In 2019, the chemical industry was affected by multiple events such as trade friction, frequent accidents, park closure, production suspension and rectification, with ups and downs throughout the year, ending at a low level at the end of the year. On the whole, the overall trend in the first quarter was relatively stable. In the second quarter, due to the “3.21″ water incident, the comprehensive safety inspection of the chemical industry, and the shutdown for rectification, the start-up and demand fell sharply. According to the data monitoring of the business community, the number of downward commodities in a single month accounted for 70% in the quarter. The improvement of the safety and environmental protection standard led to the adjustment of the industrial pattern, and overcapacity eliminated backward devices ushered in the chemical industry The large marginal improvement, as well as the increase of safety, environmental protection and survival pressure of small and medium-sized enterprises, is a huge challenge to the industry; the upgrading of trade war leads to the expected cooling of crude oil demand, and the sharp drop of oil price, and the chemical industry fell to the lowest point of the whole year at the end of the second quarter. International trade frictions have reduced the arrival of most chemical products in Hong Kong, prolonged production stoppage and insufficient supply of some chemical products. At the end of the third quarter, the supply-demand contradiction is on the rise. The industry is in a state of shortage of goods, and the market goes up crazily. At the end of September, it rose to the highest point of the year, and the number of chemical products that went up in August and September accounted for 50% – 60%. In the fourth quarter, with the high price of chemical raw materials, the terminal is hard to digest, most of them are on the edge of loss, the operating rate has declined sharply, and chemical products have declined in succession under the downturn of demand
According to the price monitoring of the business agency, there are 20 kinds of commodities in the list of commodity prices rising and falling in 2019, among which 16 kinds of commodities with an increase of more than 5%, accounting for 22.5% of the number of commodities monitored in the plate; the top three commodities are hydrochloric acid (181.48%), acetone (41.35%) and epichlorohydrin (33.02%). There are 51 kinds of commodities falling on a month on month basis, and 43 kinds of commodities falling by more than 5%, accounting for 60.6% of the number of commodities monitored in this sector; the top three products falling are sulfur (- 62.99%), lithium carbonate (- 39.51%) and TDI (- 38.02%). The average annual increase and decrease is – 4%. The overall decline was more or less.
Analysis of some sectors and industrial chains:
Fluorine chemical industry: the market of fluorine chemical industry is weak in 2019. From raw material fluorite to hydrofluoric acid, the downstream refrigerant industry has different procedures of decline. The fluorine chemical industry is sluggish and the terminal demand is weak. In 2019, fluorite, hydrofluoric acid, R22, R134a and aluminum fluoride declined by 20.34%, 24.84%, 6.31%, 21.02% and 32.42% respectively. The market trend of fluorine chemical industry shows a “W” trend. In the first quarter, the price dropped sharply. In this stage, with the warm weather, the supply of raw materials increased significantly, leading to the continuous decline of the market. The second quarter ushered in the peak season of refrigeration industry sales, air conditioning manufacturers actively prepared goods, the refrigerant industry started to rise, the demand for raw materials increased, so the fluorine chemical industry ushered in a rebound period. However, with the end of the sales season, the start-up of the refrigerant industry fell sharply. The start-up of the refrigerant industry fell to about 30%. At that time, the demand fell sharply, and the fluorine chemical industry market fell continuously. The fourth stage is from November to December. With the continuous drop of temperature, the supply of fluorite enterprises in the north is greatly reduced, and the support of raw material cost is gradually emerging. Hydrofluoric acid and refrigerant products usher in a small increase stage, but the demand has not improved significantly, and the increase range in this stage is limited. On the whole, in 2019, the market of fluorine chemical industry declined, some enterprises lost money, terminal demand did not improve, and the product price of the industry fell.
Fertilizer sector: looking back to 2019, the fertilizer industry stumbled over. As a whole, the market of chemical fertilizer industry in this year is fluctuating and falling: urea price dropped from 1952.50 yuan / ton at the beginning of the year to 1693.33 yuan / ton at the end of the year, down 13.27%; diammonium phosphate price dropped from 2775.00 yuan / ton at the beginning of the year to 2200.00 yuan / ton at the end of the year, down 20.72%; potassium chloride price dropped from 2420.00 yuan / ton at the beginning of the year to 2215.00 yuan / ton at the end of the year, down 8.47%. Although the price of nitrogen fertilizer was strong in the first half of the year and even increased, the subsequent increase was insufficient in power and support, and the price slowly decreased.
