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.