1、 Review of August Market Trends
In August, the domestic PA66 spot market as a whole stabilized at a low level and experienced a slight rebound at the end of the month. In the first half of the year, the market price remained stable at around 18000 yuan/ton for a long time, and the focus of transactions remained stagnant; As we entered the latter half of the year, the bullish sentiment in the market gradually heated up. On September 1st, the spot price rose to 18166.67 yuan/ton, a daily increase of 0.93%, and the price completed a phase of slight increase. From the perspective of cycle position, the current one-year cycle price is at a medium low level, and the short-term 10 day and 20 day cycle prices have reached a high range. After a short-term rebound, the price pressure signal appears.
1. Cost analysis
The supply of upstream adipic acid and adiponitrile raw materials is relatively loose, and there has been no significant increase in basic raw material prices. The bottom support for PA66 production costs is moderate, and a strong cost driven market has not been formed. The profit margin of the enterprise’s production side has been restored, and the factory’s operating load has steadily rebounded. The cost side has not provided strong impetus for the continuous upward trend of spot prices. The slight increase at the end of this round is mainly driven by the supply and demand of spot prices, rather than cost induced price increases.
2. Supply and demand analysis
On the supply side, the mainstream PA66 production enterprises in China are operating smoothly overall, with sufficient supply in the industry and no shortage of market sources. With the price rebounding from the previous low, some factories have increased their willingness to raise prices, providing some support for spot prices. On the demand side, August belongs to the traditional off-season of downstream engineering plastics, modification, and injection molding industries. Downstream terminal factories purchase on demand and take on as needed, with weak willingness to stock up in large quantities. The release pace of demand is gentle, and the upward transmission power is limited. The overall pattern of abundant supply and moderate recovery of essential demand has constrained the room for price increases, making it difficult for the market to break out of a unilateral surge.
2、 Short term future forecast
The short-term PA66 market is expected to maintain strong volatility and high pressure operation. The moving average indicator sends out a bullish signal, indicating solid support at the bottom of the price and limited downward space; However, in the short term, the prices of the 10 day and 20 day cycles have already reached a high range, coupled with insufficient follow-up from downstream demand. The momentum for further significant increases in the short term is weak, and the market is likely to mainly operate in a range oscillation, with a slower upward trend in prices. In the medium to long term, the current annual price is at a mid to low level and still has upward potential.
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