The phthalic anhydride market will first rise and then fall in 2024

According to the Commodity Market Analysis System of Shengyi Society, as of December 31st, the price of phthalic anhydride in neighboring countries was 6600 yuan/ton, which first increased and then decreased compared to the price of phthalic anhydride of 7662.50 yuan/ton on January 1st, with an overall decrease of 13.87%. The price of raw material ortho xylene first rose and then fell, and the cost support of phthalic anhydride was insufficient. In addition, the price of plasticizers fluctuated and fell, putting great pressure on the price of phthalic anhydride to decline; Plasticizer companies are operating at a high level, and the demand for phthalic anhydride procurement is active, which still supports the demand for phthalic anhydride.

Annual production capacity statistics of phthalic anhydride

From the production capacity statistics chart of phthalic anhydride, it can be seen that the production capacity of phthalic anhydride has been surplus for many years, and the operating rate of phthalic anhydride is about 60%. The phthalic anhydride industry is facing significant supply-demand contradictions. Due to overcapacity, the situation of oversupply in the market has intensified, leading to a continuous decline in the price of phthalic anhydride.

In 2024, the price of raw material ortho benzene first rose and then fell

According to the Commodity Market Analysis System of Shengyi Society, as of December 31st, the price of ortho xylene was 6700 yuan/ton, which first increased and then decreased compared to the price of 7600 yuan/ton on January 1st, with an overall decrease of 11.84%. In 2024, the price of ortho phthalic anhydride will decline, and the cost of ortho phthalic anhydride will decrease, increasing the downward pressure on ortho phthalic anhydride. The weak adjustment of industrial naphthalene prices has led to a decrease in the cost of naphthalene phthalic anhydride. There is significant downward pressure on the overall cost of phthalic anhydride raw materials and the price of phthalic anhydride.

Demand side: Significant decline in DOP market in 2024

According to the Commodity Market Analysis System of Shengyi Society, as of December 31st, the DOP price was 8226.25 yuan/ton, a significant decrease of 31.97% compared to the DOP price of 12061.67 yuan/ton on January 1st. The price of plasticizer DOP will continue to decline in 2024. Although the price of plasticizer DOP briefly increased in April, May, September, and October due to the impact of peak and off peak seasons, the overall downward trend is difficult to change. In 2024, the supply and demand of the plasticizer industry chain will be relatively balanced, and the price of plasticizer DOP will decline, which is negative for the raw material phthalic anhydride market.

Future forecast

According to the data analyst of Shengyi Society’s phthalic anhydride products, in terms of cost, the price of ortho xylene has fallen, the price of industrial naphthalene is weakly consolidating, the cost of phthalic anhydride has decreased, and there is significant pressure for the cost of phthalic anhydride to decline; In terms of supply and demand, oversupply of phthalic anhydride has become the norm, with limited support for its upward trend and significant downward pressure. Overall, there is significant pressure for cost reduction and oversupply, and it is expected that the phthalic anhydride market will experience a weak decline in the future.

Review of Acetic Acid Market in 2024

The domestic acetic acid market will continue to fluctuate in 2024, with overall prices falling weakly. According to the Commodity Market Analysis System of Shengyi Society, the average price of acetic acid at the end of the year was 2970 yuan/ton, an increase of 250 yuan/ton from 3200 yuan/ton at the beginning of the year, with an overall decline of 7.19%. From the annual trend, the highest price of acetic acid was 3675 yuan/ton, appearing in mid August, and the lowest price was 2770 yuan/ton, appearing in early November, with a maximum amplitude of 24.63%.

From the monthly K-bar chart of acetic acid in 2024, the price fluctuated throughout the year, and the specific analysis can be divided into four stages:

Interval oscillation (January to June), frequent maintenance plans for acetic acid plants in the first half of the year, and most companies’ plant changes are relatively short, resulting in insufficient sustainability of positive news. In addition, downstream purchases are mainly long-term, and are not greatly affected by prices, which actually has a certain degree of suppression on the rise of acetic acid prices, leading to a decline in acetic acid prices after multiple increases.

Strong upward trend (mid July to mid August), during which there were many unexpected shutdowns of equipment and some maintenance delays, resulting in concentrated factory maintenance and a significant decline in the utilization rate of acetic acid production capacity. The market supply was reduced, and downstream replenishment sentiment was strong, supporting the strong upward trend of acetic acid market prices.

Weakly bottoming out (late August to early November), with the recovery of maintenance equipment, the supply of acetic acid in the market has increased, and the supply-demand contradiction in the market has gradually emerged. Traders are eager to settle for safety, and the price of acetic acid continues to decline. However, downstream demand is not as expected, and the price decline does not decrease. Manufacturers’ shipments are hindered, inventory pressure increases, and the mentality of buying up and not buying down leads to a continuous bottoming out of acetic acid prices.

