The acetone market continued to decline in August, reaching a new low for the year. According to the analysis system of Business Society, the average daily price of acetone in the national market has dropped from 6975 yuan/ton on August 1st to 6362.5 yuan/ton on August 31st, a decrease of 8.78%, compared to 7062 yuan/ton at the beginning of the year, a decrease of 9.91%. From the perspective of the acetone market in East China, the price of 6750 yuan/ton quoted on August 1st fell to 6150 yuan/ton quoted on August 31st, a decrease of 8.89%. Throughout the year to present, the domestic acetone market has shown a trend of first rising and then falling.

From a supply perspective, the inventory at Jiangyin Port has remained at 25000 to 35000 tons, reaching a high level since the beginning of the year. There will continue to be imports and domestic trade shipments arriving to replenish the inventory. It is understood that the import sources are mainly from South Korea, Saudi Arabia, and Thailand, and it is not ruled out that the high level at the end of the month will continue.

From a cost perspective, pure benzene showed a significant decline at the beginning of the month due to weakened support from the cost side, slow inventory digestion, obvious accumulation of inventory, significant resistance to shipment from petrochemical enterprises, and pressure to digest contract sources. Under multiple pressures, traders had to lower prices to ship.

From the demand side, the top two downstream industries have relatively stable production, with bisphenol A production at 60% and acetone cyanohydrin MMA production at 50%. The overall production of bisphenol A and MMA downstream is stable, with limited export orders for isopropanol and domestic facilities maintaining a level close to 50%.

After a wide decline in the acetone market, the operating rate of phenol ketone factories remained high at the end of the month, and the import contract goods arrived at the port normally, with sufficient supply. Traders still have shipment pressure; From the demand side, solvent terminal factories have seen an increase in demand for acetone as the weather cools down. Currently, acetone has bottomed out, making it a good time for the demand side to restock. In September, there will be a demand for stocking during the Double Festival holiday, and Business Society expects that trading will improve in the later period.

Ethylene glycol prices rise in the second half of August

The price of ethylene glycol rose in the second half of August. According to data from Shengyi Society, as of August 29th, the average price of domestic oil to ethylene glycol was 4663.33 yuan/ton, an increase of 1.97% from August 20th. The prices in each region are as follows:

The spot price range for mainstream manufacturers in East China is 4600-4795 yuan/ton; The spot price of ethylene glycol in the South China market is 4600 yuan/ton.

On August 29, 2024, the basis of the spot contract for ethylene glycol at the port was close to low and far from high. The paper cargo basis quotation for the 01 contract this week ranges from 0 to+2; The basis of forward contracts is relatively strong, with a basis price of 15-20 yuan/ton in September. Recently, the basis has strengthened.

On August 29th, the price of coal to ethylene glycol remained basically stable, with a domestic price range of 4200-4330 yuan/ton, including taxes.

On August 28, 2024, the external price of ethylene glycol was as follows: the landed price in China was $560/ton, and the landed price in Southeast Asia was $556/ton. The domestic landed price has slightly increased compared to the 22nd.

Reasons for the rebound in ethylene glycol prices this week:

1. The amount of imported ethylene glycol arriving at the port has decreased

Last week, there was a concentration of goods arriving at the port, resulting in accumulated inventory data. However, this week’s expectations for the port have declined, leading to a decrease in inventory data. As of August 29, 2024, the total spot inventory of ethylene glycol in the main ports of East China was 673300 tons, a decrease of 10900 tons from the total spot inventory of ethylene glycol in the main ports of East China on August 22, which was 684200 tons..

2. Supply side negative load reduction and expected increase

On the supply side, the scale of production reduction in ethylene glycol plants has recently expanded, partly due to the favorable price difference of EO conversion, achieving production capacity conversion, and partly due to planned shutdown and maintenance. On the demand side, downstream demand is expected to be strong during the peak season, with a turning point in the peak season for gold and silver, and a slight rebound in downstream operating rates.

Recent Developments in Ethylene Glycol Plant

Northern Chemical will restart at the end of the month, while coal production facilities such as Shenhua Yulin and Henan Coal Industry will be shut down, and 830000 tons of coal from overseas markets in the United States will be shut down due to unforeseen circumstances.

Future expectations

At present, the absolute amount of explicit inventory in ports is still relatively low. This provides some support for the price of ethylene glycol.

It is expected that the price of ethylene glycol will experience strong fluctuations in the short term, but the price ceiling will narrow.

1、 Price trend

According to the Commodity Market Analysis System of Shengyi Society, the average price of ammonium sulfate in the domestic market was 921 yuan/ton on August 1st, and 913 yuan/ton on August 28th. The market price of ammonium sulfate has dropped by 0.90% this month.

