Acrylic acid market and gross profit trend review

1 Acrylic acid market analysis

Compared to 2021, when the domestic economy is significantly affected by "energy efficiency dual control", the "high temperature electricity restriction" policy in 2022, although the overall impact is limited, still has a significant effect on the trend of domestic organic chemicals. The domestic acrylic market as a whole showed a weak trend, especially the second quarter did not break the bottom, and the operational confidence of market players continued to be impaired. While there was a brief rebound, the overall push was limited. The performance was as follows:

While oil prices remained high and volatile in the first quarter due to geopolitical and other factors, combined with the maintenance of some domestic installations, positive supplies continued to ferment, the focus of market negotiations around the push. As the pandemic continues to spread and containment management is carried out on behalf of the Shanghai region, domestic acrylic terminal demand has been greatly affected, its social inventory digestion is slowing down, the peak season is not prosperous and a weaker off-season is evident.In addition, the acrylic market itself supply and demand contradiction prominent constraints on market operation, especially in the second half of 2022 acrylic industry load is not high, although the second quarter and the early third quarter of a longer period of price adjustment makes acrylic profit restricted, the price further down the space narrowed, and losses under the pressure of the factory price intention is obvious, but the terminal mentality continues to be cautious, Users just need to buy, acrylic market reaction relative to the first half of 2022 flat, negotiate activity except "gold nine silver ten" overall performance is insufficient, the market stalemate situation to the end of the year.

Changes in capacity, or growth in capacity, have a short-term impact on the market.Supply exceeds demand, and both short-term profits and spot prices fall within a certain period of time.However, in the medium and long term, export trade and the development of new demand areas have become the new growth areas of the market, and the increase in integration projects has also led to a gradual increase in the influence of Chinese enterprises, as well as the domestic market, on the global acrylic trade. Longzhong statistics show that the annual average price of acrylic in 2018-2022 is around 9,000 yuan per ton.At the end of October, the average annual price for 2022 was 11,359 yuan per ton, 490 yuan per ton lower than the 2021 price and 2,284 yuan per ton higher than the five-year price.

2 Correlation analysis of acrylic acid industry chain price

The price trend in the acrylic industry chain is generally consistent. Compared to 2018-2021, 2022 is less consistent. Acrylic acid price fluctuations are still mainly influenced by its own supply and demand side. While supply bottlenecks in crude oil and geopolitical conflicts continued throughout the year, the acrylic market moved in the wake of macro interest rate hikes and falling boot prices, as well as its own weak demand under the influence of acrylic talks around a low base-centric weakness shock.

Prices of propylene are expected to fluctuate less than those of acrylic in 2018-2022. In 2022, although supported by global inflation, the prices of acrylic acid and ester have declined to varying degrees compared with 2021, with the difference between the highest and lowest prices exceeding 9000 yuan, and the five-year change between 2018-2022 is 23.40%, which is the highest in the past five years.

In terms of 2022 prices, the average correlation between acrylic and other esters is 0.78, with butyl acrylate prices and raw propylene prices having a correlation of 0.93 and 0.55, respectively.It is worth noting that, as an important raw material of other esters of acrylic acid, the amount of acrylic acid in each major ester accounts for 0.50-0.87 level, the price trend of acrylic acid directly affects other price trends, also in the profit aspect also has more than 50 correlation. In addition, Longzhong statistics showed that the prices of acrylic acid and other esters were adjusted only in June.

3 Cost and gross profit analysis of acrylic acid industry in China

Acrylic is profitable in 2022, but at a significantly lower average profit level compared to 2021. The reason is mainly reduced profits from downstream products and the enthusiasm for acrylics has always remained cautious. At the profit level, the mean correlation between acid and additional esters is 0.61 and between acid and butyl acrylate is 0.75. In terms of cost, the mean correlation between acrylic and alternative esters was 0.67 and between butyl acrylate and cost was 0.50. As acrylic esters of different raw materials, its cost and other products have high correlation coefficients. Only in April did the gap in ethyl acrylate become larger. For the whole year 2022, the main factors for long-term damage to acrylic are:

1. Some pre-maintenance equipment was restarted successively, and cargo supplies were improved;
2. the expansion of public health events, limited logistics and transportation, and weakened the availability of goods;
3. downstream load growth was moderate and demand significantly reduced;
4. manufacturers continue to be cautious, resulting in overall acrylic operation enthusiasm limited.

The commercial volume of acrylics will remain relatively tight from 2018 to 2022 as domestic demand increases and application areas continue to develop. The average annual profit for acrylic in 2022 was 2,754.57 yuan per ton, which was 2573.07 yuan per ton below the 2021 average and 1,772.42 yuan per ton above the 2018-2022 average.In terms of corresponding costs, the average annual cost of acrylic in 2022 is 6,683.92 yuan per ton, 127.02 yuan per ton below the 2021 average and 107.92 yuan per ton above the 2018-2022 average.On balance, the market will remain highly profitable in 2021. At other times, especially in 2022, there will be a loss of external momentum and demand in the domestic trade market will suffer.The high profits of the acrylic market will gradually decrease and the market profits will gradually become rational.On the cost side, the 2022 cost price is lower than the 2021 cost price due to the softening of propylene prices, but it is still higher than the five-year average for 2018-2022.

4 Comparative analysis of acrylic acid industry chain profit in China

In 2022, the average profit of E acrylic acid factory 4527.64 CNY/ton, thanks to the narrow fluctuations in the price of raw material propylene and acrylic acid itself downstream esters are widely used and profit maintains a relatively wide range, although the profit of acrylic acid in 2022 is reduced compared with that in 2021. However, it is still a good product for propylene downstream products to profit from. Among acrylate products, methacrylate/ethyl acrylate has the best profit (its annual average profit value in 2022 is 8956.71 CNY/ton and 5143.64 CNY/ton, respectively). However, due to the smaller overall production capacity and output, as well as the relatively simple user demand compared to butyl acrylate, which pretends to be the downstream ester of acrylic, its demand and development highlights remain around butyl acrylate and isooctyl acrylate. According to Longzhong, statistics show that the average annual profit of butyl acrylate and isooctyl acrylate in 2022 is 2,477.81 yuan per ton, compared with 2,844 yuan per ton in 2008. From the perspective of profit of the acrylic industry chain in 2018-2022, its profit retention link: methyl acrylate > Ethyl acrylate > Acrylic acid > Butyl acrylate > Isoctyl acrylate > Propylene. The average annual profit for acrylic in 2022 was 2,515.72 yuan per ton, which was 500.01 yuan per ton lower than the 2021 average, but higher than the 2011 average of 2,591 yuan per ton for the 2018-2022 period.