A brief summary of the annual rise and fall of chemicals

A brief summary of the annual rise and fall of chemicals: an end-of-year stocktaking and outlook for the chemical market

Disturbed by the geopolitical crisis, the Fed's interest rate hike, recessionary concerns and the impact of the new crown epidemic, the chemical market in 2022 showed a general trend of first up and then down.

The first half of the year was mainly affected by the Russia-Ukraine conflict, with high crude oil prices driving up the overall price level of chemicals. However, the domestic new crown epidemic suppressed demand, while overseas export orders decreased, resulting in poor cost downward transmission. In addition, the Federal Reserve's sharp interest rate hike triggered a plunge in commodities, and in June, along with the high dive in crude oil prices, chemical prices fell back sharply.

Cost pressure eased in the second half of the year, into the traditional peak consumption season, the chemical market showed a bottoming out after rebound. However, the domestic and overseas economic growth slowed down, while the domestic many places by the epidemic factors disturbed, the demand side performance is weak, the degree of prosperity of the chemical market fell again, generally showed a significant downward trend. At the end of the year, the recovery was expected to be enhanced after the optimization of prevention and control policies, and the downstream stage entered the market for stocking, but at the beginning, with the increase in the number of people infected by the epidemic, the recovery of consumption was inhibited, and the chemical market generally showed oscillating operation.

Chemical network monitoring of 64 important chemical products, this week, up 17 products, accounting for 27%; down 46 varieties, accounting for 71% The top three declining products were BDO (↓68.36%), DMF (↓63.4%), methylene chloride (↓60.17%).

Annual chemical gainers list:

Annual Chemical Decline List.

Up List.

Butadiene: Domestic butadiene prices rose and then fell in 2022. The annual average price of butadiene in 2022 was around RMB 8,527/tonne, with a low point of RMB 3,900 in early January and a high point of RMB 12,400/tonne in June, taking the delivery price in East China as an example. In the first half of the year, domestic butadiene market prices continued to move upwards. 2021 After some new production capacity was released centrally at the end of the year and butadiene prices fell to a certain low level, theoretical profits in the downstream industry enlarged and some downstream installations restarted, increasing the demand for butadiene. A positive demand side boosted market prices to the upside. In March, crude oil rose sharply, leading to high cost support and a rise in butadiene prices. And in June, some unplanned stoppages of units boosted the market higher to a high point during the year. However, domestic demand continued to be weak and the industry chain terminals brought a significant drag on the market. In the second half of the year, with the launch of new production capacity of ZPMC II and Satellite Chemical, the supply of butadiene continued to increase and the market was mainly under pressure to the downside. At the end of the year, some of the new production capacity release is not as expected, coupled with the continued upward movement of the foreign market, boosting the mood of the domestic market, butadiene prices stopped falling and rose.

O-benzene: In 2022, the domestic o-benzene market trend amplitude is obvious, which is divided into 3 waves of more obvious up and down trend. In the first quarter, the centre of gravity of the o-benzene market pulled up quickly, including January 1, 2022 o-benzene up by 100 yuan to implement 6400 yuan / ton, the opening of the year under the situation, o-benzene market all the way up to March, o-benzene prices have risen to 9000 yuan / ton, an increase of up to 40.625%. O-benzene prices rose rapidly, the main factors on the one hand, the o-benzene spot supply level is not high, the terminal sources are also limited, and the downstream phthalic anhydride continued to rebound, the demand for o-benzene has increased; April-May, o-benzene market into the retracement phase, prices fell to 8200 yuan / ton, a drop of 8.88%. The fall in phthalic anhydride is basically a complementary fall in the impact of the fall in phthalic anhydride, which has limited room for decline. To the middle of June, o-phthalmic benzene prices rose to 9300 yuan / ton, this increase of 13.4%, the main driving factor is still o-phthalmic benzene spot tight, especially in part on the basis of overhaul news released in advance, coupled with the high price of isomeric xylene, resulting in o-phthalmic benzene own cost pressure is also present, so Sinopec side actively raised. But the main downstream ophthalmic phthalic anhydride is also upside down obviously, resistance to ophthalmic benzene is obvious under the downward trend is also suppressed ophthalmic benzene, to mid-August, ophthalmic benzene prices fell back to 8000 yuan / ton, down 14%. To mid-October, o-benzene prices rose to 9600 yuan / ton, which is the highest point in the year, this rise of 20%. The upward trend is the root cause still lies in the goods less. Terminal o-phenyl basic no goods, Sinopec supplies basic for downstream phthalic anhydride manufacturers to lock the supply, the market circulation of limited supplies, so Sinopec has a higher discourse, superimposed on the same cycle of o-phthalic anhydride release good, the performance is more bright. Since the end of October, phthalic anhydride market again into the downward trend, the current price of 7800 yuan / ton, has been deadlocked for a certain period. O-phthalic benzene still less goods, downstream ophthalmic phthalic anhydride profits are not good, to o-phthalic benzene just demand and resistance. It is expected that the short term o-benzene market is mostly maintained sideways.

