Introduction
Despite the unfavorable start at the beginning of the year, the recent rapid increase in market prices has also pushed the profitability of maleic anhydride manufacturers to a new high during the year, and the gross profit margin in some regions has exceeded 40%.
The domestic maleic anhydride market has gained strong momentum recently. It can be seen from the data that this round of gains has gradually accelerated since its inception in early August. Especially in the past two weeks, the trend has been almost linear. It not only refreshed a new high price during the year, but also only one step away from the 2019 price high. As of press date, according to statistics, since the start of the price increase in early August, the ex-factory price of solid maleic anhydride in the Shandong market has increased by 1600-1900 yuan/ton, an increase of 28%-33%.
The direct impact of the rapidly rising price is the sharp expansion of the profit margin of maleic anhydride production enterprises. Judging from the profit trend of various processes in 2020, the profit of maleic anhydride has shown a typical trend of opening low and moving high since the beginning of the year. In the first quarter, the downstream demand for maleic anhydride under the influence of the new crown epidemic shrank severely, and the price continued to fall to a new low in the past 12 years since March. The profit margin of maleic anhydride was rapidly narrowed due to this impact, and benzomaleic anhydride has been even since the beginning of the year. It is at a loss. However, the decline of upstream raw materials in April also expanded, the pressure on the cost of maleic anhydride’s various processes was relieved, and the profit of the industry gradually turned into a profit, especially after the benzene process maleic anhydride fell sharply in the upstream pure benzene, the profit even realized the same as the normal butane process. Overtaken, and the profit of maleic anhydride has risen sharply after the start of this round of gains. According to statistics, as of the date of publication, the theoretical profit of domestic benzene-based maleic anhydride has reached 3016 yuan/ton, with a gross profit margin of 39.42%; Shanxi Coking’s benzene enterprise theoretical profit has reached 3306 yuan/ton, with a gross profit margin exceeding 40% and reaching 43.21%; The theoretical profit of n-butane method maleic anhydride also reached 2,478 yuan/ton, and the gross profit rate reached 32.18%. Since the beginning of the year, the average profit of domestic benzene-based maleic anhydride has expanded to 532 yuan/ton, an increase of 600% year-on-year, and the average profit of n-butane-based maleic anhydride has expanded to 811 yuan/ton, an increase of 72.19%.
The increase in maleic anhydride prices is certainly the main driving force for profit expansion, but the relatively low price of raw materials has laid the foundation for high profits in the current market. Recently, overseas sources have continued to arrive in Hong Kong, and the pressure on domestic ports of pure benzene has continued to increase. As of September 2, East China’s pure benzene port trade inventory reached 297,500 tons, an increase of 3,500 tons compared to August 26, an increase of 1.19% from the previous month. The downstream demand is not good, the fundamentals are under pressure, and the prices of pure benzene and hydrogenated benzene continue to stay at a low level around 3,000 yuan/ton. While the hot weather suppresses domestic demand for liquefied gas, the market for n-butane is also weak.
Looking at the market outlook, the current supply of maleic anhydride in the market is still tight, and the delivery cycle of maleic anhydride manufacturers has generally been extended to mid-to-late this month. In the short term, the enthusiasm for shipments is not good, and there is still room for upward adjustment of external quotations. While international oil prices are falling, the fundamentals of upstream raw materials are still weak, and it is difficult to see large fluctuations. Therefore, it is expected that the current high profitability of maleic anhydride processes will continue for a long time.