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Chemical Market Continued To Fall Last Week
Mar 19, 2018

The crisis of supply and demand imbalances has caused the chemical market to continue to fall. Last week (03.12-03.16) Chemical Online Chemical Price Index (CCPI) closed at 5,059 on Friday, a decrease of 1.3%.

Of the 160 major chemical products monitored, only 36 products accounted for 22.5% of the total, and the top three products were methyl methacrylate (6.0%) and butyl acetate (4.7%). Methanol (3.7%); 72 products fell, accounting for 45.0% of the total; the top three products were epichlorohydrin (10.4 %), MDI (9.6%) and TDI (7.3%); There are 52 products, accounting for 32.5% of the total.

Last week, the methyl methacrylate market continued to rise, with gains of over a thousand yuan during the week (t price, the same below). In addition to the benefits brought by the centralized overhaul of many domestic installations (such as Shanghai Lucite and Huayi Jade Emperor), it is also crucial that downstream products resume normal production. At the same time, at the end of February, the Ministry of Commerce announced that the anti-dumping tariff of methyl methacrylate was raised, which further reduced the entry of import sources. From April to April, there are still several sets of equipment planned for overhaul, and the supply side is expected to continue to be tight. It is expected that the market outlook for methyl methacrylate will be high.

In the wake of the rise in raw materials, acetic acid and n-butanol, butyl acetate companies increased factory prices last week. Recently, butyl octanol companies have entered the centralized maintenance period. The butanol market has experienced a strong rise, benefiting from the strong support of the supply side, and the downstream butyl esters market has risen. The current operating rate of the Yankuang plant is relatively low, so the supply surface is not very plentiful. However, the current downstream demand is weak, the market gains have been blocked, and the butyl acetate market has entered a wait-and-see attitude. If market demand picks up, the market may continue to increase.

As the demand side improved, the methanol market rebounded slightly last week. However, due to the large number of complex production facilities, adequate supply on the site, and the continuous import of cargoes from ports, the methanol inventory still has an increasing trend. Although the company intentionally pushed up, but the downstream is still mostly wait and see, methanol rebound resistance. In March-April, some of the methanol-to-olefins plants began to be overhauled, and there is still a bearish outlook for the market.

The epichlorohydrin market was lowered last week, with a drop of nearly 2,000 yuan during the week. Before the Spring Festival, major companies had sufficient stocks. The post-holiday downstream recovery was slower than expected, and consumption was slow. Although some manufacturers had strong market intentions, the market still had frequent low prices, and the industry’s bears were more bearish, and the prices quickly recovered.

Due to the slow recovery of downstream companies and the deserted trading, the aggregated MDI market was clearly downtrend last week. At present, domestic supply is relatively abundant. At the same time, BASF and Dow have recently lifted the force majeure of MDI, and Dow's low-cost supply shocked the domestic market.

Last week, the TDI market continued to decline sharply, basically falling from the mid-December last year. Since the beginning of New Year's Day, the domestic TDI market has remained at a high level, resulting in major companies maintaining high-load production and adequate social inventory. However, the post-holiday recovery production of downstream plants was later, resulting in the current imbalance between supply and demand. At present, manufacturers to clear the inventory of low-cost shipments, the latter part of the downstream or have the advantage of concentrated short-sales make the market rebound.

International crude oil futures rebounded slightly last week, but it has little effect on the domestic market. The Spring Festival this year is relatively late, and the recovery of downstream demand has also been slow to recover due to various reasons. High inventory and low demand were the main factors that caused the chemical market to decline last week. It is expected that the market will remain weak this week. The overhaul of the companies at the end of the month and the improvement of downstream demand will bring about a turn for the weak market.