Plunged 5000! Stocking traders sharply cut prices and sell goods! Is the chemical giant brewing the next wave of 'price hikes'?

The price increase will not be endless, and the price may fall or be late, but it will not be absent!

Crude oil fell to a new low in April, and soaring raw materials started a downward trend, falling by 1,000 in a single day, and some raw materials have fallen by 5,000 from the beginning of the month! The market has a strong bearish mentality, and many stock traders have begun to drastically cut prices and sell their stocks!

However, there are still giants throwing out a letter of price increase in June, and the market outlook is getting more polarized?

Sanctions lifted! Crude oil plummeted to its lowest since April!

Yesterday Iranian President Rouhani stated that he had reached agreement on the main parts of the Iran nuclear agreement. The West has agreed to lift major sanctions on Iran, such as oil, petrochemicals, shipping, insurance, and the central bank.

According to Iranian officials, the state-owned Iranian National Petroleum Corporation is preparing to restart oil fields and customer relations. If negotiations with the United States go well, Iran will expand its crude oil exports. The most optimistic forecast shows that it may take as little as three months for Iran’s crude oil production to return to the pre-sanction level, reaching nearly 4 million barrels per day.

After Iran released a signal of progress in the Iranian nuclear talks, international crude oil futures turned down during the trading session, and then fluctuated downward. US WTI June crude oil futures closed down 2.07%, a record low since April 26; Brent July crude oil futures closed down 2.32%, a record low since April 13!

In addition to the increase in Iranian crude oil supply, if OPEC's production restriction plan fails, the supply of crude oil will recover very quickly. In addition, the Palestine-Israel conflict has exacerbated geopolitical tensions in the Middle East, the Indian variant virus may delay the timetable for the lifting of the blockade measures in Europe and North America, and there is still a risk of a correction in oil prices.

However, as the summer travel peak is approaching, a short-term rise in oil prices cannot be ruled out. A recent Goldman Sachs report mentioned that Brent oil prices are expected to reach US$80/barrel. It is expected that by June, global oil demand will increase substantially, from the current 94.5 million barrels/day to 99 million barrels/barrel in the third quarter of 2021. day.

Stocking traders sharply cut prices and sell goods!
Soaring raw materials plummeted by 5000!

With the continued correction of crude oil, the market for chemical raw materials continued to stall. According to market data monitoring, a large number of previously popular chemicals began to plummet in mid-May, especially raw materials that have soared to new highs before! Butanediol fell by 17.71%, acetone fell by -16.06%, and epoxy resin fell by -12.93%.

It is understood that the reason for the decline in the prices of some raw materials is related to the imbalance between supply and demand caused by the conflicting high prices of the terminal downstream. In addition, from "straight into the sky" to "sudden decline", the sharp turn of the raw material market is inseparable from the supervision of relevant departments, which shows that the current regulators are determined to curb the excessive rise of commodities.

As the country speeds up the pace of regulation, hoarding traders have also begun to drastically cut prices and sell their goods, which has helped the spot price to fall further.

The person in charge of a steel trading company in Linping, Hangzhou, said that steel prices have been soaring before, and dealers are also involved in a lot of speculation in addition to normal purchases from steel mills. Recently, the steel market has noticed the various signals issued by the supervisory authorities, and speculators are like "horrified birds" and have cut prices for shipments.

Next, let's take a look at the market outlook analysis of several plummeting varieties.

▶Bisphenol A, epoxy resin: prices fluctuated after the plunge, with a strong bearish mentality!
The upstream crude oil fell, the bisphenol A fell, and the long-term high price of epoxy resin was affected, and downstream factories traded cautiously. The quotation of epoxy resin is hovering at RMB 30,000/ton, a decrease of RMB 5,000/ton from the beginning of the month, and a weekly drop of RMB 2,000/ton.

Recently, some factories in Huangshan area have been shut down for maintenance. It is expected that epoxy resin will mainly maintain stable operation in the short term, and the state will intervene in price adjustments, which does not rule out the possibility of a decline in the market outlook.

▶Polymerized MDI: The market is sluggish, and the big factory cuts 5,000 yuan!
Downstream procurement is cautious and orders are decreasing. Major manufacturers such as BASF and Wanhua announced the May listing price of polymerized MDI, which was lowered by RMB 4000-5000/ton from the previous month. Combining market demand and national adjustments, it is expected that aggregate MDI will continue to decline this month.

In fact, the large fluctuations in commodity prices are detrimental to the upstream and downstream of the industrial chain. When the prices of commodities as raw materials rise, downstream processing companies often face dilemmas such as reduced profits, declining consumer demand, and reduced orders. When the prices of bulk commodities fall sharply, traders and distributors in the middle of the industrial chain are very likely to encounter problems such as order defaults, inventory backlogs, and profit losses.

Giants continue to increase prices, and the market outlook is confused?

Under national regulation, the days of raw material speculation have basically come to an end. However, some giants are still spreading out of stock and price increase notices recently, and the market outlook is confusing!

▶▶ ExxonMobil and Dow Chemical announced to increase the price of PE in June
Equistar Chemicals, a subsidiary of Exxon Mobil and Lyondell Basel, announced an increase in the price of PE products in North America. The two companies stated in a letter to customers on May 19 that the price adjustment will take effect on June 1.

Exxon Mobil stated that the price of all its LDPE and LLDPE products will be raised by 5 cents/lb, and the price of HDPE resin will be raised by 7 cents/lb.

At the same time, Equistar Chemicals said that all its grades of PE products will be increased by another 7 cents per pound on the basis of the previous price adjustment.

In addition, Dow Chemical and Chevron Phillips Chemical also announced on May 17 and May 18 to increase the prices of their respective PE products. Chevron Phillips’ increase was 7 cents/lb, while Dow Chemical’s increase was 5 cents/lb. The price adjustments all took effect on June 1.

▶▶ The paint faucet announced the increase!
On May 20, Beijing Oriental Yuhong Waterproof Technology Co., Ltd. issued a price adjustment notice, stating that starting from the second half of 2020, the prices of various raw materials such as emulsions, curing agents, resins, asphalt, and modifiers have continued to rise sharply. The company researched and decided to increase the price of the entire line of products. Now we will notify you 15 days in advance:
Asphalt coils are increased by 10~15%;
Increased by 10% for polymer coils;
The price of polyurethane coatings will be increased by 10% on the basis of the price released on January 1;
15~20% increase for water-based paint;
Asphalt paint is increased by 10%;

On May 20th, Sankeshu Paint Co., Ltd. issued a price adjustment notice, stating that from May 25th, the price of engineering products will be raised, and the adjustments are as follows:
Imitation stone coatings will increase by 15~25%;
15%-30% for latex paint;
Floor coatings will be increased by 15-20%;
Kiev materials are raised by 10%-15%;

▶▶ Trinseo adjusted prices four times in a month, up to a maximum of 4000 yuan!
On May 18, Trinseo announced that from June 1st, it will increase the price of all VP latexes sold to the tire cord market in Europe, the Middle East and Africa by 500 euros/ton (approximately 3917 CNY/ton).

Since the end of April, this is the fourth time Trinseo has increased product prices. The increased products include PC, PS, ABS, and latex. Among them, PC has the highest increase, reaching 510 euros/ton (approximately 3976 CNY/ton).

▶▶ Sumitomo Chemical announced to increase the price of MMA, an increase of 1,600 yuan!
On May 19, Sumitomo Chemical announced that starting from May 26, the company's MMA monomer price will increase by 28 yen/kg (about 1649 CNY/ton).