Narrow range upward trend (mid November to December), supply side news released again, with some facilities shutting down and reducing load, resulting in a slight decrease in capacity utilization rate, which brings certain benefits to the market. Although the on-site supply is still high, the phased reduction has also driven the recovery of acetic acid prices.

Outlook for 2025:

In terms of supply, driven by considerable profits, the production capacity of acetic acid will continue to increase in 2024, with a production capacity of 12 million tons within the year. The domestic supply performance is sufficient, and there are still plans to add new production capacity for acetic acid in the future. It is expected that 5.9 million tons will continue to be put into operation in 2025, and there may be overcapacity at that time. The expected price of acetic acid in 2025 is weak.

In terms of imports and exports, according to data released by the General Administration of Customs, the performance of China’s acetic acid import market in 2024 is relatively weak. From January to November, the cumulative import volume of acetic acid in China was 33200 tons, a decrease of 6800 tons compared to the same period last year; The cumulative export volume from January to November was about 1.0278 million tons, an increase of 269500 tons or 35.54% compared to the same period last year. Domestic acetic acid is running weakly, and the export market is increasing.

In terms of demand, new production capacity is planned to be put into operation for downstream products such as PTA, acetate esters, and vinyl acetate in 2025. There may be some favorable support on the demand side, but downstream digestion will mainly focus on long-term production, and follow-up needs to be monitored in the later stage.

Overall, the supply growth rate of acetic acid market in 2025 is significantly higher than the demand growth, and the supply-demand contradiction in the market continues. The price market continues to be weak and volatile. In the future, specific attention should be paid to the supply capacity allocation, export market, and downstream follow-up situation.

In 2024, there will be no new production capacity added to the domestic acrylonitrile market, coupled with an increase in parking and production cuts. The temporary supply tightening will drive up prices and restore profits, resulting in a wide range of fluctuations in the acrylonitrile market. At the beginning of the year, the price was 9816 yuan/ton, and at the end of the year, it was 9316 yuan/ton, a decrease of 5.05% compared to the beginning of the year; The high point of the year is 10863 yuan/ton, the low point is 8067 yuan/ton, and the amplitude is 34.66%.

Starting from February, the supply gradually decreased and the market opened up an upward channel. Although the overall downstream demand growth during this period was lower than expected, the fundamentals still showed a temporary tightening trend, which stimulated the gradual rise of acrylonitrile prices. In April, the increase was significantly expanded, and the price quickly surged to the highest point of the year. Starting from May, the industry’s capacity utilization rate gradually increased to over 80%. At the same time, downstream demand entered the traditional off-season from June to August. Under the contradiction between supply and demand, acrylonitrile prices continued to decline, and in late August, prices fell to the lowest point of the year.

Production losses combined with inventory pressure have led to some acrylonitrile factories voluntarily reducing production, while major factories in East China have reduced their equipment load, resulting in continued increase in cost pressure. In the last week of August, the domestic acrylonitrile market bottomed out and rebounded after nearly four months of decline. However, due to the lack of substantial improvement in fundamentals and the discontinuous follow-up of actual demand, the domestic acrylonitrile market entered a consolidation state after a rapid rise at the end of August.

In late October, due to the planned maintenance, fault reduction, and shutdown of some manufacturers’ facilities in East China, the overall industry production was at a low level, which stimulated the price of acrylonitrile to rise again. At the end of the year, on the one hand, the price of raw material propylene fell, while the previously shut down acrylonitrile plant was restarted again, and the supply side rebounded, causing a slight decline in acrylonitrile prices again.

Outlook for Acrylonitrile Market in 2025

Cost aspect: Peak production capacity of propylene, expected decrease in acrylonitrile cost aspect

2024-2025 will still be the peak period for the production of propylene, and the propylene production capacity with PDH as the production path will converge and be put into operation. In 2024, the new production capacity will be 6.35 million tons per year, and the domestic propylene production capacity base will be increased to 70.44 million tons per year. The trend of propylene production capacity exceeding propylene consumption is further expanding. 2025 is still the peak stage for propylene production capacity investment, and propylene production capacity with PDH as the production path will be intensively put into operation. With a significant increase in propylene supply, supply side pressure will further increase, which will have a certain negative impact on the propylene market.

The production process of all acrylonitrile plants in China is the propylene ammonia oxidation method, which usually requires 1.05 tons of propylene and 0.5 tons of synthetic ammonia to produce 1 ton of acrylonitrile. In the production process of acrylonitrile, the overall proportion of raw material cost is around 75%. For acrylonitrile factories, the main raw material propylene is mostly self produced, so its cost is closely related to the production cost of raw material propylene.

