In the first half of 2023, Adipic acid rose at the beginning of the year, and then began to fluctuate and decline. According to the commodity market analysis system of the business community, Adipic acid fell by nearly 10% in the first half of the year. The price dropped from 11000 yuan at the beginning of the year to 9000 yuan at the end of June. The main reason is the contradiction between supply and demand and the decline in costs.

Industrial chain

In the first half of 2023, all products in the Adipic acid industry chain will decline, with an average decline. The upstream product Cyclohexanone had the largest decline, exceeding 12%, while Adipic acid and downstream PA66 had a decline of nearly 10%.

Specifically

In January, the upstream raw material pure benzene increased, resulting in good cost benefits; The supply side is tight, and low market inventory provides support. Adipic acid was the only market in the first half of the year.

In March and March, Adipic acid continued to decline, mainly due to increased supply and relatively low demand. Haili, Taihua, and Shenma have all resumed their dual line operations, with significant increases in supply and a significant oversupply in the market. But there is no significant growth point on the demand side. The imbalance between supply and demand has led to a continuous decline in prices.

In the first ten days of April May, the price of Adipic acid temporarily stopped falling and rebounded slightly. The main reason is that cost benefits have boosted and supply pressure has eased. Upstream pure benzene took the lead and saw a significant increase in prices in early April, with a nearly 4% increase in the first week of April. The overall operating rate of superimposed Adipic acid decreased slightly, the supply decreased slightly, and the supply pressure was relieved.

Since the middle of May, Adipic acid has returned to the downward channel, mainly due to the exhaustion of cost advantages and the weak continuity of supply and demand. Upstream pure benzene experienced a significant decline in May, with a monthly decline of 11.75%. Supply side: Due to the frequent resumption of plant work and increased supply pressure, the overall operating rate has slightly rebounded, rising from 50% in April to 6.5%. However, the demand side is exceptionally sluggish, and downstream factories are cautious in picking up goods, with no volume of orders, ensuring normal start-up demand. Terminal demand has not really improved. The weak market has been postponed until the end of June.

Future prospects

With regard to the future market, Adipic acid analysts from the business community believe that, on the cost side, the United States may still raise interest rates twice in the second half of the year, and the macro side is still suppressed. Under the game of tight supply and slow demand, the upstream crude oil may maintain a neutral price. This will have a certain price suppression on domestic petrochemical products. In the second half of the year, pure benzene or Cyclohexanone in the upstream of Adipic acid may not have a big market.

From both sides of supply and demand: on the supply side, the operating rate of Adipic acid currently remains between 65-70%, which is higher than that in the first half of the year. In the second half of the year, it is expected that manufacturers still have maintenance plans, especially in August and September, routine maintenance will increase, and the operating rate of manufacturers will change greatly. It is expected that the lowest operating rate will be 50%. On the demand side, from the end of the third quarter to the beginning of the fourth quarter, the market will also open up for the traditional peak season, Therefore, it is expected that there will still be an opportunity for the market to rise in the second half of the third quarter. It is expected that by the end of the fourth quarter, the market will gradually return to neutrality and prices will moderately seek downward space. On the whole, it is expected that Adipic acid will go out of the market of rising first and then falling in the second half of the year.

1、 Price trend

According to the Commodity Market Analysis System of the Business Society, the price of bromine has slightly increased this week. On July 3rd, the average market price of bromine was 18000 yuan/ton. On July 7th, the average market price of bromine was 18200 yuan/ton, with a price increase of 1.11% and a year-on-year decrease of 68.75%. On July 6th, the bromine commodity index was 63.86, an increase of 0.7 points compared to yesterday, a decrease of 73.95% from the cycle’s highest point of 245.18 points (2021-10-27), and an increase of 8.38% from the lowest point of 58.92 points on October 29th, 2014. (Note: The cycle refers to the period from September 1st, 2011 to the present)

2、 Market analysis

Bromine prices have slightly increased this week. The mainstream market price in Shandong region is around 17500-18500 yuan/ton, but the overall market is stable with minor fluctuations. A large bromine enterprise in Shandong province has been shut down for one week for maintenance. However, the overall trading atmosphere in the bromine market is light, with no significant increase in downstream support. Recently, the flame retardant and intermediate industries are still mainly purchasing according to demand, and the attitude of the bromine industry is generally average. The price adjustment of bromine enterprises is mainly supported by costs, and downstream manufacturers are buying at a moderate price.

In terms of raw materials: The domestic sulfur market is on the rise, with an average market price of 713.33 yuan/ton on July 3rd and 730 yuan/ton on July 7th, with a price increase of 2.34% and a year-on-year decrease of 76.95%. The inventory of manufacturers is maintained rationally, downstream demand is insufficient, and the enthusiasm for purchasing in the market is not good. A small amount of trading is followed up according to demand, and the market negotiation atmosphere is weak. The sulfur market is on the sidelines.

It is predicted that the price of bromine will stabilize slightly in the near future, and the upstream sulfur price will rise. The demand for downstream flame retardants and intermediates in the bromine industry will continue to be average in the near future. Bromine enterprises will adjust their prices slightly due to cost support, and the overall operation of the industry will be mainly on a wait-and-see basis. Based on the comprehensive supply and demand game, it is expected that the short-term bromine price will consolidate and operate, depending on the downstream market demand.

1、 Price data

According to the commodity analysis system of the business community, as of June 30, the average ex factory price of domestic local refining and hydrogenation Naphtha mainstream was 7729.00 yuan/ton, up 1.81% from 7589.00 yuan/ton at the beginning of this month, and the local refining and hydrogenation Naphtha fell after rising.

