The phthalic anhydride market fluctuated and rose in January

According to the Commodity Market Analysis System of Shengyi Society, as of January 31st, the price of phthalic anhydride in neighboring countries was 7312.50 yuan/ton, a fluctuating increase of 10.80% compared to the price of 6600 yuan/ton on January 1st at the beginning of the month. The production of phthalic anhydride equipment is stable at a low level, and the inventory of phthalic anhydride is low; Spring Festival stocking, downstream demand for phthalic anhydride increases. The price of ortho benzene has risen, the cost of raw materials has increased, and the driving force for the price increase of phthalic anhydride has increased.

Supply side: tight supply of goods

Domestic phthalic anhydride plants operate at low loads, with approximately 60% of phthalic anhydride manufacturers operating at capacity. Phthalic anhydride manufacturers have low inventory levels, resulting in tight supply of phthalic anhydride.

The cost of raw material ortho benzene increased in January

According to the Commodity Market Analysis System of Shengyi Society, as of January 31st, the price of ortho xylene was 7200 yuan/ton, an increase of 7.46% compared to the price of 6700 yuan/ton on January 1st at the beginning of the month. The price of ortho benzene has fluctuated and risen, and the cost of ortho phthalic anhydride has increased. The upward momentum of ortho phthalic anhydride has increased. The price of industrial naphthalene has risen, and the cost of naphthalene phthalic anhydride has increased. The overall cost support for phthalic anhydride raw materials has increased.

Demand side: The DOP market fluctuated and rose in January

According to the Commodity Market Analysis System of Shengyi Society, as of January 31st, the DOP price was 8576.25 yuan/ton, a fluctuating increase of 4.25% compared to the DOP price of 8226.25 yuan/ton on January 1st. Downstream production is at a high level, and the demand for raw material phthalic anhydride is in urgent need of procurement. Prior to the Spring Festival, the replenishment of plasticizer manufacturers has ended, and the demand for phthalic anhydride has increased.

Future forecast

According to the data analyst of Shengyi Society’s phthalic anhydride products, in terms of cost, the price of ortho xylene has fluctuated and risen, the price of industrial naphthalene has risen, and the cost of phthalic anhydride has risen. There is a strong driving force for the increase in phthalic anhydride cost; In terms of demand, DOP manufacturers have high operating loads, coupled with Spring Festival stocking, which provides significant support for phthalic anhydride demand. Overall, with cost support and rising downstream demand, the phthalic anhydride market is on the rise. In the future, with the end of the Spring Festival inventory replenishment, demand has fallen, industrial naphthalene prices have risen, cost expectations have increased, and phthalic anhydride prices have slightly increased.

After the holiday, asphalt inventory remained high and prices slightly decreased. According to data from Shengyi Society, on February 5th, the price of asphalt in Shandong Province was 3663 yuan/ton, with a narrow decrease of about 20 yuan/ton.

During the Spring Festival, international oil prices are running weakly, and OPEC+will gradually increase oil production from April 1st. On February 1st, an additional 10% tariff will be imposed on goods imported from China, raising concerns about the demand outlook for crude oil in the market.

High social inventory. According to statistics, over 100 asphalt companies in China have accumulated over 1 million tons of asphalt inventory, with four consecutive weeks of growth in January. This is mainly due to the concentration and relocation of winter storage resources, leading to the accumulation of social inventory. In addition, during the Spring Festival period, logistics transportation entered a holiday state, and short-term delivery was not smooth, resulting in the accumulation of inventory.

In January, the domestic ABS market remained stable with some gains, and spot prices of some grades increased. According to the Commodity Market Analysis System of Shengyi Society, as of January 31st, the average price of ABS sample products was 11875 yuan/ton, with a price level increase or decrease of+0.32% compared to the beginning of the month.

