Policies drive demand, the acrylic acid and ester market gradually recovers

In the first quarter of 2020, we experienced a sweeping epidemic, which caused a significant impact on the domestic market and even the global market economy. The second quarter is about to pass by half. With the effective control of the epidemic in China, all walks of life in China have gradually returned to normal. Run. This is undoubtedly reflected in the downstream industries of the acrylic and ester markets.

Just looking at the recovery of demand in the construction industry, China's infrastructure construction projects generally began to resume work in March. With the epidemic situation further improving, the follow-up is expected to usher in the peak demand season, and the annual performance growth is highly certain. Under this background, there is a demand recovery momentum for acrylic and even different raw materials that are also raw materials for water reducing agents. And with the continuous promotion and stimulation of national policies, the follow-up mid-to-long-term demand is also constantly increasing confidence in the market.

On April 30, 2020, the China Securities Regulatory Commission and the National Development and Reform Commission jointly issued the "Notice on Promoting the Relevant Work of Real Estate Investment Trust Funds (REITs) in the Infrastructure Sector" (abbreviation: notice). It marks the official start of the pilot of publicly-raised REITs in the domestic infrastructure sector. In addition, according to the survey, China ’s infrastructure investment may reach 19.28 trillion yuan in 2020, a year-on-year increase of 5.89%. "The same investment amount, the demand for construction machinery driven by the background of the 10.5 month period is higher than the original 11.5 month period. Demand, therefore, domestic sales of construction machinery in 2020 will greatly exceed market expectations. "There is no doubt that as infrastructure demand enhances the certainty of annual performance growth, capacity expansion opens up room for growth. For acrylic and ester products, the long-term favorable policy will undoubtedly bring good confidence in the long-term consumption channels to the upstream and downstream of the market.

Turning to the acrylic and ester products market, with the end of the May Day holiday, the domestic acrylic and ester upstream and downstream overall showed a gradual recovery trend, and the downstream factory orders that did not actively fill positions before the holiday also gradually increased. In addition, some domestic acrylic and ester production enterprises still have long-term shutdown maintenance of their devices, and the overall market spot supply speed is gradually tightening. On the market trading surface, as manufacturers 'bids gradually pushed upwards, traders followed up on manufacturers' bids in the context of limited spot holdings, and in the context of downstream demand still driving, it is expected that this price will be gradually pushed up The trend will continue. According to the data monitoring of Jinlianchuang, the current main consumption area of East China is the closing price of acrylic acid in the vicinity of 6500-6600 CNY/ton, and the closing price of butyl acrylate is in the vicinity of 7600-7800 CNY/ton. The closing price is 400-600 yuan higher than before the holiday Near the price per ton, the spot price of new orders narrowed closer to the higher end, and real orders progressed slowly.

Looking ahead, although the market mentality is still not easy to boost after experiencing the light demand during the epidemic, it is also a long-term trend that the domestic overall demand port is gradually opened under the guidance of favorable policies. The overall demand in the industry will also promote the market to a certain extent. Maintain the trade activity of spot transactions. Jinlianchuang believes that May is a critical period for the turning point of the supply and demand pattern, and it is also a key month to stimulate market trading activity and expand the spot liquidity rate. Market participants are also bound to seize the opportunity to enhance operational flexibility. From an operational perspective, it is expected that the acrylic and ester market in the future market will continue to grow within a narrow range, with limited spot supply driving orders to continue to be signed, and prices may continue a strong trend. The key recommendations focus on the growth rate of orders in the market and the overall increase in downstream demand.