First quarter: the price is high and the competition is fierce. Although the winter storage and collection of fertilizer is relatively slow, the enthusiasm of downstream fertilizer preparation is poor, and the enterprise’s operating rate is also running at a low level, but in March, the urea price rebounded to a high level, rising all the way to a price of more than 2050 yuan / ton, making the fertilizer enterprise gain the confidence of price support again. Second quarter: the best way to go, but not in the peak season. Spring ploughing comes, and chemical fertilizer comes. In April, the spring market demand in Northeast China is large, the prices of various products have risen, and enterprises are moving fast. However, after the May 1st Festival, the demand of each region ended, and only a small amount of topdressing was found in Shandong and its surrounding areas. So the fertilizer market began to fall. Third quarter: the contradiction is prominent, and the price is further reduced. Although the fertilizer market gradually opened in autumn, the new orders of enterprises were not satisfactory, the inventory pressure of manufacturers increased, the upstream raw material market was weak, and the downstream dealers were cautious in fertilizer preparation, which led to the further decline of fertilizer market. Fourth quarter: winter storage is not enough, the market will not go. Due to the serious deficit of most dealers in winter storage last year, the financial support is not strong, and the wait-and-see situation is serious. In addition, the price of urea fluctuates, and the price of phosphate fertilizer and potash fertilizer falls again and again, which makes the downstream winter storage fertilizer lag behind.
Phenol ketone industry company: influenced by domestic and foreign economic situation and national safety inspection in 2019, phenol ketone and downstream products in China are facing severe challenges. At the beginning of the year, except for the increase of cyclohexanone’s stock in the factory before and after the Spring Festival, other products were stable and excessive as a whole, and most of them were in a weak running trend. However, March was an eventful autumn. After the 321 water incident, the national environmental protection inspection was carried out, the terminal products were severely squeezed, the raw materials were suppressed layer by layer, and the phenol ketone industry chain was in a downturn as a whole. Coincidentally, on March 22, the Ministry of Commerce decided to extend the investigation period of phenol anti-dumping duty for six months. In the case of no hope of increasing terminal demand, the favorable aspects that phenol market can use further shrank. On May 27, the preliminary anti-dumping decision of phenol was announced, which promoted the market rise like a flash in the pan and perfectly explained the cycle market. In the third quarter, butanone took the lead in the market, the factory was out of stock, and the market entered the state of one product in short supply. From the end of August to September, the growth rate was nearly 40% in just three weeks, followed by acetone isopropanol chain, which rose 40% in October. Subsequently, the pressure brought by the high cost of raw materials to the terminal is gradually prominent. The domestic phenol and ketone industry chain has different trends of ups and downs. The pure benzene phenol bisphenol a chain has been shaken hard, but the profit is also in the line of break even. The propylene acetone isopropanol chain has shown a downward trend, and the theoretical value has entered the state of loss.
Under the favorable background of higher crude oil price and reduced supply, the overall strong price sentiment is stronger. However, as the theoretical profit of production enterprises is still higher than the balanced profit and loss line, the downstream market’s response to the rise of raw materials is gradually lagging behind. Near the annual pass, the overall trend is weak. On the one hand, the basic raw materials are weak, the cost support is insufficient, and after the rapid rise in the early stage, the downstream is in high-speed conflict, and the negotiation appears rational decline. Although the price of downstream BPA rebounded under the strong support of cost, but the rebound power was insufficient and the increase was limited under the guidance of supply and demand fundamentals. The cost of isopropanol and MIBK has collapsed, and the terminal demand is not good, so the decline may be inevitable.
Bromine chemical industry: in 2019, the domestic bromine industry suffered Waterloo, and all products fell sharply in the year, with the largest decline in sulfur market, reaching 62.99%, caustic soda 32.89%, soda 26.22%, sulfuric acid 10.21% and bromine 11.5%. In the first quarter, affected by factors such as seasons and the convening of the two sessions, the industry’s overall start-up was limited, and the upstream and downstream performance was relatively weak; in the second quarter, the industry’s start-up gradually recovered, terminal demand picked up, and prices fluctuated and adjusted, and the industry was still slightly weak as a whole; in the third quarter, affected by factors such as the decline in production capacity and output, the prices of products such as caustic soda, soda, soda, sulfuric acid and other products gradually increased, while the production of sulfoberomide reached to In the fourth quarter, bromine production fell sharply, and other products production was relatively stable, but the end market demand was still depressed, so the price was adjusted by shocks. On the whole, the decline of bromine chemical industry chain in 2019 is mainly due to the weak demand. The situation of supply exceeding demand presented by the industry in this year has not been effectively solved. Under the guidance of supply and demand fundamentals, the industry trend is getting harder and harder to recover.
Propylene industry chain: in 2019, the price of domestic propylene market fluctuated frequently, but the overall situation declined, from high price at the beginning of the year to low price at the end of the year. In 2019, the domestic propylene production capacity increased significantly, and the supply side was relatively loose, which had a greater negative impact on the propylene market.
