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.

According to the Commodity Market Analysis System of Shengyi Society, the average price of domestic butadiene market at the beginning of 2024 is 8875 yuan/ton, and the average price at the end of the year is 10800 yuan/ton, with an annual increase of 25.95%. The overall trend of the butadiene market in 2024 will first rise and then fall, basically divided into two stages. In the first half of the year, it will fluctuate upwards, and in the second half, it will fluctuate downwards before rising again.

From the monthly K-bar chart of Shengyi Society, it can be seen that the butadiene market in 2024 will have more ups and downs, with 9 months of upward movement and 3 months of downward movement. The highest increase was 15.37% in June and the highest decrease was 21.1% in November.

Note: The K-bar chart of commodity prices, using the concept of price trend K-line, reflects the weekly or monthly price changes in the form of a bar chart. Investors can make buying and selling investments based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-pillar represents the range of rise and fall.

1、 Review of the Butadiene Market in 2024

First half of the year: Supply shortage increased by 59.77%

In the first half of 2024, the price of butadiene rose strongly, steadily increasing in January and February, fluctuating at a high level in March and April, briefly rebounding in May, and significantly increasing in June, reaching a new high for the year. The main factor driving the market trend throughout the first half of the year was still tight supply. In terms of domestic facilities, due to continuous losses in cracking units, the overall operating rate of cracking units was low in the first half of 2024, and some butadiene units were unplanned to shut down after June, resulting in overall tight supply of butadiene in the first half of 2024. The downstream rubber market on the demand side is generally stable, providing good support for butadiene demand. Overall, driven by tight supply, the butadiene market saw an overall upward trend in the first half of the year.

Second half of the year: Weak demand, down 21.17%

After entering the second half of the year, the butadiene market first fell and then rose from July to September, followed by a wide decline from October to November, and then rose again in December. After entering July, the price of butadiene remained at a high level, and the downstream high receiving capacity was insufficient. The market demand remained lukewarm, which limited the support for market atmosphere and dragged down market quotations. After August, due to the tight supply in the spot market in the northern region, the butadiene market began to recover and rose back to its highest point of the year. After entering October, although there was some demand for replenishing inventory in the post holiday market, which partially boosted the market, the downstream synthetic rubber market weakened, dragging down market purchasing sentiment and lacking demand support. The spot market sentiment was weak, and prices generally declined. After entering November, due to the dual impact of increased supply and weakened demand, the butadiene market rapidly fell, with a monthly decline of over 21%. After entering December, the butadiene market began to recover due to the tightening of market supply and the strengthening of downstream synthetic rubber markets.

2、 Outlook for the Butadiene Market in 2025:

Cost side: The 2025 oil price range is fluctuating, and the cost side support is relatively stable

The International Energy Agency predicts that by 2025, under the premise of maintaining the current level of production policy in OPEC+, global oil supply will show a surplus of over 1 million barrels. Business Society believes that based on the current production capacity and the premise of moderate growth in US crude oil supply in the future, it is expected that the supply-demand balance in 2025 will transition from a tight equilibrium state to a balanced state; In addition, considering that there are currently no more intense conflicts in the geopolitical foundation, as well as factors such as risk premiums, the upward range of oil prices in the future may be suppressed. Therefore, Business Society predicts that the average Brent oil price in 2025 will generally fluctuate within the range of $73-76. The overall cost support for the butadiene market in 2025 is relatively stable.

Supply side: Expected increase

In 2024, China’s butadiene production capacity will be 6.697 million tons per year, an increase of 150000 tons compared to 6.546 million tons in 2023. According to statistical data, China’s butadiene production capacity plan is expected to increase by about 1.2 million tons in 2025. Based on this amount, China’s butadiene production capacity is expected to reach 7.89 million tons per year by 2025. At present, the top three companies in the domestic butadiene industry in terms of production capacity are Zhejiang Petrochemical, CNOOC Shell, and Zhenhai Refining, with production capacities of 700000, 350000, and 325000 tons per year respectively, accounting for 11.36%, 5.68%, and 5.28% of the total production capacity, respectively. With the continuous investment of subsequent production capacity, the domestic supply of butadiene will be alleviated. The market predicts that crude oil prices will continue to fluctuate at a high level in 2025, leaving room for profit growth in refineries and ethylene cracking. Under this influence, it is expected that butadiene production will increase to some extent in 2025, and market supply will gradually ease.

