Pricing and Markets
August 4, 2022
Chinese Epoxy Update
Epoxy in August Cautiously Optimistic
ECHEMI 2022-08-01
In July, the liquid epoxy resin went down all the way. The highest average price in the month was 22,000 yuan/ton, and the lowest average price was 17,800 yuan/ton, a drop of 19.09%; from January to July, the highest average price during the period was 29,300 yuan/ton, and the lowest average price was 29,300 yuan/ton. The price was 17,800 yuan/ton, a drop of 39.25%.
As of the weekend (7.29), the market price of liquid epoxy resin continued to fluctuate within a week, with limited news changes. This was mainly due to limited price fluctuations at the cost side of resins, few offers from resin manufacturers to discuss one by one, and a small amount of downstream just needed replenishment. Most of the merchants focus on stable prices, and the trading atmosphere in the market is sluggish, and it is difficult to increase the volume of real orders.
Market outlook forecast: It is expected that the epoxy resin market price will remain weak and fluctuated in the short term, and pay close attention to the trend of upstream dual raw materials and changes in downstream wind power and electronics demand.
Wind power is the ballast stone of the epoxy market, and wind power is expensive. This year, the state’s requirement for wind power installed capacity is to exceed 55GW. However, in the first half of the year, the actual installation volume was only 14.5GW, which was more than half of the time, and the installation progress did not exceed half of the time. Therefore, after August, it will gradually enter the peak installation period, and the demand for resin for blades should increase.
The 40.5GW wind power blades to be installed in the second half of the year will theoretically consume 172,200 tons of liquid epoxy, which will be allocated to 5 months, and 34,400 tons per month. However, judging from the current situation, wind power companies have not yet accelerated their actions, and the curing agent/diluent supporting the blades has no signs of recovery. Therefore, the pulling effect of wind power in August may be limited, and it is hoped that the wind power will be installed in September and October set off a climax.
Electronic appliances are estimated to be out of play. Last year, due to the global epidemic, online classes and home office overdrafts consumed a huge amount of electronic products such as tablet computers, TVs, etc., which greatly stimulated the demand for epoxy resins for electronic products. Although consumer electronics are updated quickly, they also have a certain life cycle. The market capacity that was saturated last year cannot be replicated this year. Due to the decline of the market, the demand for electronic resins has also declined this year. We can only see if the traditional gold, nine silver and ten consumption seasons can bring some hope.
On July 28, a meeting of the Political Bureau of the Central Committee was held, which is second only to the Central Economic Work Conference. In the middle of the year, it connects the previous and the next, analyzes and studies the current economic situation, and deploys the economic work in the second half of the year.
At present, the internal and external environment is more complex and severe. The epidemic and economic recovery have reached a critical point. The economy and capital market have also reached a new crossroads.
Regarding the economic growth target, the meeting pointed out that “the economy must be stabilized”, “maintain the economic operation within a reasonable range, and strive to achieve the best results”, “the major economic provinces must bravely take the lead, and the qualified provinces must strive to achieve the expected economic and social development goals. “.
This is a relatively new statement. The current international and domestic environment is complex, and the global economy is facing high uncertainty. The International Monetary Fund has just lowered its growth forecast for major global economies again.
In the second quarter of the country, major cities were affected by the epidemic. In the first half of the year, GDP achieved 2.5%. It will be very difficult to achieve the annual target of 5.5% at the beginning of the year.
The draft did not mention the specific numerical target of 5.5, which means that the annual growth target of around 5.5% is not a rigid requirement, but the meeting called for ensuring that the economy operates within a reasonable range.
With flood irrigation, the requirement of 5.5 can be fulfilled under a substantial stimulus, but on July 19, the Prime Minister just said that macroeconomic policies should be drip irrigation accurately, and that super-large-scale stimulus measures, excess currency issuance, and future advances will not be introduced in order to achieve excessive growth goals.
It is also a good thing not to mention the rigid requirements of numbers, which means that the upper levels are more objective and realistic, no longer simply pursuing numbers, and appropriately lowering expectations, which is conducive to the adjustment of my country’s economic structure and the healthy and stable development of the medium and long-term economy.
After reading the draft, it is not advisable to be overly optimistic about the economy, stock market and property market in the second half of the year. Under the condition of ensuring price stability in the second half of the year and the completion of the employment target, in the end, the economic growth rate will be slower, as long as it is acceptable within a reasonable range.
Therefore, under the premise that the national economic growth rate is slowing down, our hopes for epoxy resin in August should not be too optimistic.
