Epoxy resin dual raw materials have fallen back to an inflection point

As July draws to a close, the price of LER, which has been rising vigorously and continuously for nearly a month, has reached its peak and has come to an end.

Today, the double raw material opened unfavorably as expected. Zhejiang Petrochemical's bidding ended hastily, and the price was not ideal, which made the mentality of the genuine licensee holders cold, and the closing price fell sharply to below 25,000 CNY/ton. The ring chlorine is also completely unintentional, losing to 13,000 CNY/ton day by day, showing its decline.

Since this week, the mainstream price of BPA has fallen to 1,300 CNY/ton, down 1,850 CNY/ton from the highest price of this month; the mainstream price of ECH this week has reached 900 CNY/ton, down 2,000 CNY/ton from the highest price of this month . LER has always been following costs this month, so when the dual raw materials continue to decline and there is no resilience for the time being, it is reasonable for the price to go down to the turning point.

Today's LER market is surprisingly calm. The disaster + epidemic situation has somewhat reduced some market demand, and coupled with the wait-and-see sentiment permeated, some negotiable low prices are rarely intriguing.

At present, a small number of factories have lowered their prices, and most of them are still observing trends before making adjustments.

From the perspective of cost, the downward adjustment is beyond doubt. It is only a matter of magnitude and time. However, there are still uncertain factors in the market:

1. Wind power has improved significantly in August, and the demand is greater than that in July, and the supply and output of market 128 will be affected.

2. The disaster is still a disaster, and it may cause related factories in some areas to suspend production. According to a document from the Office of the Prevention and Control of Shandong Province, affected by large-scale heavy rainfall in the upper reaches of the Zhangwei River, over-protection floods occurred in the Weihe River.

According to relevant factory news: Wudi County is located at the lower reaches of the Wei River, and the Wudi County government is waiting for flood control. There have been many meetings and several strict inspections of the preparations. The floods in Henan pass through the Zhanghe and Weihe rivers, and the floods from the two rivers converge to the Zhangweixinhe. In addition to the typhoon, I will immediately enter from Dongying. If there is a danger in Zhangweixinhe, the epoxy and ring chlorine plants in this area may evacuate and suspend production to ensure safety.

For the above two, the disaster may be short-lived, and wind power will be the lifeline of LER in the second half of the year.

According to a report from the China Electricity Council, by the end of 2020, China's cumulative installed capacity of wind power will be 281.53 million kilowatts. If according to the forecast of China Electricity Union, the cumulative installed capacity of wind power will be 330 million kilowatts by the end of 2021, which means that there will be nearly 50 million kilowatts (50GW) of new installed capacity for wind power this year.

According to data from the National Energy Administration, from January to June 2021, China's new wind power installed capacity will be 10.84 million kilowatts, which means that in the next six months, China will have nearly 40 million kilowatts (40GW) of new market space. The wind power market continued to maintain a high level of prosperity in the first year after the onshore wind power installation was completed.

In view of this, it is boldly predicted that this wave of LER downward adjustment will not last for a long time, and it is very likely that it will fall shortly in Changhong in August. Therefore, the industry should have a clear understanding, seize the opportunity, absorb the bargain, and refrain from improper procurement.