According to customs data statistics, the total import volume from January to November 2024 was 378000 tons, a year-on-year decrease of 0.36%. In November 2024, the import volume of butadiene in China was 69800 tons, a month on month increase of 29.32% and a year-on-year increase of 198.11%. The import volume of nearly 70000 tons in a single month reached a new high since July 2020.

Demand side: Stable with upward trend

In the consumer sector, the core raw material for synthetic rubber is butadiene, and synthetic rubber produced from butadiene accounts for over 80% of the total production of synthetic rubber. Therefore, from the perspective of consumption structure, both butadiene rubber and styrene butadiene rubber account for 30% of butadiene consumption, ABS accounts for 12% of butadiene consumption, latex and SBC account for 9% of butadiene consumption, and nitrile rubber accounts for 5%. By 2025, the newly added production capacity of the four major downstream industries will be around 2.5 million tons, which still provides some support for the butadiene market.

Market forecast:

In the short term, due to the impact of the Spring Festival holiday in January, there is generally a demand for pre holiday stocking in the downstream market. At the end of December, the butadiene market has already experienced a wave of upward trend, boosted by tight supply. Under the influence of downstream demand after January, it is expected that there is still some upward space.

In the long run, a number of new facilities have been put into operation in China since the fourth quarter of 2024, mainly distributed in Shandong, Guangdong, Jilin and other places. Especially in Shandong Province, it is expected that about 500000 tons of new facilities will be put into operation in the future. After entering 25 years, these production capacities will gradually be released, and the tight supply situation in the domestic market will be alleviated to some extent. In terms of demand, downstream synthetic rubber enterprises will also release new production capacity in the future, and there is a good expectation for demand for butadiene. Overall, the shortage of supply in the butadiene market will be alleviated in the future. As a result, there is limited room for further growth in the butadiene market, but downstream demand still has support. It is expected that the butadiene market will continue to maintain a high volatility trend, with a focus on the operation of the downstream synthetic rubber market in the future.

According to the Commodity Market Analysis System of Shengyi Society, from December 30th to January 6th, the domestic butadiene market price increased from 10800 yuan/ton to 11762 yuan/ton, with a price increase of 8.91% during the cycle. This week, the butadiene market continued to rise, and the available supply of goods in the spot market was generally tight. Holders of goods had a strong willingness to raise prices, and the spot market quotation was overall upward. Boosted by this news, spot market offers generally rose. But as prices continue to rise, downstream high-level receiving capacity gradually declines. As the Spring Festival approaches, some pre holiday purchasing demand has been released downstream, driving an improvement in the atmosphere of the spot market. Sinopec has raised prices twice in a row this week, currently at 12000 yuan/ton. As of January 6th, the delivery price to Shandong region is 12100 yuan/ton.

On the cost side: During this cycle, crude oil prices have slightly increased. On the one hand, the OPEC+production reduction agreement has been extended until the end of the first quarter, and some oil producing countries are still implementing compensatory production cuts. This has provided favorable support for crude oil supply, leading to an increase in crude oil market prices. On the other hand, the instability of the situation in the Middle East still exists, which is good news for the international oil market. Overall, the rate of change in crude oil during the cycle remains positive. As of January 3rd, international crude oil futures rose and the settlement price of the main contract of WTI crude oil futures in the United States was $73.96 per barrel. The settlement price of the main Brent crude oil futures contract is $76.51 per barrel.

Supply side: The listed price of butadiene for various sales companies of Sinopec has been lowered multiple times this month, with a price of 10900 yuan/ton as of the 23rd, an increase of 400 yuan/ton compared to the same period last week’s 10500 yuan/ton. The 120000 tons/year butadiene plant of North Huajin has been restarted in October; Fujian United’s 180000 tons/year butadiene plant was shut down for maintenance on October 10th; Jilin Petrochemical’s 190000 ton plant shut down on August 25th and restarted on October 16th. Recently, the comprehensive operating rate of the domestic butadiene industry has not changed much, and the overall supply is relatively stable.