August 4, 2022
Chinese Epoxy Update
Epoxy in August Cautiously Optimistic
ECHEMI 2022-08-01
In July, the liquid epoxy resin went down all the way. The highest average price in the month was 22,000 yuan/ton, and the lowest average price was 17,800 yuan/ton, a drop of 19.09%; from January to July, the highest average price during the period was 29,300 yuan/ton, and the lowest average price was 29,300 yuan/ton. The price was 17,800 yuan/ton, a drop of 39.25%.
As of the weekend (7.29), the market price of liquid epoxy resin continued to fluctuate within a week, with limited news changes. This was mainly due to limited price fluctuations at the cost side of resins, few offers from resin manufacturers to discuss one by one, and a small amount of downstream just needed replenishment. Most of the merchants focus on stable prices, and the trading atmosphere in the market is sluggish, and it is difficult to increase the volume of real orders.
Market outlook forecast: It is expected that the epoxy resin market price will remain weak and fluctuated in the short term, and pay close attention to the trend of upstream dual raw materials and changes in downstream wind power and electronics demand.
Wind power is the ballast stone of the epoxy market, and wind power is expensive. This year, the state’s requirement for wind power installed capacity is to exceed 55GW. However, in the first half of the year, the actual installation volume was only 14.5GW, which was more than half of the time, and the installation progress did not exceed half of the time. Therefore, after August, it will gradually enter the peak installation period, and the demand for resin for blades should increase.
The 40.5GW wind power blades to be installed in the second half of the year will theoretically consume 172,200 tons of liquid epoxy, which will be allocated to 5 months, and 34,400 tons per month. However, judging from the current situation, wind power companies have not yet accelerated their actions, and the curing agent/diluent supporting the blades has no signs of recovery. Therefore, the pulling effect of wind power in August may be limited, and it is hoped that the wind power will be installed in September and October set off a climax.
Electronic appliances are estimated to be out of play. Last year, due to the global epidemic, online classes and home office overdrafts consumed a huge amount of electronic products such as tablet computers, TVs, etc., which greatly stimulated the demand for epoxy resins for electronic products. Although consumer electronics are updated quickly, they also have a certain life cycle. The market capacity that was saturated last year cannot be replicated this year. Due to the decline of the market, the demand for electronic resins has also declined this year. We can only see if the traditional gold, nine silver and ten consumption seasons can bring some hope.
On July 28, a meeting of the Political Bureau of the Central Committee was held, which is second only to the Central Economic Work Conference. In the middle of the year, it connects the previous and the next, analyzes and studies the current economic situation, and deploys the economic work in the second half of the year.
At present, the internal and external environment is more complex and severe. The epidemic and economic recovery have reached a critical point. The economy and capital market have also reached a new crossroads.
Regarding the economic growth target, the meeting pointed out that “the economy must be stabilized”, “maintain the economic operation within a reasonable range, and strive to achieve the best results”, “the major economic provinces must bravely take the lead, and the qualified provinces must strive to achieve the expected economic and social development goals. “.
This is a relatively new statement. The current international and domestic environment is complex, and the global economy is facing high uncertainty. The International Monetary Fund has just lowered its growth forecast for major global economies again.
In the second quarter of the country, major cities were affected by the epidemic. In the first half of the year, GDP achieved 2.5%. It will be very difficult to achieve the annual target of 5.5% at the beginning of the year.
The draft did not mention the specific numerical target of 5.5, which means that the annual growth target of around 5.5% is not a rigid requirement, but the meeting called for ensuring that the economy operates within a reasonable range.
With flood irrigation, the requirement of 5.5 can be fulfilled under a substantial stimulus, but on July 19, the Prime Minister just said that macroeconomic policies should be drip irrigation accurately, and that super-large-scale stimulus measures, excess currency issuance, and future advances will not be introduced in order to achieve excessive growth goals.
It is also a good thing not to mention the rigid requirements of numbers, which means that the upper levels are more objective and realistic, no longer simply pursuing numbers, and appropriately lowering expectations, which is conducive to the adjustment of my country’s economic structure and the healthy and stable development of the medium and long-term economy.
After reading the draft, it is not advisable to be overly optimistic about the economy, stock market and property market in the second half of the year. Under the condition of ensuring price stability in the second half of the year and the completion of the employment target, in the end, the economic growth rate will be slower, as long as it is acceptable within a reasonable range.
Therefore, under the premise that the national economic growth rate is slowing down, our hopes for epoxy resin in August should not be too optimistic.
