Recent trends in urea prices

In May, the overall domestic urea market showed a fluctuating upward trend. Affected by supply tightening and an increase in factory orders, urea prices have continued to rise, and the upward trend has continued until the third week after May Day. In the last week of May, the market stopped rising and slightly declined. According to the Commodity Analysis System of Business Society, the price of urea in Shandong Province increased from 2435 yuan/ton at the beginning of the month to 2493 yuan/ton at the end of the month, with a growth rate of 2.36%.

From the supply side, the average operating rate of urea enterprises this month is less than 80%, and the daily production of urea in China is about 180000 tons, with supply slightly narrowing compared to last month. During the month, the mainstream urea manufacturers in Shandong generally saw an increase in factory prices, with an overall increase or decrease of over 100 yuan/ton.

From the upstream market perspective:

Liquefied natural gas: The price of natural gas rose in May. According to the Commodity Market Analysis System of Business Society, as of May 31, the average price of liquefied natural gas in China was 4414 yuan/ton, which is 4356 yuan/ton compared to the average price on May 1. The increase in domestic liquefied natural gas prices this month was 1.33%. High natural gas prices provide support for downstream urea production.

Coal: Coal has been operating strongly this month. Taking thermal coal as an example, according to the commodity market analysis system of Business Society, the overall price of thermal coal increased in May. The price of thermal coal in the port market has increased, and the daily consumption of power plants has basically returned to pre holiday levels. Especially in the latter half of the year, the price increase was driven by the rise in coal prices from production areas, resulting in an increase in port coal prices. It is also because as the temperature rises and the peak sales season arrives, downstream demand increases, driving up coal prices. Some traders have expectations for an increase in coal prices and are hesitant to sell, but actual downstream demand is limited. The overall price of thermal coal is currently fluctuating in the market. The upward trend in upstream coal prices provides support for the urea market.

Liquid ammonia: In May, the domestic liquid ammonia market was mainly volatile and rising, breaking out of a trend of first rising and then falling. According to the Commodity Market Analysis System of Business Society, liquid ammonia recorded a growth rate of 3.91% in May. At the end of the month, the mainstream quotation in Shandong region is between 3000-3200 yuan/ton. The rising price of liquid ammonia provides support for the downstream urea market.

From the perspective of downstream demand: the peak season of agricultural demand has been postponed, while industrial demand is average. Downstream demand for replenishment continues. The production of compound fertilizers is advancing, and there is a high demand for agricultural fertilizers in central and eastern China. The surplus temperature during the peak demand season has not yet subsided. Support the maintenance of relatively high levels of urea prices. The shipment volume of urea manufacturers is at a high level, with prices generally rising. According to the Commodity Market Analysis System of Shengyishe, as of May 31st, the average price of melamine enterprises was 7000.00 yuan/ton, a decrease of 0.36% compared to the price on May 1st.

Future Market Forecast

On the supply side, some devices are expected to start production and there is room for improvement in production. It is expected that the daily urea production will continue to rise next week, so it is not ruled out that the supply will increase in the future. However, considering the current low inventory rate of manufacturers, the supply pressure will be relatively eased in the short term.

On the demand side, agricultural demand remains primarily in demand, with an increase or decrease in demand due to a decrease in downstream compound fertilizer production rates and a slowdown in downstream delivery. In addition, the agricultural fertilizer preparation node has not yet arrived, and the next two weeks are in a period of agricultural demand gap, and the centralized procurement period has not yet arrived.

Taking all factors into consideration, the recent increase in urea prices lacks momentum, and it is not ruled out that there may be a possibility of price decline.

According to the Commodity Market Analysis System of Business Society, sulfur prices in East China continued to decline in May. On May 31st, the average ex factory price of sulfur in the East China region was 1056.67 yuan/ton, a decrease of 10.70% compared to the average ex factory price of 1183.33 yuan/ton at the beginning of the month.

This month, the sulfur market in East China has been weak and declining. The main reason is weak downstream demand and weak market trading, leading to a continuous decline in sulfur quotations. On the supply side, the sulfur unit on site is operating normally and the market supply of goods is stable; On the demand side, some of the main downstream factories have undergone maintenance, with low operating rates and limited demand for sulfur. The market trading atmosphere is not good, and the shipment of sulfur refineries is limited. In order to stimulate purchasing enterprises to continuously lower their prices, the trend of sulfur continues to be weak due to the sentiment of buying up but not falling down.