TDI: 2022 price trends throughout the year oscillating operation, the front of the small half-year continuation of a small decline, the back of the majority of a long period of time after a significant increase in the high level of oscillation. As of December 31, the price of barrels out of Shanghai in East China was oscillating around 19,000 yuan/ton, and the price of barrels out of domestic goods was at 18,400-18,500 yuan/ton. The average price of TDI in 2021 was RMB 14,556 per tonne and the average price of TDI in 2022 was RMB 18,405 per tonne, up RMB 3,849 per tonne from 2021. (Take the price of Shanghai sources in East China as an example).

In the first phase of 2022 (January-March), the market ushered in the "open door", with prices rising sharply and then shaking at a high level. The market was affected by a 60% discount on supply from a factory in Shanghai, a delay in restarting a plant in Fujian and a sold-out contract volume in January, which resulted in no low-priced sources in the trade market.

In the second phase of 2022 (March-July), the downward channel of the market opened, and the occasional rebound was eventually suppressed. Domestic epidemic continued to emanate, downstream demand suffered a heavy blow, even though the supply side of many parking / overhaul good, did not form an effective support for the market, many areas of domestic logistics and transport is still obstructed, slow cargo transportation cycle, intermediaries pessimistic mentality, speed up the speed of shipments, the market trading centre of gravity continued to fall, however, downstream demand recovery is limited, and in the traditional off-season, the overall is still weak, the market rebound is weak, the domestic TDI market reached the low point of the year at the end of July, when the price was around 15,000 yuan/ton (domestic goods in East China market).

The third phase of 2022 (August-December), the market spot continued to tighten, prices jumped sharply into August, the TDI market into a strong upward channel, the supply side of the good become the biggest favorable support for this round of price increases. With domestic and foreign supply-side good to come, in foreign devices force majeure, domestic distribution market low discount supply/suspension of orders, factory guide prices continue to rise and other good positive support, TDI prices climbing rapidly, due to the market spot supply is tight, on the middle and lower reaches of the inventory are limited, coupled with the export side is better, although the end demand recovery is limited, but the market upward momentum is still strong, prices are constantly The price jumped up, and the middlemen sold at low prices, and the offer followed the factory to keep rising.

Decline list.

BDO: 2022 domestic BDO trend is "M" type, the overall performance is bright. As of December 31, the price of barrels in East China was oscillating around RMB9,500-9,700/tonne. The low point of the year occurred in mid-August when it closed at around RMB9,900/tonne, and the high point of the year occurred at the end of January when it closed at around RMB30,500/tonne. January-December 2021 average BDO price was RMB25,029/tonne, and January-December 2022 average BDO price was RMB18,588/tonne, down RMB6,441/tonne from 2021 (taking the price of sources in East China as an example).

The first stage in 2022: i.e. January-early June, BDO rises broadly and then falls back. The BDO market rose broadly after the plant started working at a low rate and supply was tight. Some downstream load reduction or parking maintenance to cope with high costs, the overall demand decline, BDO shipping pressure to enhance, prices fell, factory supply tension eased, downstream resistance to high prices, into May - early June, BDO downstream only PTMEG performance is still good, the rest of the PBT and other overall underemployment, market demand is relatively weak, BDO market continued to fall, BDO plant maintenance news The news of BDO plant overhaul was released continuously, and continued to make profits for shipping.        

The second phase is: late June - the end of December. late June favorable factors superimposed, factory overhaul news gradually increased, the market atmosphere gradually improved, the price stopped falling rebound. in August BDO continued to fall, as the device continues to restart, the spot supply tension gradually eased, some profit-making disc continued to give out, BDO prices rose slightly. in September the market momentum finishing, prices rose. The BDO market was running smoothly in October, with domestic supply shrinking during the month, coupled with the epidemic, slightly delayed transport in the northwest, and tight spot in bulk water. In December, the BDO market was stable and slightly upward, with strong support from the supply side, tight spot supply and high bidding prices in the market, with the supply side holding back prices.

DMF: In 2022, the domestic DMF market showed a significant downward trend against the backdrop of growing production capacity and weakening demand. Throughout the year, the market in Jiangsu ran in the range of RMB 5,400-17,200 per tonne delivered on exchange, with an oscillation of up to RMB 11,800 per tonne. The lowest point appeared in early December and the highest point appeared in late January. According to statistics, the average market price in Jiangsu from January to December was RMB11,773/tonne, down about 9% compared to the average price of RMB12,949/tonne in 2021.

