[Industry Focus]：In November, the spot market of chemical raw materials showed a downward trend as a whole, with December or weak shocks.

declined in November, and the overall level showed a weak trend. Some products rose, bromine, lithium hydroxide, lithium carbonate, diethylene glycol rose 17.88 percent, 17.74 percent, 16.74 percent, 15.64 percent, respectively, glycerin is a sharp decline in the product, EVA, respectively, 31.80 percent, 26.66 percent, 19.71 percent, 6.66 percent, 19.71 percent, 19.26 percent.

affected the spot market of chemical raw materials in November: first of
, the intensity of demand contraction is large, and the supply side is loose. In November, according to the tracking statistics of the start-up of 66 chemical products, the start-up load of downstream products decreased month-on-month than that of upstream products, the demand side decreased, and the trading atmosphere was weak.
Secondly, the trend of international crude oil as the main concern of the chemical raw material side has affected the purchasing rhythm of the demand side. In November, international crude oil fell, bearish caution, demand-side operation enthusiasm declined.
third, the increase in transportation pressure will affect demand orders. In November, the national logistics and transportation were not smooth, and the transportation cycle and cost increased, which led to the decline of the supply flow of local chemical products and the increase of supply pressure.

December, the chemical market is facing factors such as a sluggish external environment, a slow domestic economic recovery, a decline in oiling costs, and a limited recovery in demand, and chemical prices are expected to be weak. The main reasons are as follows:
1. Increased global economic risks, the chemical operating environment is
internationally, the risk of global economic recession is gradually increasing, and liquidity is further contracting. Foreign economic forms are still underperforming, and the risk of recession is still growing, with European risks likely to be more pronounced. Inflation pressures have slowed, but remain high. The constraints of high inflation on downstream consumer and market investment are likely to deepen further, and the tightening of monetary policy in the United States and the European Central Bank is expected to continue to decline in foreign economic growth in the fourth quarter. Affected by the Fed's inflation decline exceeding expectations, the Fed may end a continuous 75 basis points at the December interest rate meeting and raise interest rates by 50 basis points. The slowdown in pace may not necessarily mean that the market monetary environment is substantially loose. In the short term, the risk of global stagflation is still increasing, market confidence is difficult to recover, and the overall concern is still large.

in the country, the fourth quarter of the domestic monetary easing policy tone remains unchanged, expanding investment, stable real estate may be the main form of economic stability. Although the domestic economic recovery is slow, the overall recovery momentum has been further consolidated under the promotion of a series of stable growth policies. It is expected that the "infrastructure manufacturing support, real estate drag" model will remain unchanged in December, but the possibility of real estate drag tends to weaken, overall investment growth may rise steadily, and the chemical demand side may receive some support. However, the current domestic and international economic environment is still weak, external demand is difficult to improve significantly, the domestic demand side is still weak. Therefore, the domestic chemical market in the short term operating environment is still low, commodity prices are still more likely to be weak. In November 2022, China's manufacturing purchasing managers' index (PMI) was 48%, down 1.2 percentage points from the previous month and down for two consecutive months, indicating a further slowdown in the economic recovery. Compared with the previous month, the production index and purchasing index were 47.8 and 47.1, respectively. 2 percentage points indicate that the production activities of enterprises continue to tighten in the short term. The index of new orders was 46.4 per cent, down 1.7 percentage points from the previous month, reflecting continued shrinking market demand and low market activity.