Fundamental analysis

Supply level: In January, the domestic ABS industry started with an initial increase followed by a decrease, and the industry load increased to 76% in the first half of the year. Subsequently, due to the decrease in load of the Tianjin Dagu plant, the level decreased by about 3% to 73% compared to the first half of the month. The average weekly production within the month is around 120000 tons, and the inventory level of aggregation enterprises has slightly decreased to 160000 tons. The overall pattern of abundant supply of goods remains unchanged, with good pre-sales of petrochemical plants before the holiday, and there will still be some inventory pressure in early February in the future. Overall, the recent supply side has provided average support for ABS spot prices.

Cost factor: Entering January, the trend of ABS upstream materials is relatively strong, and overall support for ABS cost side is still acceptable. The domestic acrylonitrile market remained volatile and rising. The industry has been operating at low load during the month, and it seems that it will take some time for supply to return. Additionally, the industry’s inventory levels are low, and prices are running steadily. Downstream purchasing power has weakened before the holiday, but the overall market performance remains strong at a high level.

The butadiene market has also risen at a high level, and the available supply of goods in the spot market remains tight. Holders of goods have a strong mentality of raising prices. But with the continuous rise of spot prices in the early stage, the downstream high-level receiving ability gradually declines. At the same time, it is expected that the production capacity will increase in early February, and it is expected that butadiene may enter a consolidation market.

Styrene fluctuated in January, with an overall increase. It is common for styrene plants to return to production capacity within the month, while there is also a situation of accumulated cargo upon arrival at the port. However, the supply was tight in the early stage, and there was a tug of war between long and short positions in the market. At the same time, crude oil prices rose in the second half of the month, and styrene was boosted by the far upstream, resulting in a strong price trend.

In terms of demand, the export demand for some front-end household appliances in the terminal sector has been fully released before the January holiday, and downstream purchasing power has weakened during the Spring Festival period. The terminal factory is on vacation, and the overall load position has fallen. In the latter half of the year, some terminal enterprises were stimulated by the rise in ABS cost values and entered the market to purchase and replenish orders, with a bias towards pre holiday warehouse building. In addition, with the extension of the national subsidy policy for household appliances to stimulate the market, terminal products in the future may continue to receive policy support. Overall, the demand side has slightly improved its market support.

Future forecast

The domestic ABS market rose in January. The upstream three materials are operating relatively strongly, which provides sufficient comprehensive support for the cost side of ABS. The load variation of ABS polymerization plant is limited, and there is still pressure on the supply side. The demand side is mainly driven by essential needs, with some pre holiday warehouse construction projects entering the market. Business analysts believe that the ABS market in early February may continue to stabilize in the short term, with unemployed individuals returning to the market.

The price of ethylene glycol first rose and then fell in January

In January 2025, the price of ethylene glycol first rose and then fell. According to data from Shengyi Society, as of January 24th, the average price of domestic oil to ethylene glycol was 4711.67 yuan/ton, an increase of 0.5% from the average price of 4688.33 yuan/ton on January 1st. Recently, the price of ethylene glycol has slightly fallen.

As the Spring Festival approaches, spot contract traders have weak trading, and receiving traders are cautious and afraid of high prices. They do not receive many goods, and market trading is average. The contract basis quotation is relatively stable, with a range of+27 to+28 in mid February and+33 to+34 in lower February.

In terms of external ethylene glycol, the landed price in China on January 23 was $550/ton, and the landed price in Southeast Asia was $561/ton.

Reasons for the recent weakening of ethylene glycol prices

1. The inventory data is low, but the arrival at the port has rebounded, and there is a certain accumulation of inventory data at the port. Coupled with the approaching Spring Festival holiday, the expectation of accumulated inventory caused by imported goods arriving at the port during the holiday is relatively strong.

2. Downstream polyester production may be affected by the operating rate of terminal demand, resulting in a downward shift.

According to the data monitoring system of Shengyi Society, on January 1, 2024, the domestic market price reference for silicon metal # 441 was 15620 yuan/ton. On December 31, 2024, the market price reference for silicon metal # 441 was 11690 yuan/ton, with a price reduction of 3930 yuan/ton or 25.16% for the year.

