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Since the end of August, the domestic chemical market has bottomed out and rebounded. Although crude oil fluctuated greatly at the same stage and the price focus decreased, with the improvement of the marginal demand and the relatively low social inventory, the chemical market got rid of the shackles of crude oil and returned to the logic driven by fundamentals. As prices rebound, costs fall, chemical industry profits have been repaired, so the construction state also shows a recovery trend.
from late August to today, the domestic chemical market rebounded after bottoming out. As of September 9, Zhuochuang Information Organic Chemical Price Index closed at 1252.8. Chemical Fiber Price Index and Plastic Price Index were 1) on August 22. The chemical fiber price index and the plastic price index rose 1.1% and 1.4% respectively, while crude oil fell 4.0% percent over the same period. From the perspective of the rising range, 73 of the 100 chemical products counted by Zhuochuang Information have risen at this stage, accounting for 73%; 8 are stable, accounting for 8%; 19 have declined, accounting for 19%.
supply tightening and demand marginal improvement, the chemical market returns to basic logic
Recently, international oil prices fluctuated and fell. On September 7, the conflict between Russia and Ukraine hit a new low again, leading to a decline in cost support in the chemical market. However, due to the recent industry continued to limit production, supply-side tightening, the current social inventory is generally at a low level, is entering the "Golden Nine" traditional consumption season, market confidence slightly recovered, the demand side also slightly improved. Therefore, the chemical market got rid of the shackles of crude oil and showed a trend of shock rise. Recent trends in the chemical market and crude oil "parted ways" show that the market, after a long period of cost dominance, has returned to fundamental logic.
prices rise, costs fall, industry profitability repaired
has seen a decline in costs due to lower crude oil prices, and the chemical industry's operating conditions have improved after the recent rise. Of the 100 chemical products highlighted by Zhuochuang Information, 53 had improved operating conditions (including increased profits, loss-to-profit, and decreased losses), accounting for 53%, of which 34 had increased profits, from loss-to-profit (see Figure 2). 47 business conditions deteriorated (including profit reduction, expansion of loss range, from profit to loss) accounted for 47%. Compared with the general losses in the previous period, the current operating conditions of the chemical industry have improved, but from the perspective of the entire industry, the losses are still relatively large.
"Golden Nine" Lack of Quality, Beware of Reversing Supply and Demand Pattern
With rising prices and improved operations, the current market mentality has been repaired, especially for products with increasing profits. At present, the willingness of enterprises to produce has increased. Therefore, the start-up load of some products has been restored. According to Zhuochuang Information's statistics on 100 key chemical products, since the end of August, the 50% operating rate has rebounded, the 26% operating rate has been stable, and only the 24% operating rate has declined. Since the beginning of this year, the demand for chemical products has been continuously tested, especially in the case of sluggish performance in related terminal demand areas such as real estate and home appliances. Compared with previous years, the consumption of raw materials has been significantly reduced. Although it is the correct "golden nine silver ten" consumption season, but the current demand side of the repair efforts still need to be further strengthened.
Overall, the chemical market is expected to remain strong in the short term as demand improves. In addition, although crude oil rebounded again after the decline, the fluency of the recent decline has increased significantly, and the cost performance is unstable or affects market sentiment. In addition, terminal recovery is not strong, so there is relatively limited room for continued rise. In addition, in the case of improved demand and profit repair, supply has recovered, and the reversal of the potential supply and demand pattern in the later period also needs attention.
Source: Zhuochuang Chemical
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