Introduction: After entering 2022, the lack of demand seriously restricts the development of the maleic anhydride market, so price decline has become the norm. In the second half of the year, “golden Sep silver Oct” has become the sustenance of the maleic anhydride market, but it is still necessary to be cautiously optimistic.
From the perspective of cost: after entering 2022, the boom of the maleic anhydride industry has taken a sharp turn for the worse, and rising costs and falling prices have caused industry profits to shrink sharply. First, benzene-based maleic anhydride, already at a high cost, took the lead in losing, and the loss range continued to expand. Subsequently, the relatively low-cost n-butane-based maleic anhydride was also on the verge of losing in early May. Up to now, the domestic maleic anhydride butane process profit is -998 yuan/ton, and the benzene process profit is -985 yuan/ton. (The above profit margins calculate according to the theoretical formula, but there are few benzene method sources in the actual market, so the theoretical price is still calculated according to the benzene method price benchmark in June. If calculated according to the current market price of maleic anhydride, the loss of the benzene method process will reach – 1500 yuan/ton or more).
From the perspective of supply: with the 150,000-ton production plant in southern China last year and the new 200,000-ton production plant in central China put into operation in the first half of the year, the supply increased significantly in the first half of the year. However, since the beginning of May, the raw materials of benzene-based maleic anhydride have continued to be high, the pressure of loss has increased, and the benzene process has entered a shutdown period one after another. And since July, the operating capacity of the butane method has been in a state of decline, and the enthusiasm for starting the butane method has continued to decline under the influence of high costs and weak demand.
From the perspective of demand: the downstream unsaturated resin production capacity will continue to increase in 2022. According to statistics, the unsaturated resin production capacity will increase by 600,000 tons in 2022, of which 300,000 tons will add in the first half of the year, and there are still two units planned in the second half of the year. But the terminal sluggishness combined with the impact of the epidemic and other factors led to less than expected demand, the domestic real estate market boom back down, artificial stone, household coatings, and other terminal products demand is cold, infrastructure demand is not entirely forced, more negative superposition led to unsaturated resin industry production lower than the same period in previous years.
The traditional peak season still needs to be cautiously optimistic.
In the face of the current market trend of “endless decline,” upstream and downstream market participants generally pin their hopes on the recovery of demand brought about by the traditional peak season of “Golden Sep Silver Oct” in the third and fourth quarters of the second half of the year.
From a policy perspective: in order to promote the stabilization and recovery of the macroeconomy, in the second half of the year, the construction of old and new infrastructure facilities such as transportation, water conservancy, urban renewal, and new energy expect to continue to make efforts to play the role of economic “ballast stone.”
As for the real estate market, the state will continue to promote the steady and healthy development of the real estate market, support rigid and improved housing needs, consolidate the responsibilities of local governments, ensure the delivery of buildings and stabilize people’s livelihood. With the successful implementation of relevant policies, the downstream market demand in the second half of the year will be significantly better than that in the year’s first half.
However, although market participants have high expectations for the “Golden Sep Silver Oct,” it will take time for the favorable policies to be implemented and the upward transmission of the terminal prosperity to recover, and it will be challenging to bring about a significant increase in demand in the short term. At the same time, with the increasing expectations of a global economic recession, the international oil price will likely fluctuate in the second half of the year, which will also have a particular impact on the chemical market.
Overall, we still need to be cautiously optimistic about realizing the “Golden Sep Silver Oct” market.