From the trend of the domestic silicon metal market for the whole year of 2024, it can be seen that the spot market for silicon metal will experience a significant decline in 2024. Throughout the year, in the early stages of the year, downstream users have a certain demand to replenish inventory, and the market is at a relatively high level. After the demand ends, the silicon metal market enters a downward channel, and the market center of gravity moves towards a lower level. At the end of the year, taking the spot market situation of silicon metal # 441 as an example, the market price has fallen to around 11500 yuan/ton, a decrease of nearly 4000 yuan/ton compared to the beginning of the year.

The influencing factors of the 2024 silicon metal market:

The metal silicon market will continue to decline in 2024, mainly due to “supply-demand mismatch and intensified contradictions”.

Throughout 2024, the overall performance of the metal silicon market supply side is in an oversupply state, and the supply side has always been under pressure. At the beginning of 2024, after downstream users restocked, the “supply-demand contradiction” problem in the metal silicon market became more prominent. Faced with weak downstream demand, high inventory and shipment pressure in the market continued to decline, and market prices continued to decline. The market has a high production and supply pattern, downstream demand has been continuously reduced and fermented, demand has continued to be negative feedback, market pessimism has intensified, and the market continues to decline. Therefore, under the influence of factors such as supply pressure, insufficient demand drive, and macro factors, the metal silicon market has repeatedly hit new lows.

Let’s take a look at the trend of the silicon metal market in 2025?

1、 Introduction to Metal Silicon

Metallic silicon, also known as crystalline silicon or industrial silicon, is an important industrial material mainly used as an additive in non-ferrous alloys. Metallic silicon is mainly smelted from quartz and coke in an electric furnace. Its main component is silicon element, with a content of about 98%. Other impurities include iron, aluminum, calcium, etc.

According to the national standard for industrial silicon (GBT 2881-2014), industrial silicon is divided into specifications such as Si1101, Si2202, and Si3303 based on the differences in the content of three main impurities (iron, aluminum, and calcium). The industrial silicon grade is represented by a silicon element symbol and a 4-digit number. The 4-digit number sequentially indicates the maximum content requirements of the main impurity elements iron, aluminum, and calcium in the product. The iron and aluminum contents are taken as one decimal place, and the calcium content is taken as two decimal places. ‌

2、 Metal Silicon Industry Chain

The upstream of China’s industrial silicon industry chain mainly includes silica, reducing agents (charcoal, coal, etc.), graphite electrodes, methanol, hydrogen chloride, electricity, etc; The midstream is for industrial silicon production and manufacturing, with key enterprises mainly including Hesheng Silicon Industry, Oriental Hope, Xiexin Group, Dongyue Group, and Xin’an Shares; The downstream mainly includes silicon aluminum alloy, organic silicon, polycrystalline silicon, single crystal silicon, etc. Industrial silicon has a wide range of downstream applications and can be used to produce downstream products such as organosilicon, aluminum alloys, and polycrystalline silicon. Among them, polycrystalline silicon is the core raw material of the photovoltaic industry, organic silicon is widely used in fields such as construction, automotive, and electronics, and aluminum alloy is mainly used in industries such as aerospace and automotive manufacturing.

Industrial silicon is also used in various fields such as the information industry and new energy. The different demands for industrial silicon products in these fields have prompted the industrial silicon industry to continuously develop new products and improve product quality to meet the diverse needs of downstream industries. For example, due to its unique properties, organosilicon has been widely used in various fields such as electronics, electrical, construction, transportation, and chemical engineering, which has prompted the industrial silicon industry to continuously innovate and improve the production of organosilicon products.

