is 7100 yuan/ton), the price has increased by 116 yuan/ton, an increase of 1.64%.

This week, the overall n-butanol market in Shandong, China, saw a narrow upward trend, with low-end n-butanol prices rising and the price difference between high and low prices narrowing. As of January 9th, the reference price for n-butanol in the domestic Shandong region is around 7200-7300 yuan/ton, with a price increase of 50-100 yuan/ton within the week.

In terms of supply and demand: Currently, the overall production of n-butanol in the market is relatively stable, with low spot inventory and tight supply in some areas. The supply side provides certain support for the market situation. Downstream users have low inventory of raw materials, and maintain a focus on essential procurement of raw materials.

Market price situation of n-butanol

Region/ Product/ January 9th

Shandong region/ N-butanol/ Around 7200-7300 yuan/ton

North China region/ N-butanol/ Around 7200-7300 yuan/ton

South China region/ N-butanol/ Around 7550-7650 yuan/ton

East China region/ N-butanol/ Around 7300-7350 yuan/ton

Market analysis in the future

At present, the supply of n-butanol is relatively tight, and the mentality of industry players has improved. The downstream market demand for raw materials is relatively stable. The n-butanol data analyst from Shengyi Society believes that in the short term, the n-butanol market in Shandong Province, China, will mainly focus on stable operation, and specific changes in supply and demand information need to be closely monitored.

According to the Commodity Market Analysis System of Shengyi Society, as of December 31, 2024, the reference price of cyclohexanone in the domestic Shandong region was 8800 yuan/ton, a decrease of 660 yuan/ton or 6.88% compared to the reference price of 9450 yuan/ton for n-butanol on January 1, 2024.

From the annual trend chart of the cyclohexanone market, it can be seen that in the first half of the year (January June 2024), the domestic cyclohexanone market in Shandong region showed a fluctuating upward trend, and the market reached its highest point of the year in the middle of the year. In the second half of the year (July December 2024), the cyclohexanone market experienced a high-level decline, and the market price center continued to explore downward until it fell to a low level, and then began to slightly recover in December. However, the sustained warming force was not strong, and the overall decline in the cyclohexanone market came to an end.

Let’s take a look at the specific performance of the cyclohexanone market in 2024:

In the first quarter, the cyclohexanone market operated in a “first up, then down” pattern, with a 2.31% increase in the first quarter.

Market influencing factors: In January and February, the market for cyclohexanone raw material pure benzene rose, and the cost side formed a good support for cyclohexanone. Downstream on-demand procurement, with cost fluctuations, the cyclohexanone market is gradually rising. At the end of February to March, the raw material pure benzene market weakened, providing weaker cost support for cyclohexanone. The market sentiment for cyclohexanone in the market gradually increased, downstream procurement was light, and the focus of the cyclohexanone market declined.

In the second quarter, the domestic cyclohexanone market as a whole showed a steady upward trend. The focus of the cyclohexanone market continues to move upwards, with market prices breaking through the 10000 yuan mark. On June 30th, the cyclohexanone market price reference was 10075 yuan/ton, reaching a new high for the year, with a 4.20% increase in the second quarter. In the first half of the year, the domestic cyclohexanone market fluctuated and rose overall, with a growth rate of 6.61%.

Market influencing factors: In April, downstream demand for cyclohexanone was average, with ample spot supply in the market. High priced shipments were hindered, and supply and demand transmission was slow. However, the support from the raw material cost side strengthened, and the market decline was relatively low under cost support. Market consolidation was the main focus in April.

From May to June, the cyclohexanone market continued to rise and operate, with high volatility in the raw material pure benzene market, putting pressure on cyclohexanone costs. The low prices in the cyclohexanone market decreased, and downstream users concentrated on purchasing, resulting in smooth supply and demand transmission and a continuous upward shift in market focus.

In the third quarter, the cyclohexanone market continued to decline. The support for the cyclohexanone market is insufficient, and the market center continues to decline, falling to the level at the beginning of the year, with a decline of 6.34% in the third quarter.

Market influencing factors: From July to September, the raw material pure benzene market fluctuated and weakened, and the cost side provided loose support for cyclohexanone. The downstream demand for cyclohexanone was average, and high price follow-up was weak. New facilities were put into operation in some areas, and the supply side of cyclohexanone increased, resulting in slow supply and demand transmission. Under negative pressure, the cyclohexanone market price gradually approached a low level. On September 30th, the cyclohexanone market price reference was 9400-9500 yuan/ton.

In the fourth quarter, the decline in the cyclohexanone market did not stop. Negative sentiment continues to suppress the market, and the focus of cyclohexanone negotiations continues to shift downwards. On November 12th, the cyclohexanone market fell to a low point for the whole year, with a reference of 8400 yuan/ton. Compared with the high point of the year, the amplitude reached 16.42%. After reaching a low point, the cyclohexanone market finally experienced a brief low-level rebound, with a slight recovery in market conditions. However, effective support was insufficient. Half a month later, the cyclohexanone market weakened again and ended in a downward trend.