As of June 30, the average ex factory price of domestic straight run Naphtha mainstream was 7611.50 yuan/ton, up 3.78% from 7334.00 yuan/ton at the beginning of this month, and the local straight run Naphtha fell after rising.

On June 29, the Naphtha commodity index was 96.62, down 0.96 points from yesterday, down 20.57% from the cycle’s highest point of 121.64 (2022-03-10), and up 128.74% from the lowest point of 42.24 on July 19, 2016. (Note: The cycle refers to the period from September 1st, 2012 to the present)

2、 Analysis of influencing factors

Product: In June, the price of locally refined Naphtha rose first and then fell. At present, the mainstream price of locally refined hydrogenated Naphtha is about 7700-7900 yuan/ton, and the mainstream price of straight run Naphtha is about 7600-7800 yuan/ton. In the first ten days of June, the terminal was reformed and ethylene was released in a centralized way. The terminal of Naphtha market just needed support. The market turnover was good and the refinery actively pushed up. In late June, the restructuring and ethylene demand continued to be weak, with light market trading and refineries reducing prices for shipments. As of the week ending June 27th, Singapore’s fuel inventory increased by 1.859 million barrels, reaching a two-week high of 20.394 million barrels. Singapore’s medium distillate oil inventory increased by 248000 barrels, reaching a two week high of 7.98 million barrels. Singapore’s light distillate oil inventory decreased by 105000 barrels to a nearly six-month low of 14.626 million barrels.

Upstream: The international crude oil market fluctuated in June. On the one hand, based on the global economic situation, the Federal Reserve announced that interest rate hikes have not yet ended and will not cut rates. Macroeconomic pressure has increased, putting pressure on the oil market. On the other hand, OPEC+has announced two production cuts, coupled with the increase in China’s refining and processing volume, which has boosted international oil prices. The demand during the summer oil peak season has supported, and the international oil price market has been boosted.

Downstream: The price of toluene fluctuated and declined in June. On June 1st, the price of toluene was 7150 yuan/ton, and on June 30th, it was 7060 yuan/ton, a decrease of 1.26%. In June, the price of mixed xylene fluctuated and decreased. On June 1st, the price of mixed xylene was 7430 yuan/ton, and on June 30th, it was 7340 yuan/ton, a decrease of 1.21%. The price of P-Xylene rose slightly in June. As of June 30, the ex factory price of P-Xylene in China was 8250 yuan/ton, up 0.61% from 8200 yuan/ton on June 1.

3、 Future Market Forecast

According to the energy analysts of the business society, recently, Naphtha terminal of local refining has been restructured, ethylene demand has continued to be weak, market turnover has been light, and refineries have reduced prices for shipment. It is expected that Naphtha of local refining will decline slightly in the near future.

In June 2023, the price of viscose staple fibers remained stable and slightly decreased, and the entire industry chain was operating in a weak position. Prices fell, resulting in poor demand performance. Downstream cotton yarn factories had weak purchasing power, and bearish sentiment continued to decline. There were not many actual transactions, and the overall market was waiting for the introduction of price policies from high-end manufacturers. Except for some factories with inventory pressure, other manufacturers are relatively controllable. The price of raw material Dissolving pulp has weakened, and the overall cost support has weakened. The downstream cotton yarn trading has slowed down, and the production enthusiasm of the yarn factory is not high due to losses. The price center has slightly declined, and the overall operating load has a downward trend.

Viscose staple fiber price trend chart

According to the Commodity Market Analysis System of Business Society, the price of viscose staple fiber remained stable and slightly decreased in June. As of June 30th, the domestic factory quotation for 1.2D * 38mm viscose staple fiber was 13220 yuan/ton, a decrease of 140 yuan/ton from the beginning of the month, with a monthly decrease of 1.05%.

Raw material market

In June, the price center of raw material Dissolving pulp weakened. Domestic Dissolving pulp: two manufacturers in Shandong and Hunan produced broadleaf Dissolving pulp. The price of imported Dissolving pulp has been lowered. The transaction of broad-leaved Dissolving pulp is 870-880 dollars/ton, and that of coniferous Dissolving pulp is 880 dollars/ton.

Downstream cotton yarn market

Chart of the price trend of human cotton yarn

The downstream demand for human cotton yarn is light, and the shipment of yarn factories is slowing down, especially for ring spinning and vortex spinning. The overall negotiation space has increased, the market has weakened, prices have declined, and transactions are average. The pressure on product inventory is gradually increasing, and the overall operating load has a downward trend. Under inventory pressure in some enterprises, there is a phenomenon of price reduction and promotion. According to the Commodity Market Analysis System of Business Society, as of June 30th, the average ex factory price of human cotton yarn (30S, ring spinning, first-class products) was 17400 yuan/ton, a decrease of 166 yuan/ton compared to the beginning of the month. At present, it is difficult for the demand in the textile terminal market to significantly improve, and yarn enterprises are also difficult to have a strong position. They often adjust their negotiation space based on their own shipment situation.

Future Market Forecast

The overall buying and selling atmosphere in the short-term market is difficult to improve, and costs are weakening. Without significant improvement in terminal demand, the market will enter a wait-and-see adjustment period. The market is bearish in July, and analysts from Business Society predict that the market for viscose staple fibers and rayon yarn will be weak, stable, and volatile in the short term.