After the New Year’s Day, the domestic price of propylene glycol in Shandong soared from 12000 yuan/ton to 14000 yuan/ton, again refreshing a historical high, compared with the annual high of 12,600 yuan/ton in 2020, an increase of 11.1%. Looking back to 2020, the highest domestic propylene glycol price appears in mid-November, while the lowest price is 5,600 yuan/ton, which appears in early April. The annual average price is 7,896 yuan/ton. Overall, compared with 2019, the price trend in the second half of 2020 is higher. Combined with the favorable export policies, the domestic export orders increase, the domestic raw material PO price rises, and the cost side is also a big driving force.
According to customs data, China imported 81,000 tons of propylene glycol from January to November in 2020, an increase of 8.7% compared with the same period last year. From a monthly point of view, except January, February and November, other months have a certain extent of year-on-year growth. In January and February, due to the impact of the epidemic, the domestic downstream production rate was low, the overall demand was weak, and the import volume decreased significantly. The import volume of propylene glycol increased significantly from March to August, mainly because of limited overseas demand and improved domestic demand. Under the strengthening of domestic consumption promotion and investment and construction of downstream unsaturated resin, the domestic construction started to pick up, the overall construction rate increased compared with the previous period, and there was a certain purchase of raw materials. In November, the operation of some overseas installations was unstable, and the supply was limited. The import volume dropped sharply compared with last year.
From January to November in 2020, imports are mainly from Thailand, the United States, South Korea and Saudi Arabia, and the main representative brands are Dow and SKC. Among them, the imports from Thailand accounted for 33%, the United States 20%, South Korea 20%, Saudi Arabia 18%, comprehensive main imports accounted for 91%.
In terms of exports, the export volume of propylene glycol in the first 11 months of 2020 reached 119,000 tons, a decrease of 4% compared with last year. On a monthly basis, with the exception of March, April and November, exports were all lower than last year. On March 17, 2020, the State Administration of Taxation of the Ministry of Finance issued the Notice on Increasing the Export Tax Rebate Rate of Some Products, which included 1, 2-propylene glycol (product code: 29053200). The tax rebate rate of 1, 2-propylene glycol (product code: 29053200) was adjusted from 10% in April 2019 to 13%, which was obviously beneficial to the export. Since May, the export of propylene glycol has decreased significantly compared with previous years. The main downstream is in the off-season, and the overall demand is poor. Until November, seasonal demand returned, leading to an increase in overall export orders, and the impact of overseas epidemics, which is good for domestic demand.
From the perspective of destination countries, from January to November in 2020, China’s PG exports are mainly to the Russian Federation, India, Indonesia and other countries, among which the Russian Federation accounts for the largest proportion, up to 13%.
In 2020, shandong PO prices running interval unprecedented widening, regardless of high low height are in recent years have not arrived, PO for the whole year average price is 11928.77 yuan/ton, the overall price run, relatively modest flat in 18/19, obvious ups and downs, in addition to the influence of the epidemic in the beginning of this year, the subsequent supply and demand imbalance has led to such extreme price, on the whole year in the second half of the differentiation is larger, the price fluctuation cycle rhythm completely disrupted, upstream and downstream of epoxy propane contain power is not very obvious in the second half of this year especially, ciprofloxacin, factory gradually gain dominance in the game.
Throughout the year, the influence factors is more, a new epidemic throughout the year, has not retreated, crude oil tumbled out of control, and southeast Asia are different extent influence on market events such as anti-dumping, ciprofloxacin, norm, “inflation dropped” as years new capacity are affected by the outbreak delayed production relation also flat last year, together with many import side maintenance, supplies basic did not increase, but some of the new downstream, together with the late outbreak recovery is better in our country, and exports rebound effect, the demand side in the second half of the increase obviously, and is affected by the environment is not optimistic this year, the downstream and terminal generally cautious operation is given priority to, But late lead to more passive, imbalance between supply and demand situation, especially in the second half of the vast majority of the time are characterized by a seller’s market, ciprofloxacin, factory price and market movements all the year round year lows appear at the beginning of the outbreak in early April 6400 yuan/ton, the highest in the middle of October and December in late 18700 yuan/ton (shandong spot factory), both price as high as 12300 yuan/ton, the rate of 192.19%. Both are new records in recent years, showing extreme trends.
From the perspective of DMC/PG comprehensive profit, the annual average theoretical comprehensive profit in 2020 is 1518 yuan/ton, an increase of 30.6% compared with last year. The highest profit reached 6,619 yuan/ton in the middle of November. The high price of raw materials and the peak season of demand were both favorable, and the profit was relatively considerable. The lowest profit of last year was -684.34 yuan/ton, which appeared in the middle and late December. While PO updated its historical high, the price of propylene glycol also broke through the historical high, and the demand was high and the atmosphere of waiting and seeing was high. Due to the high cost pressure, some devices were stopped for maintenance, and the overall profit was inverted.
From the perspective of the main downstream unsaturated resin, the average market value of Shandong in 2020 is 7186 yuan/ton, compared with the average market price of 8415 yuan/ton in the same period last year, a decrease of 14.6%. The maximum value of 9400 yuan/ton appeared in mid-November; The minimum value was 6,300 yuan/ton, which appeared in mid-August. Unsaturated resin at home and abroad, the market range, some strong shocks, raw material and high cost of crude oil has a certain support, raise interest is not high but resin manufacturers, sales is subject to more, at present the south starts to be able to keep to the end of the month, the north big construction is good, in some parts of the north and surrounding hebei province starts falling, capacity utilization is low and small factories, at present most of the resin factory is given priority to with orders, production and sales with limited, for the raw materials is more wait-and-see attitude, price range.
In general, with the continuous release of new devices next year, PO gradually turns loose, and it is difficult for the market to appear such an extreme market. It is expected that it will return to the mainstream range near 10,000 yuan in the future, and propylene glycol will return to the market. Follow-up in the long run, no new capacity, propylene glycol and positive demand at home and abroad, and with good export policy, annual capacity utilization, effectively improve the future enterprise actively grasp the demand change, optimize the structure of foreign trade, increase the integration of upstream and downstream of the supporting device, improve the enterprise cost and anti-risk ability, and enhance international competitiveness and irreplaceability.