The downstream sulfuric acid market stabilized at a low level in May, with a market price of 272.50 yuan/ton at the beginning of the month and 247.50 yuan/ton on May 31, a decrease of 9.17% during the month. The inventory of goods during the May Day holiday has increased, and manufacturers have a strong intention to arrange inventory after the holiday. Manufacturers have lowered their prices to stimulate shipments; In the middle and late half of the year, there was a shortage of new orders in the downstream compound fertilizer industry, limited support for sulfuric acid demand, and poor shipments from acid companies. During this period, some regions experienced a slight increase in sulfuric acid prices due to equipment maintenance and low inventory levels, but there was a clear supply-demand game on the market, and the sulfuric acid market was consolidating at a low level.

The market for ammonium phosphate rose strongly in May, and its price continued to rise due to favorable factors such as cost support, tight supply, and increased demand. Manufacturers often suspend or restrict orders, with a focus on early orders and a high volume of pending orders. As of May 31st, the average market price of 55% powdered ammonium was 3150 yuan/ton, an increase of 10.40% compared to the average price of 2853 yuan/ton on May 1st.

In the future market forecast, sulfur analysts from Business Society believe that the supply of goods in the sulfur market is stable, and the downstream phosphate fertilizer market is improving. The increase in the operation of ammonium phosphate plants may provide support for the transmission of upstream sulfur costs. At the same time, sulfur prices have experienced a significant decline in the early stage, and operators are interested in exploring an increase. It is expected that the sulfur market will consolidate and rise in June.

In May, the price of ethylene glycol first fell and then rose

In May, the price of ethylene glycol first fell and then rose. According to data from Business Society, as of May 31, the average price of domestic oil to ethylene glycol was 4526.67 yuan/ton, which is 1% higher than the average price of 4481.67 yuan/ton in the East China market on May 1. The prices for each region are as follows:

The price range for spot goods executed by mainstream manufacturers in East China is 4450-4580 yuan/ton; The spot price of ethylene glycol in the South China market is 4450 yuan/ton, while the mainstream manufacturers in Central China have a spot price range of 4250 yuan/ton for external execution; The mainstream manufacturers in North China offer a spot price of 4500 yuan/ton for external transactions.

May port destocking

The port inventory showed a destocking status in May. As of May 30th, the inventory of ethylene glycol in the main port of East China was 725100 tons, which is 869100 tons compared to the inventory on April 29th, and 144000 tons have been destocked.

In May, the price of ethylene glycol first fell and then rose, mainly due to changes in the news in the middle and late stages. There were production cuts in the Middle East and North America overseas, supply contraction, and a decrease in port forecasts, breaking previous expectations for import growth; Another reason for the decline in port inventory is due to the previous consumption of hidden inventory, which has accelerated port shipments recently and has begun to shift towards consumption of explicit inventory.

Possible increase in supply in June

The short-term changes in ethylene glycol supply are as follows: by the end of May, a 500000 ton/year ethylene glycol plant in Guangdong had been restarted and qualified materials were produced. The subsequent load plan is to maintain around 90%. The plant was previously shut down for maintenance in late March. The restart time of a 400000 ton/year MEG plant in Fujian has been postponed again, and its ethylene plant is still undergoing debugging due to equipment failure. This network will continue to follow up in the future. A 300000 ton/year synthesis gas to ethylene glycol unit in Shanxi has recently been shut down for maintenance, with an estimated duration of around 8 days. A set of 1.4 million tons/year ethylene plant in Zhejiang has been restarted and stably operated. The 800000 tons/year ethylene glycol plant supporting the ethylene plant is planned to be put into operation around the end of this weekend,

From June to July, with the return of large-scale facilities such as Zhejiang Petrochemical and satellites, it is expected that the production capacity of ethylene glycol will reach 2.95 million tons from the end of May to July. In the medium to long term, there is an expectation of supply growth.

In June, ethylene glycol or oscillating operation will be the main focus

The focus of the ethylene glycol game in June is on downstream polyester demand and supply side variables. In the short term, it is expected that ethylene glycol will mainly operate in a volatile manner in June.

