Market overview for the year

Domestic adipic acid price trend chart 2019-2020

In October, the domestic adipic acid market continued to rise. During the National Day holiday, crude oil fluctuated upwards, boosting the industry's mentality, and before the holiday, the factory announced that the listed price in October rose sharply by RMB 500/ton, and the market has strong intentions. After returning from the holiday, concerned aboutcost pressure, the intermediary's quotations continued to rise to test downstream buying. However, with the listing of Sinopec's pure benzene pricereduction by RMB 150/ton to RMB 3,300/ton, the cost side suppresses the industry's mentality, and the market is mostly wait-and-see. However, subsequently drivenby the continuous rise of styrene, the pure benzene market rebounded, and Sinopec’s listing continued to rise to 3,600 CNY/ton. The cost-side support increased, and the listing of adipic acid plants continued to follow the upward adjustment of raw materials to guidethe market. Intermediaries are concerned about settlement at the end of the month, and have little intention of lowering their intentions. After some ofthe early profits are gradually digested, the market's focus gradually shifts upwards. The downstream procurement demand is generally performed. As the price of adipic acid increases, high-end transactions are difficult. Entering the settlement cycle at the end of the month, and there is no obvious shipping pressure for the time being, some intermediaries have offered steady and slightly higher prices, and some have not reported and waited for news guidance. However, the downstream is generally accepting high prices, and real-order negotiations are the focus. In addition, the trend of crude oil and pure benzene is weak, and the industry is cautious, mainly following the market, paying more attention to settlement news.

Overall market analysis

International market price comparison

Installation of adipic acid plant this month

In August, the domestic average monthly operating rate of adipic acid was 58.4%.

Raw material cost and change analysis

This month the domestic pure benzene market first rose after falling, prices rose significantly compared with last month,mainly due to the rise of the lower styrene market. After National Day, thestyrene prices rise, the east China pure benzene offer first to rise, lead to refined oil prices benzene, hydrogenation of benzene to market adjustment,until mid to late with styrene market highs, the slump in crude oil,insufficient market support, pure benzene market is influenced by the spreading, the east China offer first to fall, origin market atmosphere turnedpale, pure benzene price highs, but suffer to inventory positive supportstyrene market rose again, the market confidence restored, pure benzene marketstop falling at the end of east China rise offer pure benzene. In the afternoon, the styrene fundamentals are still good, and the short-term market will remain strong. In November, new production capacity was put into operationin the downstream of North China and East China, market demand was expected toincrease, and the pure benzene market was supported, so the possibility offurther upward could not be ruled out. However, in terms of supply,hydrogenation benzene has started to maintain a high level, and pure benzene inventory in East China remains high. At present, the price difference between the internal and external trade is relatively large, and the import arbitrage space remains. It is difficult for ports to deinventory, so there is a certain negative impact. Specific trends still need to pay attention to supply and demand surface changes and peripheral information surface guidance.

Main downstream start-up analysis

Downstream slurry start steady operation, overall load 5-60%, sole stock market overall start load about 70%, waiting for further recovery of demand in October. TPU market starts to maintain about 80%; The main plant of nylon field starts about 60 percent. In September, due to thedouble-section impact, the demand for downstream storage and stocking up is generally better than that of last month.

Market trend forecast for next month

Views and Summary

In November, styrene fundamentals are still good, support for pure benzene can be, the main adipate factory release November high closure news, concerned about cost pressure, at the end of the middlemen do not ship sealed, reported inventory significantly increase dexpectations. It is expected that the domestic adipic acid market will continue to rise next month.