Author Archives: lubon

Low price operation of ethylene oxide throughout the year in 2023 and may improve in 2024

Overview of ethylene oxide prices in 2023

 

In 2023, the price of ethylene oxide remained relatively low, with an operating range of 6000-7200 yuan/ton. According to data from Business Society, as of December 31, the average price of ethylene oxide in the domestic market was 6400 yuan/ton; The decline within the year was 5.88%.

 

In 2023, the annual price of ethylene oxide remained at a low level in the past three years, and the market average for the year remained at a weak level throughout the historical cycle.

 

Overview of the ethylene oxide industry chain

 

The price trend of ethylene oxide is relatively close to that of the main downstream polycarboxylate water reducing agents, and the impact factor of the demand side on the price is more obvious in 2023. Single enterprise inventory is not high, production is relatively stable, demand for ethylene oxide is relatively stable, and downstream production is mainly stable; From the recent upstream and downstream product prices, it can be seen that downstream prices have started to rise, increasing profit margins and strengthening support for the price of raw material ethylene oxide in the short term.

 

Since mid to late December 2023, the price of ethylene glycol has remained strong, and some factories have begun to operate the appropriate conversion of ethylene glycol. There is a certain negative feedback on the output of ethylene oxide production.

 

Low starting point of ethylene oxide production may improve in 2024

 

Due to price and profit factors, the operating rate (capacity utilization) of ethylene oxide in 2023 has been running at 50-60%.

 

In terms of production capacity changes, in December 2023, 15 sets of maintenance equipment were installed, involving a total production capacity of 2.126 million tons per year, with a total production capacity of 8.6 million tons per year. The production of new production capacity in 2024 is mainly concentrated in the second half of the year.

 

The incomplete statistics of ongoing projects in the ethylene oxide industry chain are as follows:

 

The price of ethylene oxide is expected to rise in 2024, but there is not much room for upward movement

 

Due to the influence of overseas ethylene glycol equipment factors, the fundamentals of ethylene glycol have improved, prices have moved up, and the demand for production conversion may have negative feedback on the supply of ethylene oxide. On the other hand, the uncertainty of terminal demand in real estate is strong, leading to strong uncertainty in the demand for polycarboxylate water reducing agents in the main downstream, which to some extent suppresses the price of ethylene oxide. It is expected that the price of ethylene oxide will rise in 2024, but there is not much room for upward movement.

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In 2023, lithium iron phosphate will continue to decline. What is the trend in 2024?

1、 Price trend

 

In 2023, the market for lithium iron phosphate continued to decline, showing a downward trend throughout the year. The price peaked at the beginning of 2023, with a price of 166000 yuan/ton and a low point at the end of December at 46000 yuan/ton, with a decline of 72.29% throughout the year. There was only a slight rebound in May, and the trend of lithium iron phosphate declined significantly in 2023. In the past two years, lithium iron phosphate seems to have experienced a roller coaster ride, and the entire industry has undergone earth shaking changes. Since the shortage of supply in 2021, With rapid development and oversupply by 2023, crowded enterprises, and intensified competition, what will happen to the lithium iron phosphate market in 2024?

 

2、 Review of the 2023 lithium iron phosphate market

 

Lithium iron phosphate prices first fell and then rose in the first half of the year

 

From the bar chart, it can be seen that in 2023, lithium iron phosphate experienced more decline than increase throughout the year, with only May and June showing an upward trend in the second quarter. The overall price in the first quarter fell by 39.76%, from 166000 yuan/ton at the beginning of January to 100000 yuan/ton by the end of March. The low decline in the second quarter slowed down, mainly due to the influence of upstream lithium carbonate. At the end of April, the supply of upstream raw material lithium mica was very tight, and the price of imported spodumene concentrate from overseas remained high, Lithium carbonate rebounded from its decline at the end of April, while lithium carbonate was in an upward trend. Lithium iron phosphate passively followed suit, although there was a slight rebound in April and May, driving up prices. However, the overall trend in the second quarter still showed a downward trend, with a decrease of 5%. The price dropped from 100000 yuan/ton in early April to 95000 yuan/ton at the end of June. The overall price of lithium iron phosphate fell by 42.77% in the first half of the year.