On the upstream side, several major events occurred in crude oil in 2019, which affected the international crude oil production and had a favorable impact on propylene in a certain period of time. On the other hand, the OPEC + meeting at the end of the year delayed the agreement on production reduction and strengthened the impact. After the rise of international crude oil, it began to rise steadily, but with a small range, which also played a role in raising propylene. However, OPEC + has delayed production reduction and the strengthening degree has been heard for a long time, and the good has been digested, so the good for propylene market is limited. Downstream, the performance of polypropylene market in 2019 is a typical imbalance between supply and demand, with an annual decline of 14.65%. The expansion of capacity growth has reached its highest since 2010. And this capacity expansion is expected to continue until 2021, and PP capacity will be in the stage of rapid expansion for a long time. In addition, the foreign trade of rubber and plastic industry in China is blocked to some extent, and the competition between domestic polymerization plants will be more and more fierce. At the same time, the upstream propylene market is volatile, which has limited support for PP. The follow-up of the growth of the downstream demand side cannot smooth the rapid expansion of domestic production capacity. Therefore, the business club believes that in 2019, PP fundamentals are long and short, and the market is weak and volatile in terms of results. Due to the tight supply, the market price of epichlorohydrin fluctuated upward in 2019, with an annual amplitude of 86.54%. In 2019, the market of n-butanol is constantly fluctuating, but the overall market price at the end of the first year seems to be stable. Octanol prices fluctuated and fell as a whole. In 2019, the phenol Market is really difficult, with an annual decline of 14.56% and an annual amplitude of 21.02%. Although the demand is general at present, although the port has arrived, it is still in a balance state of about 30000 tons, without a significant increase. In addition, both the import cost and the domestic production cost have reached the critical value, and the market is difficult to go up, but there is limited space for going down. In 2019, the acetone market was very addictive, falling below 3000 and rising to 6000. In 2019, the price of isopropanol in the domestic market fluctuated significantly, with an annual decline of 5.75% and an annual amplitude of 58.27%. The supply-demand relationship was greatly adjusted. Compared with 2018, the domestic demand decreased by nearly 120000 tons, but the export volume increased by 95000 tons. Secondly, the strength of environmental protection and security inspection is not reduced, and the downstream operating rate is relatively low. The rise of raw materials is also the main reason for price fluctuations.
Key up and down products of chemical industry:
Hydrochloric acid (+ 181.48%): the champion in 2019. Driven by the strong market of liquid chlorine, the comprehensive price of hydrochloric acid in Shandong Province “bucked the trend strongly” in 2019, with the annual maximum market price of 1100 yuan / ton in April and November, respectively.
Acetone (+ 41.35%): the acetone market in 2019 is very addictive. Due to the high inventory enterprises and the downstream demand pressure caused by the “3.21″ Yancheng water explosion, the price of acetone in the first half of the year once fell below 3000 yuan / ton; in the second half of the year, due to the sharp rise of upstream raw material price and the shortage of acetone inventory, the price rose sharply to 6000 yuan / ton. According to the monitoring data of business agency, the lowest price (quoted by manufacturers in East China) in 2019 is 2900 yuan / ton on April 5, and the highest price is 5962 yuan / ton on November 27, with an increase of 41.35% and an annual maximum amplitude of 105%.
Epichlorohydrin (+ 33.02%): according to the monitoring data of the business society, the market of epichlorohydrin in 2019 has experienced ups and downs, two big rises and falls, and the overall trend is upward. On January 1, the average price of enterprises was 10650 yuan / ton, and on December 25, 13900 yuan / ton, an increase of 30.52% in the year. Supply and demand is the key to the price rise and fall of epichlorohydrin.
Sulfur (- 62.99%): the port’s inventory keeps high and consumption is slow. The weak downstream phosphate fertilizer has been dragging down the demand of the sulfur market. In addition, the loose and falling price of the US gold plate makes the sulfur market difficult to find support and go down. The sufficiency and slow consumption of port resources still hinder the purchase of domestic players. With the passage of time, the US gold price and the spot market price fell in tandem, contributing to the extension of market bearish sentiment, and the market natural trend continued to decline.
Lithium carbonate (- 39.51%): in 2019, the price of lithium carbonate fell to a low point. As the downstream market was covered by pessimistic expectations, the supply and demand of lithium carbonate was relatively unbalanced, and the price of lithium carbonate was still low and volatile, and the supply and demand pattern of the spot market was still depressed. Near the end of the year, with the further production reduction of downstream material plants in the fourth quarter, it is difficult for smelters to ship even if the price is reduced. Enterprises may start to gradually reduce production to reduce the inventory level, and the prices of industrial grade lithium carbonate and battery grade lithium carbonate will be further under pressure.
TDI (- 38.02%): the domestic TDI market fell sharply in 2019. The supply and demand are unbalanced, the demand support is weak, the downstream raw material inventory is high, and the transaction atmosphere is light. The highest price of the whole year appears at the beginning of the year, and the lowest price appears on December 10. The market price is 11400.00 yuan / ton, which is about 7400 yuan / ton lower than the beginning of the year, with a decrease of 38.02% for the whole year.
In 2019, the overall low level of the chemical industry will be finished. In 2020, the global economic situation will still be complex and the prospect is not optimistic. But at present, the overall low level of the chemical industry may improve in a short time after the Spring Festival. At present, China’s bulk commodities are in a critical period of structural adjustment, industrial upgrading and innovative development. Chemicals are the key industries connecting the preceding and the following. I believe that 2020 will continue to forge ahead and develop rationally.