According to the Commodity Market Analysis System of Shengyi Society, the overall trend of mixed xylene market has been declining recently (8.2-8.9). On August 9th, the benchmark price of mixed xylene was 7460 yuan/ton, a decrease of 1.97% from 7610 yuan/ton on August 2nd. The mixed xylene market is still declining this cycle, but the magnitude of the downward adjustment varies among different regions, with a decline range of 100-250 yuan/ton. As of August 9th, the mainstream price range for xylene in the South China market in the morning was 7400-7500 yuan/ton, a decrease of 200 yuan/ton compared to the same period last week. The overall decline in the crude oil market during the week has dragged down the mentality of the spot market. The listing price of Sinopec has been lowered based on the prices of refineries in various regions, and the market atmosphere is weak. In terms of demand, we will continue to make essential purchases this week. However, there is insufficient demand for oil products, and the focus of negotiations is relatively low.

On the cost side: During this cycle, the crude oil market has declined. On the one hand, the OPEC+production reduction of 2.2 million barrels per day will be implemented until the end of September, but from October onwards, depending on market conditions, production may gradually increase, which is bearish for the crude oil market. On the other hand, the poor non farm payroll data and rising unemployment rate released by the United States in July, coupled with poor global economic data, have intensified market concerns about the demand outlook and increased negative pressure on the psychological level, leading to a decline in the crude oil market trend. Overall, the crude oil market has significantly declined during the cycle, with a negative rate of change in crude oil. As of August 9th, international crude oil futures have risen. The settlement price of the main contract for WTI crude oil futures in the United States was $76.84 per barrel, an increase of $0.65 or 0.9%. The settlement price of the main Brent crude oil futures contract was $79.66 per barrel, an increase of $0.50 or 0.6%.

Supply side: As of August 12th, Sinopec’s xylene quotations have generally decreased this week. Currently, the company is operating normally, with stable production and sales of equipment. The company’s quotations remain unchanged from the previous day. Among them, the East China Company quoted 7350 yuan/ton, the North China Company quoted 7450 yuan/ton, the South China Company quoted 7400-7500 yuan/ton, and the Central China Company quoted 7450 yuan/ton.

Demand side: Phthalic anhydride and p-xylene markets continue to decline

According to the Commodity Market Analysis System of Shengyi Society, the phthalic anhydride market continued to decline this week. As of August 9th, the phthalic anhydride market in Shandong region showed a weak and stable trend, and downstream factories maintained their essential procurement. High end transactions were hindered, and the mainstream for on-site ortho phthalic anhydride source negotiations was between 7500-7700 yuan/ton, a decrease of 100 yuan/ton compared to the same period last week; The mainstream price for naphthalene based source negotiations is 7300-7400 yuan/ton, a decrease of 100 yuan/ton compared to the same period last week. The price of raw material ortho benzene is weak and stabilizing, while the downstream plasticizer market is fluctuating and falling. The operation of on-site merchants’ equipment is stable, and the sales situation is average.

On August 12th, Sinopec Sales Company temporarily stabilized the price of xylene, with the current execution price being 8500 yuan/ton. This price is implemented in East China, North China, Central China, and South China. Yangzi Petrochemical, Zhenhai Petrochemical and other facilities are operating stably and selling normally. As of August 8th, CFR China’s closing price was 983 US dollars/ton, a decrease of 22 US dollars/ton from last week.

On Friday (August 9th), the Asian xylene market was closed due to a public holiday. The market closed on August 8th, with FOB Korea closing at $851-853 per ton in August, unchanged; In September, CFR China closed at $885/ton, unchanged.

Market forecast: Limited support in the crude oil market, low oil prices dragging down market sentiment, and currently insufficient cost support. There is an expectation of an increase in the operating rate of some equipment on the supply side, and the market expects loose supply in the future, which may lead to negative factors on the supply side. The demand side has recently shown weak performance, with demand leaning towards rigid demand. Overall, there are still negative factors in the xylene market, and it is expected that prices will remain weak in the short term. In the future, we will focus on the impact of the resumption of xylene production on the market supply side.

According to the Commodity Market Analysis System of Shengyi Society, TDI prices in East China have steadily increased this week. As of August 9th, the average market price in East China was 14100 yuan/ton, which is the same as the price of 13633 yuan/ton on August 5th, and has risen by 3.42% this week.