 

Lithium iron phosphate prices continue to decline in the second half of the year

 

In the second half of the year, lithium iron phosphate has shown a continuous downward trend, mainly due to the influence of upstream lithium carbonate. From the comparison chart between upstream and downstream, it can be seen that the price of lithium iron phosphate is closely related to upstream lithium carbonate. Lithium carbonate has plummeted sharply, and the cost side of lithium iron phosphate lacks strong support. In the third quarter, the price of lithium iron phosphate dropped from 95000 yuan/ton in early July to 70800 yuan/ton at the end of September, with an overall decline of 25.47%, The price of lithium iron phosphate in the fourth quarter dropped from 70800 yuan/ton in early October to 46000 yuan/ton at the end of December, with an overall decline of 51.58% in the second half of the year.

 

3、 Development Trends of Lithium Iron Phosphate in 2024

 

In terms of production capacity: by the end of 2022, the production capacity of lithium iron phosphate was 2.12 million tons, and by the end of 2023, the production capacity of lithium iron phosphate was 4.27 million tons. Sichuan region has a relatively high concentration of lithium iron phosphate production capacity, with Yuneng, Wanrun, Youshan, Germany, and Rongtong accounting for 60%. Currently, there is an overcapacity of lithium iron phosphate in various regions, with a clear trend and low operating rates. The main operating rates are concentrated in top enterprises. In 2023, lithium iron phosphate experienced overcapacity and low prices, Compressing costs and seizing market share, the investment heat is gradually entering a cooling off period, and there will be a significant cooling down in investment in lithium iron phosphate in 2024.

In terms of production growth rate: In 2023, the annual growth rate of production capacity was lower than expected, with growth rates of -40%, 61%, 19%, and -15% in the four quarters, respectively. The peak season of demand was in the 2.3 quarter, with a relatively fast growth rate, while the first and fourth quarters were relatively slow. In the first quarter, the domestic environment was mainly relaxed by clearing inventory, with upstream operating at a high level and downstream demand insufficient. In the second quarter, it entered the traditional peak season, and demand recovered. At the same time, the upstream price recovery drove the upward trend of lithium iron phosphate, In the third and fourth quarters, there was insufficient terminal demand, and the overall lithium iron phosphate market was sluggish. Weak inventories remained high, and consumption was slow. The industry’s pessimistic attitude was obvious.

 

In terms of imports: In the first half of 2023, the total import volume of lithium iron phosphate was 21.186 tons, and in the second half of the year, the import volume was 19.3 tons, with an annual import volume of about 40.4 tons. Due to the impact of upstream raw material prices and weak overall demand, the overall import volume significantly declined in 2023, and the import volume significantly decreased in the third quarter, mainly due to relatively saturated domestic supply, weak downstream demand, and less import demand.

 

In terms of exports: In the first half of 2023, the total export volume of lithium iron phosphate in China was 610.415 tons, and in the second half of the year, the export volume was about 554 tons. The annual export volume was about 1164 tons, with more exports in the first quarter and a slowdown in the second quarter. The reasons are: 1. High upstream raw material prices. 2. Some battery manufacturers have started to expand overseas, which has to some extent driven the export volume of lithium iron phosphate.

 

In terms of supply and demand: In 2023, the domestic supply of lithium iron phosphate is sufficient, and the tight supply situation has significantly eased. The total supply in 2023 reached 1.2 million tons, a year-on-year increase of 80%. In the past three years, the demand side of lithium iron phosphate has continuously released production capacity, and the industry has gradually shifted from supply shortage to oversupply. Currently, it is difficult for the lithium iron phosphate market to rise, and prices may maintain the current situation or continue to decline.

 

In summary, the production capacity of lithium iron phosphate in China has been in short supply since 2021, and the price has been rising all the way. By 2022, the demand for lithium iron phosphate was scarce, and the price continued to rise. At the end of 2022, the price of lithium iron phosphate reached a high market level, and the production capacity of lithium iron phosphate continued to increase. Too much new production capacity was invested, resulting in severe overcapacity. The built capacity is sufficient to meet the demand for the next 3-5 years, and the phenomenon of overcapacity is obvious. Secondly, driven by high profits, Numerous enterprises have joined the lithium iron phosphate industry, including not only new energy industry enterprises, but also emerging manufacturers who have entered and laid out lithium iron phosphate production lines, hoping to share a share of the new energy market. This phenomenon has caused congestion in lithium iron phosphate enterprises, increased competitive pressure, and lithium iron phosphate may continue to operate under pressure in 2024.

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The recent stable operation of the n-propanol market (1.12-1.19)

According to price monitoring data from Business Society, as of January 19, 2024, the reference price for domestic n-propanol market was 7950 yuan/ton, which was basically the same as January 12, 2024. Compared with December 13, 2023 (reference price for n-propanol was 7850 yuan/ton), the price increased by 100 yuan/ton, an increase of 1.27%.