July 28, 2022
Chinese Propylene Oxide Overview
Propylene oxide (PO) is the third largest propylene derivative after polypropylene and acrylonitrile. It can be made into polyurethane foam, it can also be made into fourth-generation detergent non-ionic surfactant, oil field demulsifier, pesticide emulsifier, etc. Derivatives of propylene oxide are widely used in furniture, home appliances, automobiles, construction, coatings and other industries. The production process of propylene oxide is mainly divided into direct oxidation method (HPPO), co-oxidation method (PO/SM or PO/TBA-MTBE) and chlorohydrin method (CHPO). The chlorohydrin process technology is relatively mature, the production process is relatively safe, and the investment required is small. With the relevant guidance documents promulgated by the government in 2011 and the state’s goal of “carbon peaking” and “carbon neutrality”, various administrative regions have implemented “dual control” measures. Under the overall environmental protection policy, the propylene oxide chlorohydrin method will generate more “three wastes”, and the cost of environmental protection treatment will be higher in the later stage. It is expected that with the continuous development of the industry, the co-oxidation method and the direct oxidation method will continue to improve. 
Since March 2020, the prices of propane and naphtha (hydrogenation) in my country have shown a continuous growth trend, mainly due to the rise in crude oil prices and the accumulation of demand for enterprises to resume work and production after the epidemic. On the whole, since 2020, upstream raw materials The increase in part led to the increase in the price of propylene oxide. The main products downstream of propylene oxide are polyether polyol, propylene glycol methyl ether, dimethyl carbonate, propylene glycol ether, etc. Polyether polyol is the largest downstream of propylene oxide, accounting for about 77.2% of the demand for propylene oxide. It is mainly used in the production of polyurethane foam. Its terminal downstream mainly includes white goods, building materials (mainly coatings), furniture and automobiles. In addition, the downstream product DMC (dimethyl carbonate), as the main lithium battery electrolyte solvent (transesterification method), benefits from the continuous growth of downstream new energy vehicle demand, and is expected to become a key demand growth point for propylene oxide. In 2021, as the domestic production capacity continues to be put into operation, the production capacity of propylene oxide in China continues to grow. In addition, the industry maintains a high degree of prosperity in the first half of the year, and the overall output rises significantly. Throughout the year, the output still increased by more than 30%. According to data, my country’s propylene oxide output in 2021 will be 3.46 million tons, a new high in recent years. 2023 is expected to be the year with the most new capacity additions, reaching 2.78 million tons. In the future, with the release of new production capacity, the supply of propylene oxide in my country will be able to meet the continuously growing demand, the import dependence is expected to decrease, and the supply and demand of propylene oxide market will tend to be relaxed. Future global market opportunities for propylene oxide in China In 2020, the Ministry of Commerce opened restrictions on the export of ECH for direct oxidation and co-oxidation processes; Weak domestic demand coupled with the expansion of production capacity, by the end of 2022, a total of nearly 2.5 million tons of new production capacity will be started. The import volume of propane will be reduced to less than 100,000 tons, and there will be an obvious turning point in the import and export next year)
If you have interesting about this material, please feel free to contact us.(chemical@echemi.com)
July 28, 2022
Chinese Propylene Oxide Overview
Propylene oxide (PO) is the third largest propylene derivative after polypropylene and acrylonitrile. It can be made into polyurethane foam, it can also be made into fourth-generation detergent non-ionic surfactant, oil field demulsifier, pesticide emulsifier, etc. Derivatives of propylene oxide are widely used in furniture, home appliances, automobiles, construction, coatings and other industries. The production process of propylene oxide is mainly divided into direct oxidation method (HPPO), co-oxidation method (PO/SM or PO/TBA-MTBE) and chlorohydrin method (CHPO). The chlorohydrin process technology is relatively mature, the production process is relatively safe, and the investment required is small. With the relevant guidance documents promulgated by the government in 2011 and the state’s goal of “carbon peaking” and “carbon neutrality”, various administrative regions have implemented “dual control” measures. Under the overall environmental protection policy, the propylene oxide chlorohydrin method will generate more “three wastes”, and the cost of environmental protection treatment will be higher in the later stage. It is expected that with the continuous development of the industry, the co-oxidation method and the direct oxidation method will continue to improve. Since March 2020, the prices of propane and naphtha (hydrogenation) in my country have shown a continuous growth trend, mainly due to the rise in