Price trend

According to the bulk ranking data from Shengyi Society, the domestic PC market fluctuated at a low level in late November, with most spot prices of various brands stabilizing slightly and falling slightly. As of November 26th, the mixed benchmark price of Business Society PC is around 15900 yuan/ton, with a price fluctuation of -0.62% compared to early November.

Cause analysis

Supply side: Recently, the overall operating rate of PC in China has slightly decreased, and enterprises have gradually entered maintenance. The industry average operating rate has narrowly fallen from 77% in the middle to around 75%. The weekly production of PC has also fallen from the ultra-high level of over 60000 tons in the medium and long term to below 60000 tons. But the on-site supply of goods is still abundant, and the supply-demand mismatch pattern remains unchanged. Good news on the supply side is difficult to achieve, with high inventory causing manufacturers to be unable to raise prices, and low ex factory pricing resulting in a stalemate. At the same time, there is an expectation of resumption of work in the future, and the market supply side has poor support for PC prices.

In terms of raw materials, it can be seen from the above chart that the horizontal trend of domestic bisphenol A prices continued in late November. In the early stage, some companies conducted maintenance and the upstream phenol cargo was delayed in arriving at the port. Although there were some positive news in terms of supply and cost, the main downstream PC and epoxy resin stocks were average. In addition, the acetone market has stabilized, and overall, there is a long short confrontation in the current bisphenol A market, with a balanced operation. Bisphenol A has limited impact on the cost support of PC.

In terms of demand, the PC consumption pattern has not improved for a long time, and the overall trend continues to be weak in the previous period, with the logic of weak rigid demand procurement in the market. Industry players tend to have a wait-and-see attitude, while downstream factories purchase goods to maintain production. Buyers have strong resistance to high priced goods, and the circulation of goods on site is slow. The overall inventory in China is high, and merchants have increased their price reduction and order placement operations, making it difficult for the demand side to form strong support for PC spot prices.

Future forecast

The PC market trend in late November was generally weak. The upstream bisphenol A market is generally flat, and the support for PC cost side remains basically unchanged. Recently, the load of domestic aggregation plants has continued to decrease slightly, and there will be more restarts than maintenance in the short term, leading to relaxed supply expectations. At the same time, the industry’s inventory is high, and supply pressure remains high. The downstream weak rigid demand stocking pattern has not changed, making it difficult to drive market trends. The price of PC has fallen below the low point of the year, but the profound mismatch between supply and demand cannot be alleviated in the short term. Therefore, Shengyi Society predicts that the PC market may still show signs of fatigue in the future.

According to the Commodity Market Analysis System of Shengyi Society, the domestic polyester staple fiber market has been slightly weak and adjusted recently. As of November 25th, the average price of 1.4D * 38mm in mainstream factories in Jiangsu and Zhejiang was 7226 yuan/ton, a decrease of 0.23% from November 12th.

Prices are mainly driven by costs, and international crude oil prices have shifted upwards due to the escalation of the conflict between a European country and Ukraine, the decline in the US dollar exchange rate, and the shift in the center of gravity of crude oil prices. As of November 21st, the settlement price of the main contract for WTI crude oil futures in the United States was $70.10 per barrel, and the settlement price of the main contract for Brent crude oil futures was $74.23 per barrel.

The domestic PTA market price has stabilized and stopped falling. As of November 22, the average market price in East China was 4832 yuan/ton, an increase of 0.76% from November 18. But PTA has started to accumulate inventory, and according to statistics, the social inventory is around 3.86 million tons. At present, 3 million tons of PTA plants in East China, including 1.5 million tons and 2.5 million tons of PTA plants, 4.5 million tons in South China, and 1.2 million tons in Northwest China, will be restarted and their load will be increased gradually. The current PTA operating rate in China is around 86%, and it will further increase in the future, with ample supply in the spot market.

On the demand side, it is currently the seasonal off-season, and it is difficult for there to be a significant increase in production in the future. Therefore, the demand for polyester staple fibers remains the main demand. Market demand is expected to further weaken. There is generally a lack of confidence in the future market, and most downstream procurement attitudes may still be cautious. In the fabric market, the speed of winter fabric and lining shipments has slowed down, and sporadic orders for spring and summer fabrics have been placed. As the end of the month approaches, there may be a moderate amount of stocking up on dips.

Business analysts believe that due to the ongoing uncertainty in the geopolitical situation in Europe, international crude oil may experience a wide range of fluctuations. The PTA maintenance equipment has been restarted one after another, and the increase in production has strengthened the expectation of loose supply. At the same time, the demand momentum is insufficient after the end of the peak consumption season. Overall, the pressure on supply and demand has increased, and it is expected that the price of polyester staple fiber will mainly decline.

According to the Commodity Market Analysis System of Shengyi Society, the PET market price is running weakly. As of November 22nd, its average market price is 6220 yuan per ton.

International crude oil prices fell widely. On November 21st, WTI December crude oil futures closed down 0.52 US dollars, a decrease of nearly 0.75%, at 68.87 US dollars per barrel. Brent crude oil futures for January closed down $0.50, down over 0.68%, at $72.81 per barrel. The cost support for PET is slightly weak. In addition, weak terminal demand has led to increased pressure on some sources of goods to be shipped. Under market pressure, PET lacks upward momentum.

