The domestic maleic anhydride market saw a significant increase in July, but slightly declined at the end of the month. As of July 31st, the average price of maleic anhydride quoted was 8600 yuan/ton (including tax), an increase of 18.62% from 7250 yuan/ton on July 1st.
Supply side: In July, the supply and demand pattern of the domestic maleic anhydride market shifted from balance to tight balance: there was significant differentiation on the supply side: the integrated butane process factory was fully produced but was closed and reluctant to sell, and the enterprise prioritized the supply of long-term cooperative resin factories, BDO manufacturers, and fixed export orders; The benzene process unit has been continuously shut down due to cost pressures, and the production of new capacity has fallen short of expectations. In addition, some units in the Shandong region have undergone maintenance, resulting in a significant reduction in domestic spot supply. Manufacturers have strong bullish expectations, and their offers continue to rise, making it more difficult to obtain spot goods in the market. In terms of inventory: Social inventory remains low, and the cost of holding goods for traders increases accordingly. Most traders have prices but no goods, while a few traders with goods focus on protecting long-term cooperative customers. As of July 31st, the solid anhydride market in Shandong Province operates around a factory price of 7800-8000 yuan/ton, while the liquid anhydride market operates around a factory price of 7100-7500 yuan/ton.
Upstream: In July, the n-butane market in Shandong saw a significant increase, influenced by international geopolitical tensions and the rise in crude oil prices; Internationally, the price of CP butane in Saudi Arabia in July was $600/ton, a decrease of $220 from June, resulting in a significant reduction in imported gas costs.
Downstream: July is in the traditional high temperature off-season, and domestic demand for fiberglass, anti-corrosion building materials, and artificial stone terminals is weak. Most resin companies schedule production according to demand, and overall production remains low. After the continuous and significant increase in maleic anhydride, the production cost of resin has risen, but the terminal transmission is not smooth, and the profit of resin enterprises is under pressure. The willingness to chase after high priced maleic anhydride is weak, and multidimensional demand replenishment is necessary. In July, the BDO market rose, and the raw material costs of maleic anhydride BDO enterprises continued to rise, compressing production profits and increasing manufacturers’ willingness to raise prices.
Analysts believe that in late July, leading companies such as Qixiang Tengda and others in the maleic anhydride industry will be closed down and reluctant to sell, resulting in a tightening of spot circulation. In August, the closure may be lifted and spot sales may resume. Coupled with the expectation of restarting the maintenance equipment in the early stage, the market circulation of goods is expected to gradually increase; From the demand side, unsaturated resins were still in the traditional off-season of high temperatures in early August, and the downstream of UPR and BDO had weak willingness to maintain rigid demand procurement and chase after price increases. Only near the end of the month, there is a slight demand recovery expected from traditional stocking, making it difficult to form a sustained demand pull; In terms of raw material n-butane, Saudi Arabia introduced CP in August, with a price of 640 US dollars per ton for butane, an increase of 40 US dollars from July. The tense situation in the Middle East has supported the domestic n-butane market. It is expected that the domestic maleic anhydride market will experience high-level fluctuations and a slow downward shift in focus in August.
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