Recently, a relevant person sent a letter stating that all raw materials are required to be settled in cash in addition to the high prices. The company and customers are settled monthly, which makes it extremely difficult for capital turnover. The price difference of the single raw material has made it impossible to continue production, and the order has now been accepted. All undelivered orders cannot continue to be produced and delivered.
As soon as the price increase letter came out, it caused an uproar in the manufacturing industry chain. As domestic and foreign commodity prices are constantly refreshing market perceptions, concerns about global inflation have been heard from all walks of life, and the continuous skyrocketing of upstream raw materials has brought a great impact on mid- and downstream companies. Many companies in the chemical industry said that the pressure on the cost side is now difficult to pass on through pure price increases, and the "not buying" in downstream industries has led to a significant reduction in the number of orders. Under the double pressure, some companies chose not to accept orders and stop production and wait and see for the market to improve.
Continued to skyrocket, chemical raw materials "nine consecutive rises"
The price increase in the first quarter has not yet ended. The rush to buy in the second quarter has won the "baton". The tight prices and the queuing of orders have helped the raw materials continue to rise. In the second quarter, a number of leading companies sent letters to raise the price, and the "six consecutive rises", the "seven consecutive rises" and the "nine consecutive rises" appeared frequently, and the prices are expected to continue to rise.
DOP is currently quoting 14,625 yuan/ton, and the average price in the mainstream market across the country has "nine consecutive rises", with a cumulative increase of 2,125 yuan/ton on the 9th.
SBS quoted at RMB 12,116.67/ton, "seven consecutive rises" after the holiday, with a cumulative increase of RMB 372.23/ton on the 7th, and once again exceeded RMB 12,000/ton during the year.
The average price of toluene in the mainstream national market has increased for six consecutive days, with a cumulative increase of 345 yuan/ton on the 6th.
The average price of acrylic acid in the national mainstream market has "five consecutive rises", with a cumulative increase of 750 yuan/ton on the 5th.
The average price of xylene in the mainstream national market has "five consecutive rises", with a cumulative increase of 292.5 yuan/ton on the 5th.
The average price of styrene in the mainstream market across the country increased for four consecutive days, with a cumulative increase of 925 yuan/ton on the 4th.
After May 1st Labor Day, the domestic market for n-butanol rose sharply. The domestic price of n-butanol in Shandong was 16,100 yuan/ton, which was an increase of 3,100 yuan/ton from the price at the beginning of the month, an increase of 23.85%. On the 6th, 7th, and 8th, the price of n-butanol in Shandong increased by around 1700-3000 yuan/ton compared with before the holiday, and the total increase in the three days reached 19.54%.
The domestic price of isooctyl alcohol in Shandong is 16,500 yuan/ton, which is an increase of 2,300 yuan/ton from the price at the beginning of the month, an increase of 16.20%. Overall, there is still an upward trend.
The methanol futures market still has strong short-term bullish sentiment, and the methanol spot market has slowly followed up. The average price of domestic methanol producers in Shandong area was 2,625 yuan/ton, and the price increased by 11.68% month-on-month and 23.32% year-on-year.
After the holiday, the crude benzene industry chain has shown good benefits frequently. In less than half a month, crude benzene rose by 18.08%, and hydrogenated benzene rose by 14.29%.
Returning from the May 1st long holiday, the domestic dimethyl ether market price has continuously increased. The average price in Henan was 3,727.50 yuan/ton, an increase of 17.03% from April 1. The ex-factory price of Henan Xinlianxin dimethyl ether is 3,830 yuan/ton, and the price is raised every day, with an overall increase of 380 yuan/ton.
In addition, the cost of product packaging is also increasing rapidly. An enterprise in Dongguan that produces 500 million iron cans per year started construction this year and found that the unit price of iron used in production has risen from more than 5,000 yuan/ton to more than 9,000 yuan/ton. This alone increases the cost by 20%. At present, many iron pipe companies have announced that they are out of stock, but they are actually preparing to adjust prices. Many paper companies have increased their prices by RMB 50-100/ton, cardboard factories have also increased by 3%-5%, and cartons have increased by 3%.
Downstream orders dropped sharply, costs were difficult to pass, chemical companies stopped accepting orders and "no longer play"
The supply of raw materials is in short supply and prices are skyrocketing, and the market is not unpopular. For midstream companies such as coatings and chemicals, the cost side is under greater pressure. If they want to keep profits from loss, or even be eliminated in the torrent, the only way to pass on costs is to "offense instead of defense" and use price increases. But is it really as simple as everyone thinks?
A foreign trader in the chemical industry said that the market in 2021 is far beyond everyone's imagination. I thought that the year of the black swan, which was invaded by the epidemic, has passed, and the impact will gradually weaken. The chemical workers are full of enthusiasm and look forward to "returning blood" in 2021 and sweeping away the haze of 2020. However, this year's glorious moment seems to be exceptionally short. There was a panic buying trend in the downstream market around March. The goods in hand were sold out and the orders were full, which boosted the confidence of the chemical industry.
However, the good times did not last long. In the second quarter, the price of raw materials continued to soar. Titanium dioxide, epoxy resin and other products refreshed their historical high prices. The supply of pigments and TGIC was in short supply for about 2 months. The emulsion giants sent letters successively, increasing by 1,000. Above RMB/ton, even filler products such as barium sulfate and calcium carbonate, which have always been stable in price, have begun to collectively increase. The curing agent has been out of stock frequently since March... Many companies said that they have never grabbed it. Goods, bought at high prices from peers, are also difficult to respond to. As a result, paint companies have seen white paint out of stock, and chemical companies have also affected their normal production due to frequent price increases and stock outs of upstream raw materials.
Some chemical companies feedback that the current operating rate of downstream industries is not high. The prices of domestic commodities such as energy, metals, and agricultural products have continued to rise, especially for manufacturing raw materials such as copper, aluminum, and steel. Compared with the same period last year, futures prices have basically increased by more than 50%, and spot prices have also increased by more than double digits. This has had a certain impact on industries such as automobiles, home appliances, clothing, and textiles. In the case of production disruptions, the terminal industry purchases decreased, and orders from chemical companies dropped significantly in April.
The raw materials continue to rise, the downstream stocks are light, and the pressure on labor costs and rents and water and electricity is increasing. Chemical companies can only choose to stop taking orders. Some companies bluntly say that if you do a single loss, it is better not to do it. The profit of the domestic PS industry has shrunk sharply, especially due to the impact of the benzene profit loss factor, and the recent start of construction hit a new low in 2021, and the decline was the largest this year.
In addition, the recent downstream buying of a variety of chemical products has not followed up well, and market transactions have declined. Customers of the downstream customers of butanol do not accept high prices and stop production and wait and see, which has a relatively large impact in the northern region. Many chemical companies ridiculed that there was no order for headaches before, but now there are orders that cause headaches. The more orders, the greater the loss. The April sales crown has been expelled...
Industry insiders said that compared with large leading companies that can lead the rise and guide customers to snap up purchases, small and medium-sized enterprises are not so competitive. Price increases may mean loss of customers, and price reductions can hardly guarantee product quality, which is a dilemma. Judging from the current growth trend of the chemical industry and the price increase information released by many giants in June and July, it is expected that the growth trend of the chemical industry in the third quarter will still be difficult to stop. Up". To do is to lose money, stop, and even more risk. Under multiple pressures, I am not sure whether I can persist until the day when the cloud sees the sky.
Source: Tiantianshuo Chemical