This week, the TDI market continued to rise, with one production line in Gansu Yinguang shutting down during the week and two lines entering a state of complete shutdown and maintenance over the weekend. The supply side tightened, and at the same time, overseas suppliers had a strong willingness to raise prices, pushing up prices slightly multiple times. The market’s transaction center continued to shift upward. Downstream demand remains stable, with rigid demand as the main factor, and favorable supply side conditions boosting TDI prices.

The upstream toluene market continues to decline, with crude oil prices falling within the week, dragging down market sentiment and overall bearish market sentiment. On the supply side, with the increase of port cargo, the supply is relatively loose, which affects the bearish market atmosphere.

According to the analysis of the future market, the TDI data analyst from Shengyi Society believes that the current TDI market trading is stable, and with the supply side’s good news coming out in the future, it is expected that the TDI market will consolidate and operate in the short term.

According to the Commodity Market Analysis System of Shengyi Society, as of August 6, 2024, the reference price of n-butanol in Shandong Province, China was 7866 yuan/ton, a decrease of 67 yuan/ton or 0.84% compared to the reference price of 7933 yuan/ton on August 1.

From the commodity market analysis system of Shengyi Society, it can be seen that in late July, the n-butanol market in Shandong region was weakly declining. Entering August, in the first week (8.1-8.6), the decline in the n-butanol market did not stop, and the market continued to operate with a narrow downward trend. As of August 6th, the reference price for n-butanol in the domestic Shandong region is around 7800-7900 yuan/ton.

Analysis of Factors Influencing the Market Situation of n-Butanol

On the demand side: The n-butanol market continues to decline, with a strong wait-and-see sentiment downstream. Demand is mainly for first-time purchases with caution, and the overall demand transmission performance in the market is average. The support provided by the demand side to the n-butanol market is weak.

In terms of supply: As we enter August, the production of n-butanol units has increased, and the overall supply of n-butanol is abundant, with some factories facing certain supply pressures. The supply side is unable to provide effective support for the n-butanol market, and the market situation continues to decline.

Market price situation of n-butanol

Region/ Product/ August 6th

Shandong region/ N-butanol/ Around 7800-7900 yuan/ton

North China region/ N-butanol/ Around 7800-8000 yuan/ton

South China region/ N-butanol/ Around 8200-8300 yuan/ton

East China region/ N-butanol/ Around 7800-7900 yuan/ton

Market analysis in the future

Currently, the trading atmosphere in the n-butanol market is average, and the transmission of n-butanol supply and demand is still slow. The n-butanol data analyst from Shengyi Society believes that in the short term, the n-butanol market in Shandong, China, will mainly adjust within a certain range, and the specific trend needs to pay more attention to changes in supply and demand news.

According to the Commodity Market Analysis System of Shengyi Society, the overall toluene market has been declining recently (7.26-8.5). On July 26th, the benchmark price of toluene was 7510 yuan/ton, and on August 5th, the benchmark price of toluene was 7300 yuan/ton, a decrease of 2.8% during the period. During this period, the toluene market operated weakly, with market prices fluctuating downwards. The decline in crude oil prices during the week has dragged down market sentiment, and the overall market atmosphere is bearish. On the supply side, with the increase of port cargo, the supply is relatively loose, which affects the bearish market atmosphere. The overall demand is weak, but with the downward trend in prices, there is some downstream demand to replenish inventory at low prices. As of August 5th, the mainstream price range in East China is between 7300-7350 yuan/ton, a cumulative decrease of 50-100 yuan/ton compared to last week.

Cost aspect: Due to the escalating geopolitical tensions, investors are concerned about the escalation of the Middle East conflict; The significant decrease in US crude oil inventories has provided support for oil prices. As of August 1st, the settlement price of the main contract for WTI crude oil futures in the United States was $76.31 per barrel. The settlement price of the main Brent crude oil futures contract is $79.52 per barrel. The crude oil analyst of Shengyi Society believes that in the short term, the situation facing crude oil is very complex, and crude oil may intensify its volatility. At present, it is necessary to pay attention to further developments in the Middle East situation, as the tense situation may continue to push up the risk premium of crude oil. At the same time, the expectation of the Federal Reserve cutting interest rates has also brought certain benefits to demand, and oil prices may continue to seek upward space. In the medium to long term, the supply uncertainty in the oil market is increasing, especially with the upcoming US presidential election. If the Republican Party wins, it may have a more profound impact on the oil market, and US crude oil production may be subject to policy increases. The future game of crude oil supply and demand may seek a rebalancing.