 

From the monitoring chart of Business Society data, it can be seen that in the recent period (1.12-1.19), the overall market situation of domestic n-propanol has been stable. Recently, the fundamentals of the n-propanol market have been relatively calm, with little adjustment in the supply and demand sides of the market. There have been no significant fluctuations in the n-propanol market, and the supply side of n-propanol has performed normally. The downstream demand side continues to purchase in demand, and the overall supply and demand transmission is normal. As of January 19th, the domestic market price of n-propanol in Shandong region is around 7400-7800 yuan/ton. The normal operation of the n-propanol plant in the Nanjing area, and the overall stable operation of the n-propanol market, with a reference price of around 8500-9000 yuan/ton for the n-propanol market. Dealers in different regions still have reservations about prices, and the difficulty in monitoring prices may lead to differences in specific negotiation situations. Each region also has differences, and actual negotiations are the main focus.

 

Prediction of future market trends of n-propanol

 

At present, the overall trading atmosphere in the domestic n-propanol market is mild, with most of the inquiries on the market being for orders that are in high demand. The n-propanol industry has a normal mentality and has a stable outlook on the future market. The n-propanol data analyst from Business Society believes that in the short term, the stability and small fluctuations in the domestic n-propanol market are the main factors, and the specific trend still needs to pay more attention to changes in supply and demand news.

 

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On January 17th, the sulfur market consolidation and decline

Product name: Sulfur

 

Latest price: On January 17th, the average sulfur price in East China was 920 yuan/ton, a decrease of 1.08% compared to the previous working day’s 930 yuan/ton.

 

Analysis: The sulfur market in East China is experiencing a downward trend, with normal operation of on-site sulfur units and sufficient supply of market goods. However, the downstream market is weak, with low utilization of unit capacity and weak enthusiasm for sulfur procurement. The market trading atmosphere is poor, and port prices continue to decline, which has a negative impact on the spot market. The bearish sentiment on the market is obvious, and to stimulate shipments, some refineries have lowered their sulfur prices.

 

Market forecast: There is sufficient supply of goods on the supply side, weak downstream demand, and a clear trend of oversupply on the market. It is expected that the sulfur market will continue to be weak and consolidate in the future.

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The price of imported potassium chloride fell by 2.66% this week (1.8-1.14)

1、 Price trend

 

According to the Commodity Analysis System of Business Society, the domestic market for imported potassium chloride has slightly declined this week. The price of potassium chloride has dropped from 3005 yuan/ton at the beginning of the week to 2925 yuan/ton at the end of the week, a decrease of 2.66%, a year-on-year decrease of 24.76%. On January 15th, the potassium chloride (imported) commodity index was 92.86, unchanged from yesterday, a decrease of 46.82% from the highest point in the cycle of 174.60 points (2022-06-21), and an increase of 59.42% from the lowest point of 58.25 points on August 6th, 2020. (Note: The cycle refers to 2012-03-01 present)

 

2、 Market analysis

 

The prices of mainstream domestic potassium chloride distributors have declined this week. The arrival price of 60% white potassium in Qinghai is around 2860 yuan/ton, and the self raised price of 62% white potassium at the port is around 2650 yuan/ton. The self raised price of 60% Dahong particles at the port is around 2850 yuan/ton. Border trade accounts for 62% of Russian white potassium at around 2550 yuan/ton.

 

From the downstream market situation of potassium chloride, the price of potassium carbonate in the market has slightly declined this week, dropping from 7480 yuan/ton at the beginning of the week to 7440 yuan/ton at the end of the week, a decrease of 0.53%, and a year-on-year decrease of 18.24% over the weekend. The market price of potassium nitrate has slightly declined this week, dropping from 5375 yuan/ton at the beginning of the week to 5325 yuan/ton over the weekend, a decrease of 0.93%, and a year-on-year decrease of 9.94% over the weekend. Overall, the downstream market for potassium chloride has slightly declined, and downstream customers have weakened their demand for potassium chloride.

 

3、 Future Market Forecast

 

In mid to late January, the overall trend of potassium chloride market may fluctuate and fall narrowly, with consolidation being the main trend. The prices of potassium chloride in salt lakes and Zangge are temporarily stable. The downstream market of potassium chloride has slightly declined, and downstream demand has weakened, with rigid demand procurement being the main focus. Business Society’s potassium chloride analyst believes that domestic potassium chloride import prices may slightly decline in the short term.

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