Overall, the PET market prices may continue to experience narrow adjustments in the short term. The actual trend still depends on the trend of the raw material side and the subsequent actual supply and demand situation.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of LLDPE (7042) was 8636 yuan/ton on November 14th, and the average price was 8700 yuan/ton on November 21st, with a price increase of 0.73% during this period.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of LDPE (2426H) was 10733 yuan/ton on November 14th, and the average price was 10816 yuan/ton on November 21st, with a price increase of 0.78% during this period.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of HDPE (2426H) was 8500 yuan/ton on November 14th, and the average price was 8500 yuan/ton on November 21st, during which the quotation was temporarily stable.

Recently, the trend of polyethylene has been strong, with LLDPE and LDPE showing significant increases, and HDPE prices remaining firm. On the supply side, the maintenance of enterprise equipment is relatively concentrated, and the supply of goods is tight, which is favorable for the polyethylene market. Petrochemical companies have slightly increased their quotations, and traders have followed suit with offers. The demand for agricultural film in November has weakened from the peak season, with some factories operating at a lower rate compared to the previous period. Downstream demand for essential supplies has been maintained, with limited new orders and average market transactions. The favorable policies have boosted the plastic market, and the market mentality is relatively strong.

On November 21st, the polyethylene L2501 contract on the Dalian Commodity Exchange opened at 8475 yuan and closed at 8445 yuan, up 38 yuan, with a maximum of 8502 yuan and a minimum of 8417 yuan, up 0.45%. The recent strong trend of polyethylene futures has boosted the spot market.

The maintenance of the equipment will be concentrated in November, and new production capacity will be put into operation in December, with an expected increase in the supply side; The demand for greenhouse film is gradually coming to an end; Downstream consumers are more resistant to high priced goods sources, limiting the upward potential. It is expected that the upward potential of polyethylene will be limited in the short term.

In mid November, the domestic ABS market remained stable with small fluctuations, and the spot prices of various grades showed relatively narrow changes. According to the Commodity Market Analysis System of Shengyi Society, as of November 20th, the average price of ABS sample products was 11500 yuan/ton, an increase or decrease of+0.11% compared to the price level at the beginning of the month.

Fundamental analysis

Supply level: In mid November, the operating rate of the domestic ABS industry continued to rise, and the load level continued to increase. After the load increase in Tianjin Dagu and Jilin Petrochemical in the first ten days, the supply of Zhejiang Petrochemical has also increased recently. The industry’s operating rate has increased by nearly 4% to over 73%. The overall production of goods within the range remains higher than the digestion pattern, with an average weekly output of over 120000 tons. Although inventory accumulation has stabilized, its position remains at a high of 190000 tons. Overall, the supply side’s support for ABS spot prices continued to decline in mid November.

Cost factor: Recently, the three upstream materials of ABS have shown mixed trends, with overall support for ABS costs being average. The acrylonitrile market has seen a significant increase. Due to the high number of parking and maintenance facilities in acrylonitrile factories in East China, market prices continue to rise under tight supply. However, the downward transmission of prices is difficult, and it is expected that the short-term acrylonitrile market will have limited upward space.

In mid November, the domestic butadiene market continued to decline. There is news of equipment being put into operation in Tianjin, and the market is expected to see an increase in supply in the future. The inventory of ports in East China is also high, and overall, there are many negative factors on the supply side. On the demand side, the downstream synthetic rubber market trend is weak, and the downstream wait-and-see mentality is strong, lacking demand support. The butadiene market trend is weak this week.

Recently, the styrene market has been weak and fluctuating. The performance of crude oil in the far end of the range is average, and the direct raw material pure benzene market has seen a narrow increase in momentum, making it difficult to provide further cost support for styrene. In addition, due to the impact of inventory replenishment at various ports, the loose supply trend has provided moderate support for the spot market. Businesses are concerned about the lack of market drivers and tend to be cautious when placing orders.

On the demand side: In mid November, the main terminal demand for ABS continued to be weak, and the market sentiment remained strong this month. Although the “Double Eleven” shopping festival and subsidy policies have stimulated the sales of some terminal products, the overall load position of home appliances and other factories has limited recovery, and the willingness of terminal stocking is not strong. Purchasing operations are mainly based on weak rigid demand to maintain production, which can barely maintain the balance between domestic consumption and inventory. Merchants have insufficient willingness to establish warehouses, and their offers are subject to market conditions, resulting in average activity in the circulation of goods. Overall, the demand side does not provide significant assistance to the market.

Future forecast

The domestic ABS market remained volatile and organized in mid November. Upstream three materials showed mixed ups and downs, providing average comprehensive support for ABS cost side. The load of ABS polymerization plant continues to rise, and finished product inventory remains high and sideways. The weak demand on the demand side is difficult to change, and market trading is sluggish. The pattern of strong supply and weak demand in the market has not changed. It is expected that the ABS market will remain weak in the short term in the future.