Increased decline in the chemical market

Last week, the start-up load of the terminal industry fell, and the decline in the chemical market increased. The Chemical Price Index (CCPI) released by Chemical Online closed at 4132 points, a drop of 2.3%.

Among the 160 important chemical product prices monitored, 36 products rose, accounting for 22.5%, and the top three products were propylene glycol, dimethyl carbonate and MDI; 62 products fell, accounting for 38.7%. The top three products that fell were acetone, bisphenol A and PVC; there were 62 stable products, accounting for 38.8%.

Judging from the list of gains, driven by the rise of raw material propylene oxide, the downstream market of propylene glycol and dimethyl carbonate finally stopped falling and rebounded. Due to the strengthening of environmental protection control in the north, the operating rate of several propylene oxide installations in Shandong, the main production area, has declined, and the market offer price has risen, driving the entire industrial chain to go up. However, because the Jinling Huntsman device is restarting and the demand side of the industry chain lacks momentum, the market outlook is expected to be the main focus.

The MDI market rose within a narrow range. Affected by the shutdown of Wanhua and other devices, domestic MDI inventories remained low. Downstream staged replenishment of positions, market speculation heated up, and the market rose within a narrow range. However, Wanhua’s January listing price has been significantly lowered by RMB 4500 from December 2020 (ton price, the same below), and it is expected that the market outlook will be a narrow range consolidation.

Compared with the few rising products, more products fell last week. Among them, the acetone and its downstream bisphenol A market fell more obviously. The pre-maintenance equipment restarted, and the superimposed cargoes arrived at the port, which greatly increased the supply of acetone. At the same time, the downstream start-up load decreased, demand decreased, petrochemical companies' quotations were sharply lowered, and the focus of market negotiations declined. The BPA market is lightly bought and bears strong, and there is still the possibility of a continued decline in the short term.

The PVC market continued its downward trend, with a cumulative decline of more than 1,000 yuan in just half a month. The industry overhaul period ended, and new devices such as Wanhua began to ship, increasing supply. The terminal industry is affected by limited power, demand has shrunk, and the mentality of resistance to high-priced raw materials has increased. With the sharp decline in the futures market, the spot market has continued to fall.

Methanol recovered from a high level last week, with a drop of 8.3%. The stagnant cargoes were unloaded in a concentrated manner, and new devices were put into production in the northwest region, which was bad for the market, and futures and spot prices fell. However, due to Iran's gas restrictions, the import volume has dropped. It is expected that methanol will have a limited decline in the market outlook, mainly due to shocks.

Looking at this week, as the domestic Spring Festival holiday approaches, the downstream bearish attitude is gradually increasing. It is expected that the chemical market will continue to be weak this week.