crude oil prices and the accumulation of demand for enterprises to resume work and production after the epidemic. On the whole, since 2020, upstream raw materials The increase in part led to the increase in the price of propylene oxide. The main products downstream of propylene oxide are polyether polyol, propylene glycol methyl ether, dimethyl carbonate, propylene glycol ether, etc. Polyether polyol is the largest downstream of propylene oxide, accounting for about 77.2% of the demand for propylene oxide. It is mainly used in the production of polyurethane foam. Its terminal downstream mainly includes white goods, building materials (mainly coatings), furniture and automobiles. In addition, the downstream product DMC (dimethyl carbonate), as the main lithium battery electrolyte solvent (transesterification method), benefits from the continuous growth of downstream new energy vehicle demand, and is expected to become a key demand growth point for propylene oxide. In 2021, as the domestic production capacity continues to be put into operation, the production capacity of propylene oxide in China continues to grow. In addition, the industry maintains a high degree of prosperity in the first half of the year, and the overall output rises significantly. Throughout the year, the output still increased by more than 30%. According to data, my country’s propylene oxide output in 2021 will be 3.46 million tons, a new high in recent years. 2023 is expected to be the year with the most new capacity additions, reaching 2.78 million tons. In the future, with the release of new production capacity, the supply of propylene oxide in my country will be able to meet the continuously growing demand, the import dependence is expected to decrease, and the supply and demand of propylene oxide market will tend to be relaxed. Future global market opportunities for propylene oxide in China In 2020, the Ministry of Commerce opened restrictions on the export of ECH for direct oxidation and co-oxidation processes; Weak domestic demand coupled with the expansion of production capacity, by the end of 2022, a total of nearly 2.5 million tons of new production capacity will be started. The import volume of propane will be reduced to less than 100,000 tons, and there will be an obvious turning point in the import and export next year)
If you have interesting about this material, please feel free to contact us.(chemical@echemi.com)
July 26, 2022
Natural Gas Spreads Between Europe and U.S.
EU Natural Gas Prices Soar As Gazprom Readies Nord Stream Cuts, US NatGas Hits 14-Year High
by Tyler DurdenTuesday, Jul 26, 2022 – 09:16 AM
European natural gas futures extended gains by 12% after Russian state-owned energy producer Gazprom PJSC unexpectedly announced it would halt a Nord Stream 1 turbine at its Portovaya compressor station from Wednesday. Simultaneously, US NatGas futures have spiked to 14-year highs.
Russian NatGas supplies to Europe via Nord Stream pipeline fell to 38% capacity from 40% on Tuesday, ahead of a more significant cut from current levels to just 20% on Wednesday.
In a statement, Gazprom said the Nord Stream pipeline would be pumping 33 million cubic meters a day, or 20% of capacity, from Wednesday, adding another turbine for the pipeline will be taken offline due to maintenance work.
Kremlin spokesman Dmitry Peskov said another Nord Stream turbine has “problems” and will be taken offline for maintenance.
Peskov noted a turbine sent to Canada earlier is “en route” but didn’t specify its exact location.
Western sanctions prolonged the average maintenance time of the Nord Stream.
“The situation is critically aggravated by the restrictions and sanctions imposed against our country,” the Kremlin spokesman continued.
Russian state media reported Monday that the turbine recently serviced in Canada by Siemens Energy AG had finally received export paperwork that will allow it to be shipped from Germany to Helsinki, Finland.
Nord Stream’s upcoming capacity declines sent Wholesale European NatGas futures up 12% to 196 euros. Prices have jumped more than 20% in two sessions and are near highs seen last winter at more than 200 euros.
EU Natgas prices are trading at an oil-barrel-equivalent price of $333….
Across the Atlantic, US NatGas futures extended gains, up more than 10% to $9.62, a 14-year high, amid concerns about hot weather and tight supplies.
“Although the magnitude and speed of recent natural gas price gains point to contributing non-fundamental market dynamics, supportive fundamentals are nonetheless the primary driver,” EBW Analytics Group wrote in a note to clients.
“Fundamentally, scorching hot weather is the predominant bullish driver,” the firm added.
There’s also reason to believe that tighter European supplies would result in more US LNG exports abroad.
For more context, European NatGas 1m forward is trading at a massive $48 spread over front-month US NatGas futures – almost 5x its historical peak…
Europe’s energy crisis continues to worsen, and there is no immediate relief in sight as this coming winter could be a cold one.
“This is not the end of Russia’s weaponization of natural gas flows, in our view, and there remain few near-term alternatives for even current reduced flows to the EU – lending [to] ongoing upside price risks,” RBC wrote last week in a note to clients.
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