Introduction
In the first quarter of 2022, the maleic anhydride market was hit by triple pressures such as rising costs, shrinking demand, and increased supply, and the market boom was significantly lower than that in the fourth quarter of 2021. Looking at the market outlook, with the weakening of the impact of emergencies and policy efforts, downstream demand is expected to recover in the second quarter, but cost and supply-side disturbances will continue to exist.
Price Performance – Center of Gravity Sharply Lower MoM
Price is a key indicator to measure the prosperity of the industry. Although the price of maleic anhydride has still risen compared with the same period in previous years, it has fallen significantly from a month-on-month perspective. According to statistics, taking the market price of maleic anhydride in East China as an example, the average price in the first quarter of 2022 was 11,567 yuan/ton, an increase of 21.25% over the same period last year, and a month-on-month decrease of 17.73%. This shows that compared with the fourth quarter of 2021, the maleic anhydride market boom in the first quarter of 2021 has declined significantly.
Performance on the supply and demand side – the pressure of excess supply increases
The downstream demand performance of maleic anhydride in the first quarter of 2022 was far less than expected, and the adjustment of the supply side was relatively lagging, resulting in the gradual increase in the pressure of oversupply in the first quarter, which became the main reason for restricting the market trend.
From the data point of view, the output of maleic anhydride in the first quarter of 2022 reached 291,200 tons, an increase of 10.64% month-on-month and 22.10% year-on-year respectively. Compared with previous years, during the period, the maintenance of maleic anhydride plants decreased, and the operating load remained high, while the volume of new plants such as Yuxin in Huizhou, Guangdong increased steadily, driving the output to continue to grow.
In terms of demand, the downstream demand in the first quarter was 194,800 tons, a year-on-year increase of 3.62%, but a month-on-month decrease of 29.19%, especially the decline in the production of unsaturated resin, the main downstream product, by 37.97% month-on-month. After saying goodbye to the strong recovery in the first half of 2020-2021, the growth rate of terminal real estate and other markets continued to decline. According to data from the National Bureau of Statistics, the newly started housing area in January-February 2022 fell by 12.2% year-on-year, indicating that terminal The market remains sluggish as a whole into 2022. After the bottom-up transmission, the resumption of work in the downstream industries of maleic anhydride represented by unsaturated resins after the Spring Festival holiday in February was far less than expected, and after March, major consumption areas such as East China and North China were hit by unexpected events. , the impact has not ended as of the publication date of this article.
Q2 Outlook – Demand is expected to recover, but supply and cost pressures remain
From the cost side, the geopolitical tensions in Eastern Europe may be difficult to ease in the short term. For the oil market in the next three months, it is expected that the oil market will remain at a high level as a whole, and it will be difficult for raw material prices to be supported by this.
From the perspective of the supply side, there are many maintenance plans for maleic anhydride plants in April. The total maintenance capacity of Yizheng Chemical Fiber and Puyang Shengyuan is about 250,000 tons, which can bring about a daily output loss of about 750 tons. positive impact. However, after the end of April, Qixiang Tengda, Rizhao Haiyou Petrochemical and other 150,000 tons of new production capacity will also plan to enter the market, and the market supply pressure in May should not be underestimated.
From the demand side, the current emergencies will continue to suppress the construction of the downstream industry. It is expected that with the improvement of the situation, the demand side is expected to usher in repairs after mid-April after the weather increases and the infrastructure industry exerts its strength.
On the whole, it is expected that the domestic maleic anhydride market will fluctuate at a high level from April to June 2022, and the price will show an inverted “V” trend. High cost will lay a solid bottom support for the market, and price fluctuations need to pay attention to the changes at both ends of supply and demand.