It can be seen that the market trend of cyclohexanone is closely related to the impact of supply, demand, and other aspects. In the first half of 2024, the two upward driving forces of the cyclohexanone market were consistent, both related to the tight supply and demand and cost support. In the second half of 2024, the cyclohexanone market experienced two consecutive downturns due to similar factors, including a significant release of production capacity, increased supply, and weak demand that could not support high prices.

Let’s take a look at how the cyclohexanone market will develop in 2025?

In terms of production capacity: In 2023, China’s cyclohexanone production capacity will be 9.82 million tons. In 2024, new production capacity of cyclohexanone in China will continue to be released, with an annual increase of approximately 1.1 million tons. In 2024, the total production capacity of cyclohexanone in China will reach 10.92 million tons.

Supply side: From the supply side, as a chemical intermediate, cyclohexanone will have additional production capacity of cyclohexanone caprolactam or adipic acid in 2024. Although both are supporting facilities, according to the planning situation, theoretically, the new cyclohexanone production capacity will still be greater than the downstream supporting capacity. Therefore, it is expected that by 2025, the overall supply of cyclohexanone will continue to increase, and the market will inevitably face a situation of oversupply.

In terms of demand: It is expected that the downstream supporting equipment for cyclohexanone, caprolactam, will expand production by 2025, but some of the newly added capacity will be integrated with cyclohexanone production. Therefore, the increase in demand for cyclohexanone downstream outsourcing may narrow, and coupled with the significant expansion of downstream production capacity, the overall capacity growth rate will decrease in the future. Therefore, from the perspective of demand, although the demand for cyclohexanone will increase in 2025, the growth rate of demand will not be as fast as the growth rate of supply. Therefore, the game between supply and demand in the cyclohexanone market will continue in 2025.

Production situation: The annual capacity utilization rate of cyclohexanone in 2023 is 74.6%, with an annual output of approximately 6.4 million tons. In 2024, the production capacity of cyclohexanone was expanded, and the capacity utilization rate increased to 78.8%, an increase of 4 percentage points in capacity utilization rate. As a result, the output also increased. The cyclohexanone production in 2024 was about 7.66 million tons, an increase of 19.6% compared to 2023.

It is expected that the production of cyclohexanone will increase narrowly in 2025, with an overall increase smaller than in 2024. On the one hand, the production capacity of cyclohexanone will continue to be released in 2025, and the expansion of production capacity will drive an increase in market output. However, due to the significant contraction of profit in the cyclohexanone market in 2024, although the production capacity will increase in 2025, under the cost pressure of some factories, the actual capacity utilization rate of cyclohexanone may not have a significant increase. Therefore, it is expected that the production of cyclohexanone will only increase slightly in 2025.

Downstream consumption structure: The overall downstream consumption structure of cyclohexanone in China will not change significantly in 2024. Caprolactam is still the main downstream product of cyclohexanone, accounting for about 64.37% of the demand. The second ranked product is adipic acid, accounting for about 25.87% of the demand. The proportion of other downstream products is relatively limited, with ortho phenylphenol accounting for 5% and paint and ink accounting for 4.39%.

Import volume situation: In 2018, the domestic import volume of cyclohexanone was 69000 tons, which decreased to 93000 tons in 2019. In recent years, with the continuous construction of domestic cyclohexanone facilities and the expansion of production capacity, the dependence on imported cyclohexanone has been decreasing year by year, and the import volume of cyclohexanone has dropped to around 100 tons. From January to November 2024, the import volume of cyclohexanone was only 196 tons. China has basically become a net exporter of cyclohexanone. It is expected that the import volume of cyclohexanone in China will continue to decrease by 2025, and the impact on the market will also be limited.

Export volume situation: From 2018 to 2024, China’s cyclohexanone export volume has basically achieved year-on-year growth. From January to November 2024, China’s cyclohexanone export volume was 73400 tons, an increase of 37.8% compared to last year. It is expected that the export volume of cyclohexanone in China will continue to grow in the coming years. With the stable growth of China’s cyclohexanone production capacity and supply side, the domestic cyclohexanone market is already in a surplus situation. In addition, with the continuous innovation of domestic cyclohexanone production processes, the production cost of cyclohexanone may continue to decrease, making it more cost-effective in the international field. In 2024, Sumitomo Japan has shut down its 100000 ton cyclohexanone plant, and it is expected that the demand for cyclohexanone in some regions of Japan will be imported. Therefore, overall, there may be stable growth expectations for the future export volume of cyclohexanone in China.

summary

Looking back at 2024, the market trend of cyclohexanone is closely related to raw material costs and supply and demand relationships. It is expected that by 2025, the overall spot supply of cyclohexanone market will still be abundant, with supply side pressure remaining, and the trend of raw material costs will be fluctuating at a high level. The operating rate of the downstream main demand caprolactam market will be in the 5th to 6th level in 2024. While increasing production capacity, more attention should be paid to the operating situation of downstream products in 2025. The downstream chemical fiber market is mostly equipped with cyclohexanone equipment, and the solvent market has little demand for cyclohexanone. It is expected that the downstream chemical fiber and solvent fields will still mainly focus on essential procurement. Overall, by 2025, the supply and demand sides of the cyclohexanone market will be mostly in a fluctuating state, with the market operating mainly in a wide range of fluctuations.