The Chemical Market Is No Longer Just Raising Prices — It Has Started Stopping Quotations

By April, the mood in the chemical market had already clearly changed.

If the first quarter was still dominated by the words “price increase,” then by April the market had already moved one step further, entering a new stage of suspended quotations, sealed orders, hoarding, and waiting for the right pricing window. On April 7, WTI crude oil futures rose above US$114 per barrel, with intraday gains expanding to 2%. On the futures market, ethylene glycol was up more than 9%, plastics and methanol both rose more than 7%, polypropylene gained more than 6%, propylene more than 5%, and BR rubber kept moving higher as well. With upstream energy and midstream chemical products strengthening together, market sentiment was pushed sharply upward. At that point, the most immediate reaction on the spot side was not a surge in transactions, but growing caution among producers: quotations became harder and harder to give, and cargoes became less and less easy to release.

That reaction had already shown up on April 3. On that day, the domestic market saw a broad wave of suspended quotations. More than 200 major companies, including Shandong Haihua, Huangshan Yuanrun, and Jingbo Petrochemical, suspended external offers, covering bromine, epoxy resin, pure benzene, solvents, olefins, titanium dioxide, synthetic ammonia, methanol, and many other core categories. Suspensions were especially concentrated in bromine, phosphorus chemicals, epoxy resin, polycarboxylate water reducer monomers, solvent oil, and marine fuel. Put simply, the market had moved from “raising prices” to “not quoting for now, just wait.” Because raw materials were still moving, expectations were still changing, and spot supply was tightening, whoever quoted first risked quoting wrong.

But this wave of suspended quotations did not appear out of nowhere. It was pushed out step by step by the violent rise in raw material prices during the first quarter.

From early January to the end of March, coating raw materials rose almost across the board. Trimellitic anhydride climbed from RMB 13,000 per ton to RMB 42,000 per ton, a quarterly increase of 220%, the most eye-catching number of all. Imported propylene glycol rose from RMB 7,250 to RMB 21,000, up 189.66%. MEK rose from RMB 6,235 to RMB 13,750, up 120.53%. Ethylene glycol monobutyl ether rose from RMB 6,925 to RMB 14,100, up 103.61%. These products were no longer just “rising” in the ordinary sense — they were directly lifting the ceiling of the industry’s cost structure.

Looking further down, there was an entire block of raw materials rising between 50% and 100%. Butyl acrylate rose 90.08%, MIBK 86.13%, domestic propylene glycol 85.02%, isopropanol 83.98%, diethylene glycol monobutyl ether 82.95%, methyl acrylate 76.05%, 2-ethylhexyl acrylate 71.70%, propylene glycol methyl ether acetate and propylene glycol methyl ether both 66.45%, pure benzene 66.11%, sec-butyl acetate 59.69%, ethyl acrylate 57.80%, toluene 57.56%, styrene-acrylic emulsion 55.79%, cyclohexanone 53.56%, butyl acetate 50.55%, and n-butanol 50.22%. In other words, the main raw materials that really support the cost structure of coatings were almost all under heavy pressure.

Then there were the products that had not doubled, but were still rising all the same. Methanol was up 48.89%, industrial heavy aromatics by 45.65%, xylene by 44.68%, high-boiling aromatic solvents by around 40%, and pure acrylic emulsion, isobutanol, epoxy resin, polyvinyl alcohol, octanol, titanium dioxide, and dimethyl carbonate were all moving higher too. Titanium dioxide rose from RMB 13,100 to RMB 15,150. On paper that looks like only 15.65%, but in a cost environment where everything else had already shifted higher, it was no longer a mild fluctuation — it was moving up together with the whole system.

What made this round especially difficult was that it was not a local flare-up in one single chain. Aromatics, ketones, alcohols, esters, resins, emulsions, and pigments were all moving higher together. Upstream crude oil and olefins were climbing strongly, midstream spot supply was tightening because of maintenance turnarounds and supply cuts, downstream coating plants were seeing operating rates recover, and rigid demand was moving forward. The result was an increasingly obvious supply-demand mismatch. Tight imported supply made the situation even worse. In products like imported propylene glycol, once shipping and exchange rates were added on top, prices were almost pushed up in one go.

If the view is widened further, this was not coatings raw materials losing control on their own, but the entire chemical bulk market moving upward together. In the first quarter, 207 chemical commodities posted quarter-on-quarter gains, and 139 of them rose by more than 5%. MEK was up 132.90%, acrylic acid 124.22%, and butadiene 116.80%. These front-running products had already lifted overall market sentiment. In other words, the sharp rise in coating raw materials was not an exception, but part of a broader cost-driven rally across the chemical market. It was just that coating companies felt the pain more directly, because they deal with too many kinds of raw materials, their formulations are more complex, and cost pass-through is slower.

That is exactly why a large-scale suspension of quotations suddenly appeared in early April. After the first quarter had already pushed raw materials to these levels, what companies faced was no longer simply “should we raise prices,” but “can we still quote at this level at all.” Quote too low, and the loss cannot be made back later. Quote too high, and customers may not accept immediately. Spot supply was not loose either, so the safest choice was simply to wait. The market then enters a very typical state: prices exist, but nobody wants to quote them; demand exists, but nobody wants to chase them; goods exist, but nobody wants to sell them now.

So although the market now looks as if transactions have slowed, it is not because demand has suddenly collapsed. It is because both upstream and downstream are trying to confirm a new pricing range. Producers are controlling volumes, waiting for a window, and watching whether the next round of price increases can go higher. Downstream buyers are hesitating, comparing offers, and judging whether this round is a short-term emotional surge or whether the cost center has truly moved up. But the problem is that as long as upstream futures such as crude oil, methanol, ethylene glycol, and plastics remain strong, hesitation in the spot market will itself keep reinforcing hoarding behavior.

The coatings industry is likely to feel even more pressure next. The first-quarter rise has already pushed production costs onto a new platform. If downstream orders are still taken at old prices, margins will be squeezed flat very quickly. But if producers try to pass those increases on, not every customer will immediately accept them. Small and medium-sized companies in particular, with weaker capital, thinner inventories, and less bargaining power, are likely to feel the pressure first. Larger players can still use inventories, procurement strategies, and customer structure to buy some time. Smaller ones have far less room to maneuver.

In the short term, this market is unlikely to fall back quickly. Crude oil is still high, turnaround and supply-tightening expectations are still there, futures are still rallying, and the spot market has already moved into suspended quotations and hoarding. Put together, these factors mean the question now is no longer “after this rise, will there be a correction,” but “when will a new quotation system finally stabilize.” At this point, what will determine the next phase is still those most practical questions: whether upstream costs will continue to rise, whether plant tightness will continue, and at what price producers will reopen quotations after the suspension.

At least for now, the first two variables still have not eased.

So this April wave of suspended quotations is not a side story. It marks a stage change. The market has moved from the broad-based rise of the first quarter into a second-quarter phase of repricing. What matters most now is no longer whether raw materials have risen, but who stops quoting old prices first, and who starts shipping again on the basis of new costs.