In the first quarter, the DMF market price level was generally running high. Before the Spring Festival holiday, in the environmental protection policy impact of supply contraction, demand to enhance the background, prices showed an upward trend, East China market prices rose to a maximum of 17,200 yuan / tonne accept delivery, after the holiday market is more shocking trend. However, after entering March, the domestic epidemic multi-point proliferation, many control measures to upgrade the logistics and transport and end consumption caused by inhibition, the domestic DMF part of the main production enterprises inventory level to enhance, reduce prices to increase the intention to ship, DMF market gradually into the downward channel, until mid-April, the cumulative price decline of more than 2800 yuan / ton, then the factory to reduce the start-up load, the supply side pressure has been reduced, the downstream Phase into the market to replenish support, the market opened a wave of rebound momentum. However, many places are affected by public health events, transport restrictions, the current demand has not fully recovered, there is still resistance to the downward transmission of costs, the market in May and June generally showed a shaky running trend.

Into the third quarter, Anhui Jinhe 30,000 tons / year device and Jiujiang Heart to Heart a 100,000 tons / year device successively put into production, DMF market ushered in a wave of new production capacity into production, resulting in supply pressure to enhance the market, bringing pressure on the DMF price gradually fell below the high level of 10,000 yuan. And the end demand recovery is slow, the DMF market in the fourth quarter, the bearish atmosphere continues, the market most of the time showing a downward trend, in December, as the epidemic prevention policy gradually into a new phase, the confidence of the market operators have improved, and near the end of the year, pre-holiday stockpiling overlapping social surface inventory is low, demand briefly released, supporting the DMF price rebound. By the end of December, Jiangsu market prices refer to 6000-6100 yuan / ton near the acceptance to deliver, compared with the beginning of the year prices fell about 10400 yuan / ton.

Dichloromethane: 2022 domestic dichloromethane market oscillation downward. The market fluctuated frequently in the first quarter, and in January the market as a whole went down broadly due to the recovery of the pre-servicing units and the continued weak performance of the demand side. After the Chinese New Year, logistics and transportation resumed, and the downstream replenished its stocks, and in the middle of the year, the market negotiated a higher centre of gravity than before. However, as prices rise, the downstream high resistance, demand constraints on the market centre of gravity continued to move down to the beginning of March. And then the demand side of the low replenishment, high prices of raw materials, and part of the device overhaul news fermentation, the market bottomed out rebound. At the end of the month, the high market turnover atmosphere gradually turned weak.

From the second quarter onwards, the supply side of the performance of the abundant and the overall demand in the field under the control of limited, the market opened a downward channel. Field supply is loose, and by the impact of the epidemic in the downstream receiving general, the field overall demand to follow up always insufficient, another June cost liquid chlorine fell to a low level, the market continues to move down. By August, after the market fell to a low level, the market mentality has changed, business shipments improved, coupled with some enterprises have reduced the negative parking, another raw material liquid chlorine and methanol in early September strong higher, another September traditional peak season superimposed on the double festival support, intermediaries and downstream take the mood more positive. The market gradually oscillated back up.

In the fourth quarter, the market went down again, the cost was weak, the price of related substitutes fell sharply, demand was weak, market trading was poor, the transaction was down again. By November slumped to a low level for the year, in the second half of the enterprise device maintenance more, during the market supply contraction, but the overall weakness was not reversed. December to take up the end of last month, the enterprise library is not high, and during a number of manufacturers to reduce the negative or parking maintenance, supply shrinkage, another epidemic control loosening, the downstream phase of replenishment of good support, the market has rebounded after the range oscillation operation.

In the U.S. view: crude oil commodity prices on the one hand by the strong dollar trend inhibition, on the other hand, the economic recession on the decline in demand in Europe and the United States will also be a drag. However, the marginal variables of Chinese demand in 2023 are also worthy of attention, and the recovery and improved confidence will lead to energy prices still being supported downwards. As a result, oil prices will maintain a range of oscillating rhythm, the cost side of the chemical market to form a certain support. On the demand side, with the optimization of domestic control policies, economic recovery and consumption end of the repair is expected, the chemical industry boom may pick up, but the repeated new crown epidemic on the market impact still can not be ignored, demand recovery will also exist a certain twist and turn, coupled with the real estate market has a long cycle of inflection point, the recovery is not easy to be overly optimistic, and the world's developed economies are still in recessionary phase, overseas demand showed a decline In addition, the world's developed economies are still in recession and overseas demand is showing a decline, thus inhibiting the scale of exports. In summary, looking ahead to 2023, the domestic bulk chemical market may show a slow recovery and rebound.

 Translated with www.DeepL.com/Translator (free version)