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This August, the price of 70% of chemical raw materials in China surged, price rise still expected

Posted on 2018-09-12
Background
 
China’s second round of an environmental compliance inspection has continued to progress;
A large number of enterprises are being shut down, restricted and rectified;
On August 23, China and the US raised chemical product tariffs on each other;
A violent typhoon caused the shutdown or restricted production of 20 chemical works in Shandong Province.
 
In August, the prices of 50 of 72 kinds of chemical raw materials (66.44%) surged at different levels. The top three products, which saw price rises, were dichloromethane (+21.57%), acetone (+17.11%) and trichloromethane (+15.48%). The top three products that saw reduced prices were epichlorohydrin (-21.41%), hydrochloric acid (-17.79%) and polymeric MDI (-15.95%).
 
A recap of the first half of 2018 showed a drastic price drop of phenol in the first quarter of 2018. In the second quarter, due to issues of an anti-dump investigation and short supply, prices rebounded rapidly, which, however, lasted only for less than one month. The pollution incident in Lianyungang Guanhe in May put great pressure on enterprises in Jiangsu Province, resulting in the strict implementation of pollution control measures in the province, followed by pollution control measures in the provinces of Guangdong, Guangxi, Hunan and Henan. Furthermore, the Sco Summit was held in Qingdao in June, during which demand in Shandong decreased and logistics were restricted, and such a market decline continued until mid-July. In July, vendors started plant maintenance, traders were not willing to sell, suppliers held stocks. Then, higher prices were quoted from the market, which brought about rising prices in August.
 
On August 31, the price of the phenol market continued to rise. At present, the product is selling at sustained higher prices, generating a high level of returns.
 
The market is currently at its traditional low season; together with the stringent environmental compliance inspection being implemented, producers are running at high capacity, and downstream demand is not thoroughly released yet. From the supply side, shutdown for maintenance is being arranged by vendors, which may have an impact on the market, but a price rise is still expected.

 

 

Source: AgroNews