The recent plunge in the international crude oil market has impacted the chemical market and the mentality of the epoxy resin industry chain, aggravating the bearish sentiment of the industry. The domestic epoxy resin market continued its downward trend, and the trading on the market did not change significantly. The support of the dual raw materials is weak. Epichlorohydrin offers a significant decline. The other raw material, Bisphenol A, has weak support. The epoxy resin is in a downward trend as a whole. There are few market purchases and it is more difficult to ship.
On the supply side, after the resumption of production in the solid resin factory in the Huangshan area, it was greatly restricted by policies and downstream demand, and the load was maintained at a low level. In terms of liquid resin, the increase in the unit load was relatively slow. The downstream terminal market under the haze of the epidemic is still sluggish. In general, epoxy resin still has the risk of falling with raw materials, and there is a lot of inventory accumulated in the early stage to be digested. The market is limited by many negative factors, and the industry is mostly negative about the market outlook. It is hard to be optimistic as a whole, and it is expected that the domestic epoxy resin market will continue its weak downward trend in the near future.
In order to effectively control the epidemic, the whole country has resolutely implemented measures to extend the Spring Festival holiday and shut down the factories of enterprises to reduce production. At present, production is still recovering slowly, the downstream market demand is sluggish, and the amount of external purchases is very small. In addition, traffic control has not yet fully liberalized logistics. It will take time to recover.
Domestic polypropylene prices continue to drop, and storage capacity hits record highs
In the first quarter of 2020, domestic polypropylene prices continued to drop. Taking the price of wire drawing in East China as an example, the highest price in this quarter was 7,500 yuan/ton in January, and the lowest price was 6,350 yuan/ton in early March. In addition, due to the continuous fermentation of public health emergencies at home and abroad, crude oil prices continued to fall, cost support collapsed, the commodity market encountered the limit down several times, and the main PP contracts hit new lows many times, suppressing the continued decline in market prices. After the difficult resumption of work, downstream factories are once again facing the crisis of a sharp reduction in foreign trade orders. Many terminal factories have once again reduced their burdens or reduced production. The overall downstream operation is at risk of another decline, which has also exacerbated the further decline in market prices.
As for the PP trend in the second quarter, market players are still pessimistic.
Although the downstream has resumed work intensively in March, the resumption of work does not mean the start of construction, nor does it mean that there has been a significant increase in demand. Of course, the current petrochemical inventory is in the inventory reduction stage, but most of it is due to the completion of the planned volume by the agent, and the recent monthly accumulation rules are similar. Generally, after the 23rd of a month, the two oil inventories will decrease at a faster rate, but because of PP has not actually been digested, so it is still a process of accumulating stocks at the beginning of the month, and when the actual production increases in 2020 and the inventory base is large, the pressure on the supply side will only increase.
Weak demand, coal prices expected to rise hopes will be dashed
The supply is loose, the transportation is smooth, and the coal demand is weak; the sales situation at the pit mouth is not optimistic, the coal mine shipments are not smooth, some coal stations have top warehouses, and the inventory is running at a high level. Still going down.
At present, the production of upstream coal mines has returned to normal, railway shipments such as the Daqin Line have maintained a medium-to-high level, and the inventory of ports around the Bohai Sea has increased by an average of 360,000 tons per day, and the pressure of market oversupply has increased significantly. Up to now, the top ten coal transportation ports around the Bohai Sea have a total of 23.23 million tons of coal, a significant increase of 3.67 million tons compared with March 15.
This week, the market has a strong pessimistic atmosphere. The quotations of port traders continue to drop slightly according to the index or stop quoting and stay on the sidelines. The overall market trade activity is sluggish; down. At present, the market coal price has not bottomed out.
Looking forward to the operation of the coastal coal market at the end of this month and the beginning of next month, downstream users mainly consume their own inventories or pull shipments from long-term cooperation, which is difficult to drive the rapid start of procurement demand. In addition, the off-season of thermal power is approaching. With the end of the heating season, the power plant units will carry out routine maintenance, which will further restrain the procurement demand of power plants. After the arrival of the rainy season, the impact of new energy has gradually expanded; coupled with the high port inventory, in April, it is expected that the terminal will continue to maintain rigid demand.
The spot market has eased, and the rise in sulfur prices may be difficult to sustain
The price hike may not be sustainable. Prices rose sharply in many markets this week. With the second-quarter contract price discussions well underway, the spot market has so far settled into its first-quarter rally and has moved into action.
The FOB price in both East and West Suez is now $80 (ton price, the same below), a figure the market has not seen since September. But the market is not optimistic about further price gains, and many market players continue to expect a sharp drop in May once April's buying ends.
The demand for silicon manganese is still better than the previous period, and the price is relatively firm in the short term
The domestic futures market was mixed on March 26, and the main contract of manganese and silicon 2005 closed at the daily limit at 6,950 yuan/ton.
South African manganese ore is one of the main sources of China's imported ore. Previously, South Africa announced a 21-day nationwide blockade from March 26, which affected major mines and ports, causing market concerns about the supply of manganese raw materials.
According to Mysteel research, the average inventory of manganese ore in Tianjin Port and Qinzhou Port in March was 4.707 million tons, and the average inventory in January and February was 4.648 million tons and 4.903 million tons respectively, indicating that the supply and demand pattern of domestic manganese ore is relatively stable, and the port inventory is relatively stable. There is a certain buffer capacity in the face of the impact of the international epidemic.
Industry insiders believe that the current demand for silico-manganese is still better than the previous period, and there are more procurement needs for bargain hunters. In the short term, the price of manganese silicon is relatively strong due to the demand from downstream parties.
Edited by: Suzhou Dongtuo Chemical Co., Ltd.
