Nearly 40 kinds of chemical products fell by more than 10% in January, and chemical products went downhill

It is understood that the "dual control" policy that began at the end of August has led to a short-term frenzy of commodities mainly represented by coal, and the market price has been soaring from the end of August to mid-October
.
Since the end of September, the state has successively introduced various policies and measures to stabilize market prices, which have achieved initial results in early October, but coal prices have been rising all the way
.

The continuous rise in coal prices has led to the continued rise in commodities and chemicals that use coal as raw materials, such as calcium carbide, PVC, acetylene, coal coking, and phosphorus chemical-related products
.
Around mid-October, the state released a "big move", implemented a rare price method, and capped coal prices within one year, causing coal prices to reverse downwards from mid-October
.

Figure 1 The recent price trend of thermal coal (unit: yuan/ton)

As can be seen from the figure, the price of thermal coal has fallen below 1,000 yuan/ton in just half a month from a historical high of 2,500 yuan/ton
.
The price of coal has been well controlled, and it has also brought about a decline in related products to a large extent.
The prices of calcium carbide, coke and PVC have dropped sharply one after another
.

Figure 2 China's calcium carbide price chart (unit: yuan / ton)

Figure 3 China's PVC price chart (unit: yuan / ton)

The timing of the state's intervention in coal prices is already on the verge of losing control of coal prices.
If coal prices cannot be effectively controlled, a series of chain reactions will occur, such as rising heating costs in the north and coal as fuel and raw materials.
The industrial production will bring huge cost increase
.
Behind the increase in cost will be the increase in the cost of all walks of life that rely on cost for production, so that the cost will eventually be passed on to the end consumer, which will seriously bring about huge consequences for people's livelihood, stability and unity
.

Therefore, the coal price ends with the national price cap, which fully reflects the depth and execution of the state's control over bulk commodity prices
.
However, in China's commodity trading market, the trading system of most commodities is based on the self-balancing supply and demand mechanism of the market
.
That is to say, the market will avoid the sharp rise and fall of commodity prices by self-correcting the imbalance between supply and demand
.

If there is an external force in the originally balanced market transaction state, it will inevitably lead to violent fluctuations on one side
.
This round of coal prices brought about by the state's regulation may prove this theory
.

According to the data, in the past 1 month, among the more than 450 bulk chemicals counted by Pingtou Ge, more than 170 of them fell, and nearly 40 of the bulk chemicals fell by more than 10%, and 14 of them fell.
down more than 20%
.
Among them, the monthly price of thermal coal fell by more than 44%, and the market prices of related products using coal as direct raw materials, such as blue carbon and coke, fell by more than 39%
.

In addition, products using coal as secondary energy or raw materials, such as calcium carbide, PVC, etc.
, fell by more than 20% on a monthly basis
.
Secondary downstream products fueled by coal, such as inorganic chemicals and related products of phosphorus chemicals, have fallen by more than 20% in the past month
.
In addition to excluding commodities whose prices have fallen due to market supply and demand factors, the products that have fallen due to the main and secondary effects of coal are expected to account for 20%-30% of the falling varieties
.

Table 1 Statistics on the rise and fall of bulk chemicals that have fallen in the past month (October 8 to November 8, 2021)

The cost of chemical production is passed from the raw material end to the downstream terminal market according to the latitude of the industrial chain, and will eventually be passed on to consumers
.
Whether it is petrochemical produced with crude oil as chemical production, or basic chemical produced with coal as chemical production, it will be conducted downwards according to the mode of the industrial chain
.
Therefore, the development of the global chemical industry in the past few hundred years has revolved around the development logic of energy distribution.
Whoever controls the raw materials will control the chemical industry
.

However, according to the length of the industrial chain, when the raw materials are transmitted downward in the latitude of the industrial chain, the inventory cycle of downstream products will be referred to
.
That is to say, the cost transmission will have a serious lag due to the inventory time, which is especially obvious in the chemical industry chain
.
If the downstream product industry has a large inventory capacity, in the environment of falling raw material prices, the price fluctuation of downstream products will lag behind the fluctuation of raw material prices
.
In the environment of rising raw material prices, the price of downstream products will also significantly lag the fluctuation of raw material prices
.

Therefore, this round of short-term slump in coal prices brought about by the state's actions will lead to a slump in the price of downstream chemicals with coal as the largest production cost in a short period of time.
Secondary costs, or the price of chemicals with a certain weight in coal costs, will go down
.

If coal falls to the 440 yuan/ton required for price control in the short term, there is still nearly 50% room for decline
.
Therefore, Brother Pingtou predicts that the short-term plunge in coal prices will lead to a decline in the prices of some chemical products in the short term in the future.
If the consumer market continues to have negative feedback, there is a danger of "stopping the car"
.
However, it is also necessary to comprehensively consider the current situation of supply and demand of downstream products.
If the demand for downstream products is good, it does not rule out the situation of stabilizing high prices and locking in high production profits
.

Crude oil is currently the most influential product of global fossil energy, and under the premise of the transformation of the global energy structure, the market attention of crude oil is gradually weakening
.
Moreover, as China is a country with abundant coal reserves, coal price fluctuations have a greater impact on the production of Chinese chemical companies, and ChemChina, as the world's largest production nature, will inevitably have a certain impact on the global energy structure.
It is only a matter of time.
question of speed
.