According to the Commodity Market Analysis System of the Business Society, the PP market continued to fluctuate this week, with overall reductions in various wire drawing brands. As of May 12th, the mainstream quoted price of T30S (wire drawing) by domestic producers and traders is around 7357.14 yuan/ton, with a decrease of -4.54% compared to the average price level at the beginning of the month.

Cause analysis

Industry chain: On the upstream side, the recent decline in the propylene market in Shandong has been significant. In the past half month, downstream equipment has been operating at a low level, and procurement volume is limited. Propylene enterprises are facing increasing export pressure, making profits and selling goods. In addition, due to the recent weakness of crude oil and multiple bearish pressures, the price of propylene has fallen significantly. There is a strong wait-and-see atmosphere in the market, with buying up rather than buying down. It is expected that the Shandong propylene market will mainly operate in a weak position.

The significant decline in propylene prices has led to a decrease in cost support for PP. In terms of industry load, the overall industry load this week was around 75%, and overall shipments remained stable. The on-site supply of goods is sufficient, and inventory pressure has increased. In terms of demand, the downstream plastic weaving production of the main force has slightly declined, while the production rate of film materials enterprises has decreased significantly. The stocking situation of terminal enterprises is poor, and procurement is mainly maintained for production.

In terms of fiber materials, according to the Commodity Market Analysis System of Business Society, as of May 12th, the spot price of domestic fiber PP has declined. The mainstream quoted price of domestic producers and traders for Z30S (fiber) is around 7462.50 yuan/ton, with an increase or decrease of -3.08% compared to the average price at the beginning of the month, and a decrease of 16.62% compared to the same period last year. This week, the low load adjustment pattern of downstream non-woven fabric enterprises, the main force of PP fiber material, continued, with an overall operating rate of around 30%. The current weak demand for fiber materials on the site is dragging down the digestion speed of non-woven end products, and the enterprise’s efforts to replenish fiber PP are lagging behind. In addition, the upstream bearish situation is expected to remain weak and stable in the short term.

In terms of melt blown materials, this week’s melt blown PP market fluctuated. As of May 12th, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of the Business Society is about 8225 yuan/ton. Compared with the average price level at the beginning of the month, the price has increased or decreased by -0.30%, with a year-on-year decrease of 18.56%. At present, the domestic health situation is stabilizing, and social consumption is becoming increasingly weak in driving medical meltblown fabric materials. The overseas demand has also not shown significant support, and traders have given up on orders, indicating that the melt blown material market may maintain a weak consolidation trend.

Future Market Forecast

PP analysts from Business Society believe that the polypropylene market has recently declined. The raw material propylene market has declined significantly, and the support from the cost side for the market is not good. Terminal enterprises tend to maintain production while receiving goods, with weak demand release. The market is biased towards bearish guidance, and it is expected that the PP market may maintain a weak consolidation trend in the short term.

According to the Commodity Market Analysis System of the Business Society, as of May 11th, the average price quoted by domestic industrial grade 85% formic acid enterprises was 3875.00 yuan/ton, which is unchanged compared to Monday’s price.

Recently, there has been no significant fluctuation in the domestic industrial grade 85% formic acid market, and enterprise quotations have generally remained stable. In the near future, the raw material sulfuric acid market is mainly stable, and the raw material methanol market is weak, with little impact on the cost. The normal shipment of enterprises is mainly, the downstream inquiry procurement continues to be just needed, and the price center of formic acid market is stable.

Upstream product: Upstream sulfuric acid. According to the Commodity Market Analysis System of Business Society, the reference price for sulfuric acid was 210.00 on May 10th, a decrease of 3.82% compared to May 1st (218.33); Upstream methanol, according to the Commodity Market Analysis System of Business Society, the reference price for methanol on May 11th was 2360.00, a decrease of 2.61% compared to May 1st (2423.33).

Business Society formic acid analysts believe that currently, upstream sulfuric acid and methanol prices are operating weakly, with slightly weaker cost support. Market transactions are mainly based on demand, and enterprise quotations follow the market. It is expected that the domestic industrial grade 85% formic acid market may remain stable in the short term, and more attention needs to be paid to changes in raw material prices.

1、 Price trend

According to the commodity analysis system of the business agency, the domestic isobutyraldehyde market price rose sharply this week. This week, the average price of domestic isobutyraldehyde mainstream market rose from 7433.33 yuan/ton at the beginning of the week to 9516.67 yuan/ton at the end of the week, up 28.03%. Weekend prices fell by 37.25% year-on-year. On May 8th, the isobutyraldehyde commodity index was 52.79, an increase of 4.48 points from yesterday, a decrease of 50.00% from the cycle’s highest point of 105.58 points (2021-09-16), and an increase of 75.27% from the lowest point of 30.12 points on October 7th, 2022. (Note: The cycle refers to the period from September 1st, 2021 to present)

2、 Market analysis

From the supply side perspective, mainstream manufacturers of isobutyraldehyde have seen a significant increase in their quotations this week, resulting in low inventory. Some manufacturers have shut down for maintenance, resulting in tight supply.

