"Crazy" price hike!

Recently, driven by the increase in crude oil prices, force majeure of styrene plants in Europe and the United States due to extreme cold weather and multiple factors such as centralized maintenance of the plants, many major manufacturers have issued price increase letters

Wanhua products rose up to 15,000 yuan/ton

Driven by the increase in crude oil prices, the styrene plants in Europe and the United States due to extreme cold weather and other force majeure, and the centralized overhaul of the plants, the supply of most chemical raw materials such as styrene, MMA, BA, EHA, HDI, and BDO has been significantly reduced.

Acrylic emulsion, the price will increase by 1,000-1,500 yuan/ton;

The price of hydroxypropyl dispersion is increased by RMB 1500-2500/ton;

The price of water-based curing agent is increased by RMB 10,000-15,000/ton;

Water-based PU resin, the price will increase by 1,000-1,500 yuan/ton;

The price increase will take effect today!

Raw materials are in short supply, skyrocketing, and the whole line is red

The shortage of raw materials has spread to all walks of life

According to market monitoring, since February 1st, a total of 71 products on the bulk list have risen, of which 18 products have risen by more than 20%! The top three gains were: 1,4-butanediol (84.

BASF, Dow and other major manufacturers have successively increased prices

There was a delay in delivery before, and there was a price increase afterwards

The price increase in the chemical market completely exceeded market expectations!

BASF, Dow, DSM and other major manufacturers have taken the lead in continuously increasing prices!

BASF: All its chemical products have been adjusted up! The highest increase is 3086 yuan/ton!

The global chemical industry big brother BASF has opened the door to the full range of price increases for its chemical products due to various reasons such as production damage and logistics obstruction!

MDI

Starting from February 15, 2021 or the time allowed by the contract, BASF will increase the price of Lupranate polymerized MDI products and polymerized MDI mixtures by US$0.

TDI, polyol

Effective from February 15, 2021, or where the contract permits, BASF will increase the price of all Lupranate® TDI products by 0.

Biodegradable compound ecovio®

On February 16, BASF announced an increase in the European price of its certified biodegradable compound ecovio®:

ecovio®F: +350 Euro/ton (equivalent to RMB 2,725/ton, the same below)

ecovio®M: +350 Euro/ton

ecovio®T:: + 350 Euro/ton

Dow: The impact of device shutdown may exceed expectations!

Some of Dow Chemical’s production facilities in the Gulf Coast region of the United States have been shut down, but the company did not specify

It was announced on February 18 that the production of various intermediate chemicals in Deer Park, Freeport, Texas City and Bayport, Texas, Harnville, Louisiana, and Louisville, Kentucky, had encountered force majeure

Starting from February 15, 2021 or the time allowed by the contract, the Dow Chemical Company will increase the prices of the following MDI products in all grades and packaging types in North America on behalf of itself and its applicable consolidated subsidiaries.

Starting from February 15, 2021 or the time allowed by the contract, the Dow Chemical Company, on behalf of itself and its applicable consolidated subsidiaries, will increase the following polyol products in all grades and packaging types in North America.

DSM: 15% increase

On February 15, Royal DSM announced that the global prices of its Dyneema® and Trosar™ù HMWPE products would be increased by an average of 15%, effective from March 1, 2021

Selani: increase by 1,000 yuan/ton

On February 1, Celanese announced an increase in the price of LCP liquid crystal polymers in Asia by US$1/kg, effective from March 1, 2021

Multi-factor superposition

Many research institutions believe that the rise in crude oil prices has become the main reason for the rise in prices of chemical products, and the two show a positive correlation

"Overall, it is caused by multiple factors

The first factor is that rising oil prices drive up downstream products

The second factor is market supply and demand
.
The supply-demand relationship of many price-increasing products is in a relatively balanced state.
Because the production capacity is not very sufficient, the balance of supply and demand is relatively fragile, and it is more susceptible to price fluctuations affected by downstream demand
.
And downstream demand is indeed improving
.
Zhu Fang said that, driven by the massive export of downstream terminal products, the prices of many raw materials and additives have risen
.

The third factor is that the operating profit margin of bulk products has been declining in recent years, and many investors have withdrawn.
When downstream demand rises, raw material prices are also pulled up
.

An expert from Sinochem Group said that although this round of chemical price increases is related to oil prices, it is more related to the epidemic
.
The overseas epidemic has repeatedly caused some overseas chemical plants to stop production, and this part of the production capacity has been transferred to China
.
The increase in demand for overseas orders for domestic chemical products has driven the demand for chemical raw materials, and the prices of many chemical products have risen significantly
.

The new business cycle is too early

Whether the rising trend of chemical products indicates that a new industry boom cycle is coming, this view has not been recognized by industry insiders
.

An expert from Sinopec said that the price increase of chemical products from before the holiday was caused by a combination of factors, such as rising oil prices, loose domestic policies, demand recovery, positive development of internal circulation, and seasonal factors have all played a role in promoting the increase.

.

Experts believe that the last round of the petrochemical industry's boom cycle was 2016-2019.
According to the normal cycle, it will generally return to the boom cycle in 3 to 4 years.
Therefore, it is too early to say that the petrochemical industry has entered a new boom cycle
.
The short-term behavior of chemical product price hikes can continue to be determined by the recovery of domestic and foreign demand
.

Zhu Fang believes that despite the improvement in prices, domestic bulk products are still in a state of surplus
.
"There have been two consecutive PPIs of industrial products lower than CPI of consumer products.
The first cycle had 54 months of negative growth, and the second cycle (until December last year) was 26 months of positive growth.
However, the PPI was still lower than CPI.
It has not been able to reverse it, which means that there are still difficulties in transferring raw materials to the terminal
.
"

Zhu Fang judged that chemical prices should go well in the short term, but they are definitely in excess in the long term
.
From the perspective of the business cycle, Zhu Fang said that under the high-quality development measures of reducing production capacity and adjusting the structure for many years, the industry will no longer have a business cycle as obvious as in the past, but there will be price rotations
.
This wave of price increases cannot be regarded as a long-term behavior, but the chemical industry is indeed gradually improving.
Although all industries are difficult in 2020, the operating profit margin of the chemical industry is higher than that in 2019
.
In addition, the CPI has shown a downward trend, and industrial products are showing signs of improvement
.
For the future, Zhu Fang believes that the problem of excess is to be solved
.
The "dual cycle" proposed by the central government is very meaningful.
There will be growth points in stimulating domestic demand for chemicals in the future.
This method will solve the problem of surplus
.