Based on a comprehensive analysis of crude oil and supply and demand, the supply and demand as well as cost pressures in the propylene market will continue to rise in 2025. It is expected that the center of gravity of propylene prices may decline compared to 2024. However, due to the continued high volatility of international crude oil expectations and the good support of propylene costs, the expected decline is relatively controllable. Taking the Shandong market as an example, it is expected to fluctuate within the range of 5000-7000 yuan/ton in 2025, with high-frequency fluctuations in the range of 5500-6500 yuan/ton. The low point of market prices is expected to occur in the first quarter, and the high point is expected to occur in the third quarter.

Supply side: Acrylonitrile production capacity continues to expand, supply side expectations continue to increase

By the end of 2024, the total production capacity of acrylonitrile in China will remain at 4.399 million tons per year, and the annual capacity utilization rate of the acrylonitrile industry will be around 78.34%.

However, according to statistics, there are multiple sets of new production capacity plans totaling 1.31 million tons per year planned to be put into operation in China by 2025. The increase in supply will bring pressure to the acrylonitrile market in 2025. At that time, the number of domestic acrylonitrile production enterprises will also increase to 21, and the industry concentration will further decrease. While overcapacity will increase, the impact of fluctuations in individual units on market trends will also weaken.

Demand side: ABS remains the main downstream demand growth point

The downstream consumption of acrylonitrile is relatively extensive, mainly concentrated in the three major fields of ABS, acrylic fiber, and acrylamide, as well as a small amount applied in industries such as nitrile latex, nitrile rubber, polymer polyols, and carbon fiber.

Among the three major downstream demand areas, there is already a risk of overcapacity in the acrylamide and acrylic fiber industries. According to information statistics, there are no plans for new production capacity in the acrylamide and acrylic fiber industries by 2025. The ABS industry remains the main demand growth point, with a fast pace of capacity expansion. In 2025, various related enterprises announced a total of approximately 4.5 million tons/year of new production capacity.

The main consumption area of ABS is in the electrical appliance manufacturing industry, accounting for more than 70% of China’s total ABS consumption in 2024, with household appliances accounting for the largest proportion, accounting for more than 45% of the total consumption. In the field of household appliances, the enterprises with the largest consumption of ABS include Gree Electric, Midea Electric, Qingdao Haier, Sichuan Changhong, Meiling Electric, Qingdao Hisense, etc.

From the analysis of the output of the home appliance market in the past 10 years, the era of rapid growth in white goods production has passed, and home appliances belong to durable goods. In recent years and in the future, with the downturn of the real estate market and the sluggish demand for end products, the boost effect of the white goods market on the emerging demand for ABS is limited. Its overall consumption growth rate is still slow, and the industry’s operating rate has gradually decreased from over 90% to 60-70% this year. Therefore, its production growth is far behind the capacity growth rate. And ABS has a relatively low unit consumption of acrylonitrile (22%~25%).

Import and export: Acrylonitrile exports may still face resistance by 2025

With the gradual emergence of overcapacity in domestic acrylonitrile production, exports have become an important component of acrylonitrile demand. Since 2021, China has transformed from a net importer of acrylonitrile to a net exporter. Although the export volume in 2023 has slightly decreased compared to 2022 due to shrinking overseas demand, and domestic acrylonitrile plants are operating at low profits with low willingness to start production, there has been a tight balance of supply in certain periods of time, resulting in some low-priced imported goods to cover the gap and an increase in import volume. But in 2024, the export volume will basically maintain around 20000 tons or more per month, far exceeding the import volume. However, given that the global economy has entered a “low growth normal”, the expected global economic growth in 2025 is still slow, and acrylonitrile exports may still face certain obstacles.

Overall, based on the current downstream demand growth, it is difficult to fully digest the concentrated release of acrylonitrile production capacity. The expected pattern of oversupply in the domestic acrylonitrile industry is difficult to improve, and it is expected that the industry’s profits will continue to be in a low period. The production cost of products will become a key competitive factor for acrylonitrile enterprises.

Market forecast: An acrylonitrile analyst from Shengyi Society believes that the cost of acrylonitrile is expected to decrease in 2025, and the demand increment is still slightly insufficient under the trend of supply and demand growth. The industry’s oversupply pattern will intensify; In addition, the global economy has entered a “low growth normal”, and acrylonitrile exports may still face certain obstacles. Overall, the industry competition is becoming increasingly fierce, the operating rate is further declining, and the price center may slightly decrease compared to 2024.

The domestic ABS market remained relatively strong in December, with spot prices of various grades increasing. According to the Commodity Market Analysis System of Shengyi Society, as of December 31st, the average price of ABS sample products was 11837.50 yuan/ton, with a price level increase or decrease of+3.05% compared to the beginning of the month.