. International crude oil is expected to decline, the chemical products have a certain negative impact

international crude oil price fluctuations fell, the cost of chemical prices to form a negative limit. In November, oil prices fluctuated from high levels and US crude oil fell below the $80/barrel mark, mainly due to market concerns about demand, especially weakness in the Asia-Pacific region, which intensified market concerns about demand. On the supply side, supply disruptions in one European country were temporarily stranded because the price cap was higher than market expectations. Therefore, from both sides of supply and demand, it has a negative impact on the market and puts pressure on the decline in oil prices. Although the dollar index fell from a high, but the support for the oil market is limited, oil prices fell after the basic return to the beginning of the year.
expect that oil prices will still face downward pressure in December, and the weak support for chemical costs will still have a negative impact. OPEC held a + OPEC production meeting + in early December to maintain the existing production reduction policy to support the oil market weaker than market expectations. Of course, in the face of the external environment of interest rate hikes, oil demand in Europe and the United States is facing downward pressure, winter in the Asia-Pacific region is approaching, and oil demand is also facing weak pressure. As a result, the overall oil market volatility in the next month, the average month-on-month continued to decline. Due to the weakness of international crude oil, the impact of crude oil on the cost side of chemical products in December is relatively short, which may affect the downstream purchasing mentality.

3. Demand recovery limited chemical market weakening in November
, chemical market supply and demand at the same time contraction, downstream chemical load significantly contracted. In November, the starting load of chemical products showed a downward trend, and the decline was obvious. The average monthly operating load data of 66 major chemical products tracked by Zhuochuang Information showed that the average operating load fell to 62.91 in November, a decrease of 1.68 percentage points from the previous month and a year-on-year decrease of 1.12 percentage points. The main reason for the decline in operating load was that the weak demand side in November led to an increase in supply pressure, weak market confidence, and a decrease in market orders, which to a certain extent inhibited the production enthusiasm of enterprises, and market transactions showed a weak trend. From the start of the industrial chain this month, the downstream chemical load decline is higher than the upstream enterprises, the main downstream product enterprises are the first to be affected by the shrinking demand, the industrial chain rise conduction is relatively slow, the upstream chemical operation is slightly better than the downstream chemical, the start load decline is relatively narrow. In December, the positive boosting factors on the demand side of chemical industry are still weak, the economic recovery is slowing down, the recovery momentum is insufficient, the export of external demand is still not strong, and the investment policy of real estate in the largest downstream of domestic chemical industry may be delayed. It is expected that the weak demand side pattern may continue in December, the contradiction between supply and demand still exists, and the overall supply and demand are facing chemical industry or still showing weak expectations.

in December
, the chemical market may be weak impact, the main driving logic around the domestic and foreign economic downturn, the cost of crude oil weakness, the overall chemical demand downturn and other factors. First of all, the economic form at home and abroad is grim, and the operating environment of chemical products is still weak. The global economy will continue to face downward pressure from the Federal Reserve and major central banks. Under the influence of many uncertain factors such as inflationary pressures, public health events, and geopolitical conflicts, it is difficult for the global economy to perform well, and the operating environment of the bulk commodity market is sluggish. Second, the downward pressure on the crude oil side remains, and chemical support has weakened. Oil prices will remain constrained by weak demand. Considering that it is the main raw material reference for most chemical products, its downward trend has exacerbated the bearish atmosphere among market participants. In the case of demand has not been repaired, for most loss-making enterprises, the mentality of risk aversion is still obvious. In addition, supply and demand ends or turn to tighten, end demand or difficult to substantially repair. Local poor transportation may lead to increased downward pressure on logistics, still inhibit demand recovery capacity, market vitality still needs to be boosted. However, the state's policy of stabilizing the economic market has been gradually strengthened, and a package of policy measures and successive policies for stabilizing the economy have continued to be implemented. The policy conveyed by the market still needs to pay attention to good signals, and the follow-up supply and demand is still worth looking forward to.

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overall, the macro environment is weak, affecting the purchasing mentality of enterprises, and the shrinking market transaction volume leads to the narrowing of demand. Therefore, the demand is expected to be cautious and weak. Chemical price restrictions, crude oil is weak, and cost support is insufficient. It is expected that chemical prices may be weak in December. However, considering a series of positive impacts such as national policies to stabilize growth and real estate policies, focusing on downstream pre-Spring Festival inventory actions, the second half market may be expected.