Maleic anhydride: Farewell to huge profits due to falling prices

　　Since the beginning of this year, the market price of maleic anhydride has fluctuated all the way down.
Under the intensified imbalance of supply and demand, the report card for the first half of the year was finally handed over with a decline of 14.
52%
.
In the context of falling prices, the former halo of "high profit" has faded, and the profit per ton of products has fallen from 10,000 yuan to the edge of loss
.

　　Liaoning maleic anhydride distributor Lutong: weak demand fell by 14.
52%

　　In the first half of the year, the average domestic maleic anhydride market price started at 12,200 yuan (ton price, the same below), and after several shocks, it finally ended at 10,400 yuan
.
Among them, the high point appeared on February 17, which was 14,200 yuan; the low point appeared on May 11th, which was 10,200 yuan
.

　　Looking back at the trend of the maleic anhydride market in the first half of the year, it can be roughly divided into three stages
.

　　The first phase runs from the beginning of the year to mid-February
.
The maleic anhydride market slowly declined, and the price dropped from 12,000 yuan to about 11,400 yuan online
.
On January 12, the price of maleic anhydride once fell to a stage low of 10,800 yuan, and then slowly recovered
.

　　The second stage is from early February to early May
.
In the past 3 months, the maleic anhydride market has shown several sharp fluctuations, with a stage drop of 15.
75%
.
On February 9, the price of maleic anhydride started to fluctuate upwards from 12,100 yuan, until February 17, when it reached a high of 14,200 yuan in the first half of the year
.
After hovering at this price for 3 days, it turned down, and then fell to the lowest point in the first half of the year at 10,200 yuan on May 11 after four major shocks
.
During this period, the maximum amplitude of the average market price of maleic anhydride reached 39.
34%
.

　　The third phase runs from mid-May to June 30
.
The price of maleic anhydride slowly rebounded from 10,200 yuan online, and finally ended at 10,400 yuan
.
During this period, the price of maleic anhydride fluctuated slightly on the 10,000-yuan line, with an overall slight increase of about 2.
3%
.

　　Overall, the main factor that led to the downturn in the maleic anhydride market was weak demand
.
In the first half of the year, the performance of the unsaturated resin market in the downstream of maleic anhydride was far below expectations, and the production enterprises were in a state of accumulation intermittently, which led to the gradual increase in the contradiction between supply and demand in the maleic anhydride market and the decline in prices
.

　　Zhuochuang Information analyst Li Tong: From making a profit of nearly 10,000 yuan to facing a loss

　　In 2021, the maleic anhydride industry will usher in a bright moment, with product prices and industry profitability hitting record highs
.
However, since 2022, the boom of the maleic anhydride industry has taken a sharp turn for the worse, and rising costs and falling product prices have led to a substantial shrinkage in corporate profits
.
High-cost benzene maleic anhydride enterprises were the first to fall into losses, and the losses continued to expand
.
Subsequently, relatively low-cost n-butane-based maleic anhydride enterprises were also nearing a loss in early May
.

　　This is related to the quietly changing relationship between supply and demand in the maleic anhydride market
.
From the perspective of supply, from December 2021 to May 2022, Guangdong Huizhou Yuxin New Materials 150,000 tons/year and Shandong Qixiang Tengda 100,000 tons/year units have been put into operation successively, and have achieved high-load operation in a short period of time.
Coupled with the delay in the maintenance plan of some production units, the output of maleic anhydride increased rapidly
.

　　The demand side growth is not optimistic
.
Although the production capacity of unsaturated resins has continued to increase, the prosperity of the terminal real estate market has fallen sharply, and the demand for artificial stone, home coatings and other products has cooled, and the main producing areas of unsaturated resins such as East China have been hit by emergencies since March, and the industry has started construction.
The rate was suppressed, resulting in a decline in the demand for raw material maleic anhydride
.

　　Supply growth was met with a decline in demand, resulting in a drop in the market price of maleic anhydride
.
In addition, the rising cost further eroded the profit margin of the maleic anhydride industry, and gradually moved towards the edge of loss
.

　　Jinlianchuang Chemical Analyst Yang Guangzhi: Profits may remain low

　　In 2022, the new production capacity of maleic anhydride will gradually enter a concentrated release period, while the new downstream production capacity will be released slowly, and the traditional downstream will be affected by the downturn in the real estate industry and the demand will be weak
.
Judging from market expectations in the second half of the year, the profits of butane-based maleic anhydride companies will be at a low level, while benzene-based maleic anhydride companies will hardly be profitable in the long run
.

　　In terms of supply, the second-phase production line of Qixiang Tengda’s 200,000-ton/year maleic anhydride project has been completed recently, and qualified products have been produced
.
After the second phase of the project is put into operation, the company's maleic anhydride production capacity will exceed 400,000 tons per year
.
At the same time, other small and medium-sized production capacity is also expected to increase investment, and the pressure of excess supply of maleic anhydride is still relatively large
.

　　In terms of demand, affected by the repeated epidemics and the low prosperity of the traditional downstream real estate industry, the demand recovery in the second half of the year is not expected to be strong, and the golden peak season is also difficult to match the same period last year
.
After the end of the traditional low demand season from May to August, it is expected that maleic anhydride will have a strong market in September to November, but it is difficult to reach the mid-to-high price in the same period last year
.
The production capacity of the emerging downstream maleic anhydride to 1,4-butanediol and succinic acid projects was released slowly, and it was difficult to drive the demand for maleic anhydride to increase significantly during the year
.

　　In the case of high raw material expectations, the comprehensive profit of maleic anhydride enterprises will shrink significantly compared with last year
.
For n-butane maleic anhydride enterprises, due to the relatively low price of raw materials and insignificant production pressure, it is expected that their profits will fluctuate in the range of 500-1500 yuan
.
For benzene maleic anhydride enterprises, in the context of high crude oil, it is difficult for the price of pure benzene to fall, and it is expected that the production enterprises will still suffer losses for a long time
.

　　The main focus of the subsequent maleic anhydride market is still the domestic epidemic situation, the terminal real estate industry and changes in macro policies
.