Last week, the maleic anhydride market ended the dull period of nearly a month and gradually started to rise, and the supply side became the main driving force.
Due to the lack of leading factors, the maleic anhydride market has fallen into a long period of silence since mid-June, and the mainstream ex-factory price has always been maintained in the range of 5400-5500 yuan/ton. However, after this week, the market has seen some prices increase from the general market. As of this Thursday, the increase in major markets has reached 100-400 yuan/ton. It is believed that the supply side is still playing the most important role in it.
Cost side-lack of presence
The impact of cost factors on the maleic anhydride market in the recent stage has almost disappeared. It can be said that there is no sense of existence, and the “culprit” of all this is naturally the recent weak international oil price. After international oil prices rebounded to the US$40/ton mark in late June, they continued to oscillate around this price level. The continuing deteriorating epidemic situation overseas has dragged down the global economy and the prospects for crude oil demand, making international oil prices lack further breakthrough motivation. At the same time, the advancement of OPEC’s production cuts also provides a strong bottom support for oil prices, and international oil prices are in the dilemma of weak upwards and limited downwards. Therefore, it has no clear guidance for the relevant downstream chemical product market.
Demand side-stable performance
From the demand side, although the domestic impact of the epidemic has basically disappeared, the overseas epidemic situation is still severe, some end products of unsaturated resin have been exported, and the recent floods in the Yangtze River have affected the start of local infrastructure projects. Demand growth in the resin market is weak. However, the domestic economic construction is still undergoing a relatively rapid recovery, which has provided a stable basis for the start of resin companies. Therefore, the start level of unsaturated resin companies has continued to be maintained at around 40%. Although stable downstream demand supports the stability of radial prices, it cannot promote the market to perform further.
Before this round of price increases, the long-term stable price trend enabled downstream companies to maintain on-demand purchases of Shun Logistics, and a large number of companies had low raw material positions. This week, the rapid increase in domestic and logistics prices drove the demand for replenishment of some downstream enterprises, and the market transaction volume therefore increased significantly.
Supply side-the main driving force
In the case of inaction on the cost and demand side, the supply side has become the main driver of this round of rising prices. Although the operating load of maleic anhydride plants is generally higher than that of the downstream market, the stable domestic market demand and the recovery of the foreign trade export market have caused the domestic maleic anhydride supply to continue to be in a tight balance recently, and most maleic anhydride manufacturers generally maintain a weak position. Last week, the maintenance plan of a large-scale manufacturer in East China came out. In anticipation of tighter supply, some buyers have increased their bullish expectations for the market outlook and entered the market in advance to purchase, and the inventory of maleic anhydride manufacturers has declined. With the further contraction of shipments and the increasing mentality of manufacturers to keep prices up, the rise of Shandong’s main factories at the beginning of the week started this round of gains.
Looking at the market outlook, the current position pressure of maleic anhydride manufacturers is low, some orders have a long order cycle, and the seller’s intention to sell is not high under the attitude of reluctance to sell, and the market’s short-term supply expectations are still tight. It is believed that there is still positive support on the supply side of the market outlook, and the maleic anhydride market may continue to have upward space.