2、 Market analysis

The market price of ammonium sulfate first fell and then rose in August. In the first half of August, the market price of ammonium sulfate weakened and declined. The operating rate of coking enterprises is relatively low, while the operating rate of internal level enterprises is relatively high. The enthusiasm for market procurement has weakened, and on-site trading is weak. The granule factory has a large inventory and the shipping market is not good. The export market for ammonium sulfate has not improved, and the confidence of exporters has been dampened. In the second half of August, the market price of ammonium sulfate fluctuated and rose. The operating rate of coking enterprises is relatively low, and some enterprises have limited production. The operating rate of internal level enterprises has also decreased. Downstream inquiries have increased, the focus of ammonium sulfate transactions has shifted upward, and market prices have risen. As of August 28th, the mainstream ex factory quotation for coking grade ammonium sulfate in Shandong region is around 890 yuan/ton. Domestic grade ammonium sulfate, the mainstream ex factory quotation in Shandong region is around 900-930 yuan/ton.

According to the weekly K-bar chart from June 3, 2024 to August 19, 2024, it can be seen that the domestic ammonium sulfate cycle is fluctuating. Ammonium sulfate experienced a significant decline in August, with the largest drop occurring in the week of August 12th at -1.82%.

3、 Future forecast

An ammonium sulfate analyst from Shengyi Society believes that downstream demand is still acceptable in recent days, market inquiries have increased, and on-site trading is good. At present, export expectations are positive, and the price of ammonium sulfate has slightly increased. It is expected that in the short term, the domestic ammonium sulfate market prices will remain stable with a moderate upward trend.

The tight supply of goods continues to drive the phenol market higher. On the 27th, Sinopec once again raised the listing price of phenol. The listing price of phenol in Sinopec East China is 8700 yuan/ton, and the listing price of phenol in Sinopec North China is 8700-8750 yuan/ton. The tight supply in the market continues to be positive, with traders showing strong sentiment towards price increases and factories taking advantage of the situation to raise prices. However, the terminal market is cautious in chasing price increases, with some urgent needs mainly being replenished, and there is insufficient follow-up on trading.

On the 27th, due to the wide upward trend of crude oil, the market price of pure benzene in East China was relatively strong, with pure benzene prices ranging from 8480-8550 yuan/ton. The atmosphere between buyers and sellers has been tense in recent months, but there has been a significant upward trend in the far months. Shandong region has been listed for price increase due to cost support. The cost is supported by favorable downstream phenol.

The phenol offers in various markets across the country on August 27th are as follows:

East China region: 8750, up 50

Shandong region: 8750, up 50

Surrounding areas of Yanshan: 8700, up 50%

South China region: 8780, up 50

The current phenol market is mainly affected by supply and demand, and short-term futures will continue to be tight. The operating rate of phenol ketone factories will increase in September, and the focus should also be on the replenishment of imported goods. Business Society expects phenol to continue to operate steadily in the short term, and pays attention to market transactions.

According to the Commodity Market Analysis System of Shengyi Society, the domestic polyester staple fiber market has maintained a fluctuating downward trend since August, with a 3.23% decline as of August 25th. Today (August 26th), there was a slight rebound, with the average price of mainstream factories in Jiangsu and Zhejiang at 7535 yuan/ton, up 0.44% from the previous trading day. The rise in raw material prices and increased cost support have led to a surge in prices for short fiber producers and traders, but the trading atmosphere remains weak.

The expectation of the Federal Reserve cutting interest rates has increased, which is positive for the commodity market atmosphere. International oil prices have risen, and on August 23rd, the settlement price of the main contract for WTI crude oil futures in the United States was $74.83 per barrel, an increase of $1.82 or 2.5%. The settlement price of the main Brent crude oil futures contract was $79.02 per barrel, an increase of $1.80 or 2.3%. PTA continued to rise, with an average market price of 5388 yuan/ton in the East China region, up 0.98% from the previous trading day. However, the later announced PTA plant maintenance plan is limited, and there is a strong expectation of accumulated inventory in the market.

The peak season for traditional terminal demand is approaching. If demand rebounds as expected, it can boost confidence in the textile market and drive procurement enthusiasm. At present, most of them maintain a small amount of procurement for essential needs, with only a few downstream feedback showing signs of improvement in order volume. The operating rate of weaving machines in Jiangsu and Zhejiang is currently around 64%. In the future, attention can be paid to the operating situation of “Golden Nine” terminal textile enterprises, or there may be a phenomenon of periodic bargain hunting procurement.

Business analysts believe that the peak season has not yet started, and the demand side is not yet driven by favorable factors. The market is waiting for a turning point between the peak and off peak seasons. But with the strengthening and consolidation of crude oil, cost support is still present, and it is expected that the price of polyester staple fiber will rise narrowly in the short term.