[Industry Focus]：Epoxy resin oversupply, weak market operation

1. Raw Material Market Dynamics

1. Bisphenol A: last week, the price of bisphenol A in stock showed an upward trend. From January 12 to January 15, the bisphenol A market was stable, with manufacturers shipping according to their own production and sales rhythm, while downstream buyers who just need to purchase flexibly according to market conditions.

However, starting from Tuesday, the price of raw material pure benzene rose strongly, leading to a corresponding increase in the price of phenol ketone, thus increasing the production cost of bisphenol A. In the face of this situation, the willingness of producers and middlemen to rise has increased significantly. At the same time, the downstream market is also actively stocking, prompting the bisphenol A market trading activity. As a result, market prices rose to varying degrees across regions. In early trading on Thursday, the mainstream offer price of bisphenol A climbed to around 9600 yuan/ton, and the offer price in other regions also rose. However, due to the stagflation and small consolidation of upstream raw material prices, the purchasing enthusiasm of the downstream market has cooled down, and the high transaction situation has weakened.

Data show that the industry's operating rate reached 70.51 per cent last week, up 3.46 per cent from the previous month. By January 19, the mainstream negotiation price of bisphenol A in East China was 9500-9550 yuan/ton, up 75 yuan/ton from January 12.

2. Epichlorohydrin: last week, the epichlorohydrin market run smoothly. During the week, due to the increase in the price of raw materials propylene and liquid chlorine, as well as the weak adjustment of glycerin, the production cost of epoxy chloropropane prepared by propylene method increased, and the gross profit level decreased accordingly.

At present, the market supply and demand conditions are relatively weak, manufacturers are generally cautious, the price remains stable. It is worth noting that Dongying Liancheng, Binhua Group, Zhejiang Zhenyang and other installations are still in a state of parking. The production and self-use of other production enterprises are the main ones, and the resources available for in stock are relatively tight. However, some traders lack confidence in the market, resulting in the market low-cost supply still exists. Downstream market demand in the early replenishment after the saturation, new orders into the market inquiries decreased, coupled with the Spring Festival holiday approaching, some downstream enterprises may be early holiday, which further weakened the market trading atmosphere. At the same time, actual transactions can be negotiated flexibly.

On the device side, industry starts remained at 42.01 percent last week. As of January 19, the mainstream negotiation price of epichlorohydrin in East China is 8300-8400 yuan/ton.

2. supply analysis

last week, the domestic epoxy resin factory starts slightly improved. Specifically, the operating rate of the liquid resin was 50.15%, while the operating rate of the solid resin was 41.56%. The industry's overall operating rate reached 46.34 per cent, up 0 per cent from last week. From the operating state, most of the liquid resin devices maintain stable operation, while the solid resin devices maintain a normal level. Overall, the current industry operating rate is relatively low, on-site supply is sufficient.

Changes on the demand side of 3.

The downstream market demand as a whole presents the characteristics of just-needed procurement, and the demand is relatively limited. At the same time, some downstream enterprises have entered the parking state, further weakening the market demand.

4. market forecast

expected this week epoxy resin the market will remain low volatility. Price changes on the cost side are expected to remain stable, while demand follow-up in the downstream market will be limited. With some downstream enterprises have been delisted from the holiday, the market trading atmosphere may continue to maintain a deserted state. In this case, the market operators will be more cautious to observe the changes in market dynamics and demand conditions, while paying attention to the dynamics of the upstream and downstream markets and the development of demand conditions. epoxy resin the market will remain low volatility. Price changes on the cost side are expected to remain stable, while demand follow-up in the downstream market will be limited. With some downstream enterprises have been delisted from the holiday, the market trading atmosphere may continue to maintain a deserted state. In this case, the market operators will be more cautious to observe the changes in market dynamics and demand conditions, while paying attention to the dynamics of the upstream and downstream markets and the development of demand conditions.