Fundamental analysis

Supply level: In December, the operating rate of the domestic ABS industry remained stable with small fluctuations, and the industry load level increased narrowly by about 3% to 72% compared to the beginning of the month. In the early stage, Hengli Petrochemical’s AS plant was converted to ABS, and the Tianjin Dagu blowing task ended, gradually returning to production capacity. The average weekly production within the month is around 120000 tons, and there is limited change in the inventory of aggregation enterprises, with a position level of 160000 tons. The overall pattern of abundant supply of goods remains unchanged. Overall, the supply side provided average support for ABS spot prices in December.

Cost factor: Since December, the upstream three materials of ABS have shown two increases and one decrease, with overall support for ABS costs being average. In the first half of the month, the domestic acrylonitrile market remained at a high level with an increase, while major factories in East China maintained low load operations, resulting in low inventory levels and tight supply in the industry. The operating rate has increased in the latter half of the year, leading to an increase in supply. Some production enterprises have continuously lowered their factory prices, resulting in a slight decline in overall market prices. The market has experienced a slight decline.

The available supply of butadiene in the spot market is generally tight and continues to rise during the month. The holder of the goods has a strong mentality of supporting the price. At the same time, the inventory of ports in East China is relatively low, and the downstream synthetic rubber futures market is strengthening, driving a stronger market atmosphere. But as prices continue to rise, downstream receiving capacity gradually declines, and buying sentiment in the market begins to weaken, the market’s upward momentum weakens, and the market may return to balance.

In December, the styrene market fluctuated and fell. The performance of upstream crude oil in the far end is still acceptable, with the main focus on consolidating the price of pure benzene as the direct raw material. However, the cost side of styrene has largely exhausted its support for spot prices in the early stage. The operating rate of domestic industries is gradually recovering, and the tight supply situation is lifted. With the restart of facilities, the supply is further relaxed. At present, there is a lack of boosting factors in the market, leading to a consolidation of the market.

On the demand side: Downstream purchasing power remained strong in December, while on the terminal side, due to the continued stimulation of the national subsidy policy for household appliances, some terminal products sold in large quantities, leading to the digestion of enterprise inventory. Due to the concerns of home appliance exporters about the remote market, some export demand has been pushed forward, the overall load position of factories has rebounded, terminal stocking willingness has strengthened, and procurement operations have increased synchronously. Merchants attempted to increase their offers, but the activity of supply circulation remained high. Overall, the demand side can still provide support to the market.

Future forecast

In December, the domestic ABS market showed a strong consolidation trend. The performance of the upstream three materials is average, and the comprehensive support for ABS cost side is flat. The load of ABS polymerization plant has slightly rebounded, and finished product inventory continues to be digested. On the demand side, the demand is relatively strong, and the market continues to be guided by consumption and remains stable with some strength. However, the increase in demand for household appliances may overdraw future consumption, and with holidays approaching and limited demand on the market, businesses have concerns about the post holiday market. Business analysts believe that the ABS market may return to a narrow range consolidation trend.

1、 Price trend

According to the monitoring of the bulk ranking data from Shengyi Society, the overall price of bromine remained weak in December. At the beginning of the month, the average market price of bromine was 22400 yuan/ton, and at the end of the month, the average market price of bromine was 21900 yuan/ton, a decrease of 2.23% and a year-on-year decrease of 11.69%. On December 30th, the Business Society Bromine Index was 76.84, unchanged from yesterday, a decrease of 68.66% from the highest point of 245.18 points (2021-10-27) during the cycle, and an increase of 30.41% from the lowest point of 58.92 points on October 29th, 2014. (Note: The cycle refers to the period from September 1, 2011 to present)

2、 Market analysis

The overall price of bromine has been weak this month. The mainstream market price in Shandong region is currently around 21000-22000 yuan/ton. Manufacturers are conducting centralized maintenance, and most downstream manufacturers have also stopped production. Downstream demand is weak. In terms of exports, the import volume of bromine in China in November 2024 was 7939 tons, an increase of 29.13% compared to the previous month. The average import price was $2435/ton, an increase of 1.37% compared to the previous month.

Regarding sulfur: The overall price of sulfur rose in December. At the beginning of the month, the average market price was 1654.33 yuan/ton, and at the end of the month, the average market price was 1691 yuan/ton, with a price increase of 2.22% and a year-on-year increase of 58.53%. The transaction atmosphere in the sulfur market is still acceptable, and the demand for this month is also acceptable.

Business analysts believe that the price of bromine has been consolidating recently. Manufacturers are conducting centralized maintenance, and most downstream manufacturers have also stopped production. Downstream demand is weak. The comprehensive prediction of short-term bromine prices or consolidation of the market situation based on the supply-demand game depends on downstream market demand.