Supply side: Sinopec’s toluene quotations have generally decreased this week, but there are slight differences in the degree of adjustment among different underground sources. The company is operating normally, with stable equipment production and many products for personal use, resulting in stable production and sales. Among them, the East China Company quoted 7200 yuan/ton, the North China Company quoted 7350 yuan/ton, the South China Company quoted 7300-7350 yuan/ton, and the Central China Company quoted 7200 yuan/ton.

Demand side: The external market for xylene continues to decline, and the rigid demand support for toluene is relatively weak

On August 5th, Sinopec Sales Company temporarily stabilized the price of xylene, with the current execution price being 8500 yuan/ton. This price is implemented in East China, North China, Central China, and South China. Yangzi Petrochemical, Zhenhai Petrochemical and other units are operating stably and selling normally. As of August 2nd, CFR China’s closing price was 1005.33 US dollars/ton, a decrease of 3.34 US dollars/ton from last week.

On Friday (August 2nd), the Asian toluene market closed with mixed gains and losses, with the FOB South Korean closing price of $886-888/ton in August rising by $6/ton; The closing price of CFR China in August is 884-886 US dollars per ton, a decrease of 6 US dollars per ton.

Market forecast: The recent trend of crude oil on the cost side is weak, and the support on the cost side is weak. In terms of supply, the port cargo has slightly increased recently, and the supply is relatively loose. On the demand side, with the decline in market prices, some downstream enterprises have certain purchasing needs, and market trading is more active than before, which still provides some support for market sentiment. Overall, the toluene market is mixed with negative and positive factors, and it is expected that the market will mainly experience narrow fluctuations in the short term, with a focus on the operation of key downstream facilities in the future.

Since the end of April, the domestic acrylonitrile market price has continued to decline, with the mainstream self pickup price dropping from 10800 yuan/ton to around 8800 yuan/ton, a decrease of 18.5%, which has lasted for three months. At present, there is still no positive news in the market, and the supply-demand contradiction continues to exist. In the short term, the price of acrylonitrile may still have room for downward exploration.

The contradiction between supply and demand persists:

The price trend of acrylonitrile products mainly follows the logic of supply and demand. Due to the large number of maintenance and load reduction devices, the supply is temporarily tight, which stimulates price increases. Prices gradually rose from February to April this year; But starting from May, the maintenance equipment gradually resumed, and the capacity utilization rate of the acrylonitrile industry gradually increased from less than 65% to around 83%, with a significant increase in supply.

At the same time, downstream demand in various fields is gradually entering the off-season, especially in July when ABS and amide production rates are low, and consumption in other small and medium-sized downstream fields is also showing signs of weakening.

According to statistics, the supply-demand gap of domestic acrylonitrile products dropped to only 10000 tons in April, but rapidly expanded to 80000 tons in May, and remained above 50000 tons in June and July, with a very prominent surplus situation.

Significant increase in cost:

According to the trend chart, the acrylonitrile market fell rapidly in May, and the decline slowed down significantly from June to July, mainly due to increased cost pressure and acrylonitrile suppliers raising prices. Since the second half of June, the price of the main raw material propylene in the Shandong market has risen from around 6800 yuan/ton to over 7100 yuan/ton, resulting in a significant increase in the production cost of acrylonitrile and exacerbating the factory’s loss situation.

In this situation, it cannot be ruled out that some acrylonitrile plants will take production reduction measures, and the expected decrease in supply variables will slow down the pace of market quotations. However, up to now, apart from the major overhaul plan of Jilin Petrochemical from August to October, there are still no other units with maintenance or load reduction plans. Although the losses of acrylonitrile single products are gradually expanding, some acrylonitrile factories have been able to maintain stable production with the considerable benefits of by-products, especially the ACH MMA production profit, which is currently as high as 4000-5000 yuan/ton.

The downward trend of future prices is difficult to change:

The downward trend of product prices caused by supply and demand contradictions is difficult to change. In the short term, downstream demand for acrylonitrile is difficult to be optimistic. With the traditional off-season and poor economic situation, there is no obvious improvement in domestic and foreign terminal consumption. Therefore, positive support still needs to be found from the supply side. The trend of acrylonitrile plants will be the direct factor affecting the appearance of price turning points in the future.