3、 Production capacity of silicon metal

In 2024, new production capacity will be released in China’s silicon metal market. By 2024, China’s silicon metal production capacity will reach 7.31 million tons, an increase of 300000 tons or 4.3% compared to 2023. Mainly involving enterprises such as TBEA, Qiya, Baofeng, Tongwei, etc., the projects are mainly focused on integrated upstream and downstream production capacity. It is expected that by 2025, there will still be some new production capacity for metallic silicon in China, mainly including Trina Solar, Tongwei, Xin’an (Yanjin), Yongchang Silicon Industry, and Qiya, but the pace of production may be significantly slower than expected. Despite the existence of new production capacity, the overall operating rate of the market may not be significantly improved due to the sluggish industry atmosphere. In addition, while new production capacity is put into operation, the operating rate of old production capacity may be lowered.

4、 Production of silicon metal

In 2024, the overall production of silicon metal in China has increased significantly, reaching a historic high. The improvement of operating rate is the main driving force for the production growth. From January to November 2024, China’s silicon metal production was about 4.567 million tons, an increase of 1.116 million tons or 32.3% compared to the same period last year. In 2025, although production capacity has been released to some extent, the overall operating rate of the silicon metal market may not be significantly improved due to the continued downward trend of the market in 2024.

Therefore, it is expected that by 2025, the production of metallic silicon in China will be basically the same as or slightly higher than in 2024, and the probability of significantly exceeding the production in 2024 is relatively low.

5、 Supply side: Excess supply of metallic silicon will still exist in 2025

In 2024, the spot market for metallic silicon showed oversupply throughout the year, putting pressure on the supply side. The pressure mainly comes from the production scheduling push in Xinjiang region. From January to October 2024, the construction in Xinjiang region continued to be at a high level, and the output reached a new high for the year. The southwest region is affected by the dry season, and although there is a low level of construction, the overall construction in the northwest region is relatively high, which can be compensated by the southwest region. In addition, after entering the wet season, construction will return to a high level. Therefore, in 2024, the expectation of reduced production of silicon metal is not good, and the overall market supply is under pressure.

In 2025, there will still be some new production capacity released on the silicon metal supply side, and it is expected that the overall market supply will further increase. The state of oversupply will still exist, but it remains to be seen whether the newly added production capacity can be effectively released due to the low prices of oversupply in the current market.

6、 In terms of demand, there may be a slowing trend in the demand boost by 2025

In 2024, the overall performance of downstream demand in the silicon metal market is poor. In 2025, the downstream polycrystalline silicon market demand may become the main growth point for the demand for metallic silicon. The release of new polycrystalline silicon production capacity will drive the overall demand for metallic silicon to increase. However, with the low-carbon policy reform in 2025, it may be difficult to put some of the newly added downstream production capacity into operation, and some of the existing production capacity has plans to reduce production. Therefore, the downstream polycrystalline silicon demand for metallic silicon will increase narrowly in 2025. The growth rate of downstream photovoltaic industry has slowed down, coupled with the optimization and integration of production capacity in some industrial chains, the demand for metallic silicon has also shown a narrow increase. In terms of downstream organic silicon, the organic silicon market has already passed the peak period of concentrated production capacity release. The organic silicon market is expected to recover steadily in 2025, and there may be some increase in demand for raw material metal silicon. However, due to the average performance of terminal real estate, the overall demand feedback for organic silicon is generally average, and the overall incremental boost is expected to be limited., We still need to pay attention to the improvement of supply and demand in the future.

7、 Summary

Looking ahead to 2025, the overall performance of the domestic silicon metal market is characterized by a dual increase in supply and demand. Due to the significant seasonal variability of the silicon metal market, there is a high degree of adjustment in the operating rate of the market. Therefore, it is difficult to clear the production capacity of silicon metal throughout the year, and the overcapacity in the market will continue, which will have a certain constraining effect on market prices.

Entering 2025, it is expected that during the dry season, there will be no significant accumulation of metal silicon inventory, and market prices will fluctuate at a relatively high level. With the arrival of the wet season and the release of some new production capacity, the overall supply pressure in the market will increase, and the market situation will experience a pullback and fluctuate at a medium low level. More attention should be paid to changes in the supply and demand side.