Price trend

According to the price monitoring of Business Society, the CPP market has been operating in a weak and volatile manner at a low level this month. As of May 30th, the price of 25 μ m CPP composite film is around 10133.33 yuan/ton, a decrease of about 0.16% compared to the beginning of the month. The highest point of the price occurs in the middle of the second half of the month, with a price of about 10183.33 yuan/ton, and the lowest point occurs in the middle of the month, with a price of about 10133.33 yuan/ton.

quotations analysis

From the above chart, it can be seen that the price of raw material PP has fluctuated and increased this month. The mainstream quoted price of T30S (wire drawing) by domestic producers and traders is around 7964.29 yuan/ton, which is about 1.55% higher than the price level at the beginning of the month (7842.86 yuan/ton). The highest point of the price appeared in the latter half of the year, at 7964.29 yuan/ton, and the lowest point appeared in the middle of the first half, at a price of about 7712.50 yuan/ton. The raw materials fluctuate upwards, and the cost side provides strong support for CPP, which significantly boosts the price of CPP films and puts greater pressure on prices.

After the holiday, the operating load rate has gradually rebounded, and there is sufficient supply of spot goods.

In terms of demand: entering the off-season, many downstream enterprises are in urgent need of replenishment, with weak trading volume and cautious inquiries. Market demand still has weak support for prices.

Future Market Forecast

Downstream inquiries are cautious, demand is in the off-season, and there is not much room for film companies to make concessions. It is expected that CPP prices will fluctuate and consolidate in the near future.

The price of plasticizer DOP fluctuated and increased in May

According to the Commodity Market Analysis System of Shengyishe, as of May 29th, the price of plasticizer DOP was 10162.50 yuan/ton, an increase of 3.83% compared to the DOP price of 9787.50 yuan/ton on May 1st at the beginning of the month. The price of raw material phthalic anhydride for plasticizers has increased, while the price of isooctanol has stabilized at a high level. The cost of plasticizers has increased, and the profit of plasticizer DOP has decreased. The production of plasticizer DOP enterprises has decreased, and the supply of plasticizer DOP has decreased.

The price of raw material isooctanol fluctuates and rises

According to the Commodity Market Analysis System of Shengyishe, as of May 29th, the quotation for isooctanol was 9950 yuan/ton, an increase of 3.00% compared to the quotation of 9660 yuan/ton on May 1st. In May, the price of isooctanol was at the bottom of the market, and there was limited room for its decline. Since the domestic isooctanol market hit bottom in mid April, the price center of isooctanol has slowly shifted upwards. From the demand side, the rotating maintenance of downstream plasticizers and isooctyl acrylate units in May resulted in low continuity of buying, and the fluctuation range of isooctyl alcohol narrowed. The market for isooctanol lacks continuous upward momentum, and the price of isooctanol has fluctuated slightly.

The price of phthalic anhydride fluctuated and rose in May

According to the market analysis system for phthalic anhydride products by Shengyishe, as of May 29th, the quoted price of phthalic anhydride was 8187.50 yuan/ton, a fluctuation increase of 6.06% compared to the price of phthalic anhydride on May 1st, which was 7720 yuan/ton. The price of raw material ortho benzene has increased, and the cost of phthalic anhydride has increased; In the middle and late stages, the phthalic anhydride unit underwent centralized maintenance, and its daily production capacity utilization rate has dropped to 59%. The supply of phthalic anhydride has decreased, supporting the rise in phthalic anhydride prices and the increase in plasticizer DOP costs.

Expected decrease in downstream demand

Affected by the increase in planned maintenance enterprises, The production of PVC has decreased. The operating rate of downstream product enterprises is around 50%, unchanged on a month on month basis and decreasing year-on-year. In the short term, the supply of fundamentals has decreased due to maintenance, while domestic and international demand remains weak, especially in the export market, making it more difficult to accept orders, The supply and demand of PVC market are weak; In the medium to long term, The policy stimulus in the PVC market to reduce inventory and quantify inventory is difficult to bring benefits to new construction projects. Real estate transactions have boosted demand in the building materials market, and spot fundamentals are cautious and cautious. There is not much planned maintenance in June, and new production capacity is planned to be put into operation, resulting in increased supply and poor demand performance, which has a certain drag on the market. The supply and demand in foreign markets are weak due to maintenance and off-season constraints. Overall, The supply and demand of PVC and downstream markets are weak, and the demand for plasticizers remains weak.

Future expectations

Business Society plasticizer product data analysts believe that the price of plasticizer DOP fluctuated and increased in May. The production of plasticizer DOP manufacturers has slightly decreased, and both upstream isooctanol manufacturers and downstream PVC product enterprises have experienced varying degrees of maintenance and production decline. The overall supply of plasticizer sector is tight; Downstream production has decreased, and downstream demand for plasticizers is expected to decrease. In the future, with the completion of enterprise maintenance, supply and demand have increased, and the support for rising raw material prices has weakened; Downstream demand support is increasing, and the price of plasticizer DOP is expected to stabilize strongly in the future.