Demand side: According to the commodity market analysis system of Shengyi Society, as of December 31, the price of styrene butadiene rubber in the East China market was 14900 yuan/ton, which was basically the same as the same period last week. Currently, the domestic styrene butadiene rubber plant construction is basically stable, and as of the end of the month, the domestic styrene butadiene rubber construction is around 70%. As of January 6th, the mainstream market price for butadiene styrene rubber in Fushun, Jihua, Yangzi, and Qilu in East China is around 14750-15050 yuan/ton.

Market forecast: In terms of supply, the butadiene market has been tight in the near future, with demand approaching the Spring Festival and downstream intentions to replenish inventory, resulting in good market demand performance. Overall, the performance of the butadiene market is relatively strong, and it is expected that there will still be some upward space in the future.

According to the Commodity Market Analysis System of Shengyi Society, as of January 3rd, the average selling price of PET is 6207 yuan/ton, and the price trend shows an upward trend.

Recently, the rise in international crude oil prices has driven the prices of polyester dual raw materials to rise synchronously. Against the backdrop of rising costs, the PET market prices continue to rise. The new production facility is about to be put into operation, and it is expected that the supply side will increase in the future. As the Spring Festival approaches, the downstream market’s willingness to replenish is not strong, so the subsequent growth of the PET market may be limited.

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. This trend is expected to provide some support for the PET market. Therefore, in the subsequent market trends, we need to closely monitor the direction of peripheral policies and relevant news on the production of new devices. Meanwhile, changes in market demand will also become a key factor affecting the price trend of the PET market.

The phthalic anhydride market stopped falling and consolidated in December

According to the Commodity Market Analysis System of Shengyi Society, as of December 31st, the price of phthalic anhydride in neighboring countries was 6600 yuan/ton, a decrease of 3.65% compared to the price of 6850 yuan/ton on December 1st. Stable operation of phthalic anhydride equipment and sufficient supply 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.

Supply side: Adequate supply of goods

In December, the operating load of domestic phthalic anhydride plants remained stable at a high level, with 70% of phthalic anhydride manufacturers operating at full capacity. The supply of phthalic anhydride from manufacturers was stable, and the supply was sufficient.

The cost of raw materials such as benzene decreased in December

According to the Commodity Market Analysis System of Shengyi Society, as of December 31st, the price of ortho xylene was 6700 yuan/ton, which fluctuated and fell by 2.90% compared to the price of ortho xylene at 6900 yuan/ton on December 1st. In December, the price of ortho phthalic anhydride fell, and the cost of ortho phthalic anhydride decreased, increasing the downward pressure on ortho phthalic anhydride. The weak adjustment of industrial naphthalene prices has led to a decrease in the cost of naphthalene phthalic anhydride. There is significant downward pressure on the overall cost of phthalic anhydride raw materials and the price of phthalic anhydride.

Demand side: The DOP market fluctuated and fell in December

According to the Commodity Market Analysis System of Shengyi Society, as of December 31st, the DOP price was 8226.25 yuan/ton, a fluctuating decrease of 8.99% compared to the DOP price of 9038.75 yuan/ton on December 1st. The price of raw materials has fallen, the cost of plasticizers has decreased, and the downward trend of DOP is slower than that of isooctanol. The profit of plasticizer DOP is high, and the enthusiasm of plasticizer enterprises to start production is high. The operating rate of plasticizers is high, and the supply of plasticizers is sufficient. The demand support for phthalic anhydride still exists, the inventory of phthalic anhydride manufacturers is low, and the situation of new orders is average. The upward support for phthalic anhydride still exists.

Future forecast

According to the data analyst of Shengyi Society’s phthalic anhydride products, in terms of cost, the price of ortho xylene has fallen, the price of industrial naphthalene is weakly consolidating, the cost of phthalic anhydride has decreased, and there is significant pressure for the cost of phthalic anhydride to decline; In terms of demand, the operating load of DOP manufacturers remains stable at a high level, while the demand support for phthalic anhydride still exists. Overall, there is significant downward pressure on costs, supported by downstream demand, and it is expected that the phthalic anhydride market will remain weak and consolidate in the future.