From the perspective of the upstream and downstream industrial chains, the propylene market in the upstream raw material market of isobutyraldehyde has slightly declined this week, with prices dropping from 7052.60 yuan/ton at the beginning of the week to 6962.60 yuan/ton at the weekend, a decrease of 1.28%. Weekend prices fell by 20.89% year-on-year. The price of upstream raw material market fell slightly, and the cost support was insufficient. Affected by the supply and demand side, the price of isobutyraldehyde was negatively affected. From the perspective of the downstream industry chain, the market price of neopentyl glycol fell slightly, and the market price rose from 10266.67 yuan/ton at the beginning of the week to 10766.67 yuan/ton at the end of the week, up 4.87%. The market situation of neopentyl glycol has slightly increased, and downstream demand has increased, which has a positive impact on isobutyraldehyde.

3、 Future prospects

The market trend of isobutyraldehyde in mid to early May may be mainly fluctuating and rising. The upstream propylene market has slightly declined, with insufficient cost support. The downstream market for neopentyl glycol has slightly increased, and downstream procurement enthusiasm has increased. Some manufacturers have shut down for maintenance, resulting in a tight circulation of isobutyraldehyde. Business Society isobutyraldehyde analysts believe that in the short term, the isobutyraldehyde market may experience slight fluctuations and gains due to various factors such as supply and demand and raw materials.

According to the Commodity Market Analysis System of the Business Society, the industrial grade first class potassium nitrate in Shanxi was reported at 5475 yuan/ton at the beginning of the week, while the industrial grade first class potassium nitrate in Shanxi was reported at 5425 yuan/ton at the end of the week, a decrease of 0.91%, a month on month decrease of 3.98%, and the current price has decreased by 24.48% compared to last year.

potassium nitrate

This week, the domestic potassium nitrate market fluctuated and fell. From the above chart, it can be seen that the recent potassium nitrate market has fluctuated slightly, and the market has continued to decline this week. Domestic potassium manufacturers have sufficient supply, with a slight increase in border trade sources. The arrival of goods is mainly concentrated in Lianyun Port, resulting in a decrease in prices. The potassium nitrate market has been trading coldly and the market has continued to decline. According to statistics from Business Society, mainstream domestic manufacturers of potassium nitrate quoted 5200-5700 yuan/ton this week (for reference only), and the prices vary depending on the procurement situation.

Recently, the prices of mainstream domestic potassium chloride manufacturers have fluctuated and fallen: on May 6th, the distribution price of potassium chloride by Anhui Badou Chemical Co., Ltd. was around 3300 yuan/ton, and the prices have remained stable temporarily. The actual transaction price is mainly negotiated. During the May Day holiday, the potassium fertilizer market did not have strong transactions. After the holiday, the market is currently dominated by bearish conditions, with low demand and abundant supply of potassium fertilizer, resulting in oversupply.

Recently, the domestic potassium fertilizer market has entered a low season with high inventory, and downstream purchases remain in demand. It is expected that the price of potassium carbonate will mainly decline in the short term, while the long-term market still needs to wait and see.

In mid to early April, the epoxy resin market continued to be sluggish, and towards the end of the month, due to the impact of rising raw materials, the epoxy resin market broke through and rose. At the end of the month, the mainstream negotiated price in East China was 14200-14500 yuan/ton of purified water for delivery, and the negotiated price in Mount Huangshan solid epoxy resin market was 13600-14000 yuan/ton. The final week will see an increase of around 500 yuan/ton.

In April, the dual raw materials increased in temperature, with strong cost support. The market for raw material bisphenol A has shown a significant upward trend. Prior to the holiday, due to tight supply and tight spot resources, the market quotation quickly exceeded 10000 yuan. At the end of the month, the negotiated price of bisphenol A in the market was 10050 yuan/ton, ranking among the top in the chemical industry’s rise and fall list. Holders have little intention of selling without pressure, but the downstream procurement pace has slowed down after the price rose to 10000 yuan. With the approaching holiday, the main demand for follow-up on actual orders on the market is limited, with fewer large orders. However, the upward trend of the bisphenol A market has a strong support for downstream epoxy resins.

The raw material epichlorohydrin also showed a significant increase in late April. On April 20th, the market negotiated a price of 8825 yuan/ton, and at the end of the month, the market negotiated a price of 8975 yuan/ton. Although the pre holiday trading was slightly weak, it still has a supportive effect on the downstream epoxy resin market from a cost perspective.

In the future, the epoxy resin market maintained a strong upward trend in early May. From a cost perspective, the main raw materials of epoxy resin, bisphenol A and epichlorohydrin, are still operating at high levels in the short term, and there is still some support from the cost perspective. From the perspective of supply and demand, the overall inventory pressure in the market is not significant, and factories and traders still have a mentality of sustained price increases; On the demand side, resin manufacturers have seen an increase in orders before the holiday and deliveries after the holiday, indicating a sustained and stable demand. At the end of May, there was a downward risk in the market. The supply side of Dongying Hebang’s 80000 ton/year liquid epoxy resin market was continuously negative, with an increase in market input. Zhejiang Zhihe’s 100000 ton/year epoxy resin new device was put into trial operation, and Jiangsu Ruiheng’s 180000 ton/year device was restarted. The supply side continued to increase, making it difficult for the demand side to make significant changes.

In summary, the domestic epoxy resin market may show a trend of first growth and then decline in May. The negotiated price for liquid epoxy resin in the market is between 14000 to 14700 yuan/ton for water purification, while the negotiated price for solid epoxy resin in the market is between 13600 to 14200 yuan/ton for delivery.