In the first quarter of 2020, the chemical industry market ended in a gloomy atmosphere. In the past three months, when the chemical industry market in China experienced a series of economic events triggered by the outbreak of domestic and foreign health events, the international crude oil price fluctuated frequently and violently, almost sweeping all the major products of the chemical industry, resulting in the continuous decline of the price focus. Returning to the market performance of polyester resin industry in the past quarter also can not escape the haze of market decline, especially for some main raw materials such as PTA, neopentyl glycol, isophthalic acid, trimethylolpropane and other products, the price center of gravity has fallen to varying degrees since the beginning of the year. If the fluctuation factor of chemical raw materials after the Spring Festival is the top-down cost guidance, the main factor for the continuous bottom-up price exploration until the end of the first quarter is the weak demand from the bottom-up.
1. Negative multiple shocks, PTA current price dropped to the largest decline in the same period
Figure 1 Comparison of current PTA prices in 2019-2020
As of March 31, PTA price closed at 3135 yuan / ton, down 52.50% compared with the same period last year. Main futures contracts closed at 3222 yuan / ton, down 50.46% from the same period last year. In the first quarter, due to the rising of public health events to the continuous deterioration of the global scope, the demand of downstream factories recovered slowly, and the logistics tension was almost interrupted in some parts, so the demand was temporarily delayed. In the middle and later period, some enterprises responded to the call of the government and produced as much as possible, which led to a great increase in inventory pressure. In addition, the human resources in the aspects of prudence, production, logistics and even sales are more tense than before, which adds many variables to the recovery market that should have occurred. In addition, at the beginning of March, Russia and OPEC failed to reach an agreement on a new production reduction plan, which led to a sharp drop in international crude oil prices, while domestic chemicals fell sharply, and almost kept a new low. PTA market is even more inevitable "Curse", price repeatedly bottom.
2. The haze in the upstream and downstream is not scattered, and the weak in the gap between neopentyl and pentyl is explored
Figure 2 price trend of domestic neopentyl glycol and isobutyraldehyde in 2019-2020
For PTA's "unfortunate" experience in the market in the first quarter, almost all of them have appeared in other resin raw materials products, while neopentyl glycol market, which is second only to PTA's consumption, has experienced successive impact in the past three months, such as difficult delivery, high cost and poor downstream. From the perspective of price trend, March's decline and rhythm are most obvious: after the Spring Festival, due to domestic health As a result, the price focus of neopentyl glycol 9000 yuan / ton maintained a consolidation state of nearly a month before and after the festival. In March, the first round of rebound of this year was initiated by raw material isobutyraldehyde, which led to a small fluctuation of neopentyl glycol market. However, the good situation did not last for a long time. The high support of raw materials lacked good conductivity, and the price of isobutyraldehyde soon fell to the top. At this time, the accumulated storage pressure of neopentyl glycol plant began to appear. After entering March, the overall operation of downstream polyester resin industry did not rise, but fell back With the increase of flow resin enterprises' parking and production reduction, the weak state of the end coating market began to be more and more obvious reflected in the level of raw materials. The center of gravity of neopentyl glycol market has been declining amid the negative impact of the upstream and downstream. As of March 31, the center of gravity of domestic hydrogenation price in East China market has reached around 7500 yuan / ton, basically falling back to the lowest price last year.
Although the domestic public health event has been basically controlled in March, all provinces and regions except Hubei province are in the stage of active resumption of production and work recovery, due to the sudden outbreak of foreign epidemic, coupled with the collapse of crude oil prices sweeping the main chemical raw material market, the market mentality level has fallen to the bottom again. The polyester resin industry from neopentyl glycol to the downstream is still facing a large pressure of stock discharge, so the future focus of the market is still from the recovery of the end coating market, the recovery progress of the housing market and the manufacturing industry, and then the turning point of the foreign epidemic.
3. Market highlights in the second quarter:
First of all, for the PTA and neopentyl glycol market at this stage, destocking is the primary problem we are facing: it is reported that the PTA social inventory has reached a high level of 3.2 million tons, and how to destock in the future is the key. In the current situation of high inventory and high profit, the PTA variable in the second quarter is relatively large. Now the PTA plant equipment maintenance is not completely clear. According to the calculation, the PTA inventory in the second quarter is still at a high level of 1.4-1.5 million tons. However, if the market turns at a later stage, PTA processing fee may be under pressure. At that time, when the profit moves down, the PTA plant will be forced to stop. Although the market volume of neopentyl glycol is small, the overall shipment volume of the plant in March was lower than expected. Even in the case of some plant maintenance, the price fell to the low price of last year and there was still no large amount of warehouse building and replenishment downstream, so the inventory pressure of some plants in neopentyl glycol was relieved limited. However, due to the large-scale maintenance of neopentyl glycol in the second quarter, it is expected that the recovery of supply and demand in the future will become the turning point of the market in the minds of the industry.
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