According to the monitoring of the business community, in October, the domestic adipic acid market went out of the trend of surging and falling. After the festival, affected by the rising market of suppliers and tight supply, adipic acid rose sharply, with a weekly increase of more than 12% (see the weekly K-bar chart). After the middle of the month, due to the lack of good support on the demand side, the price fell back, erasing some of the previous gains. At the end of the month, the market price range of adipic acid was 10400-10600 yuan/ton. Adipic acid rose 5.93% in the whole month.
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Supply side
In terms of market supply, in the first ten days of the year, suppliers were generally in the market, and the operating rate of enterprises was generally low, maintained at 50%, a slight drop compared with that before the festival. The pressure on manufacturers’ inventory eased, supporting prices to rise. Since the middle of the year, the increase in the operating rate of enterprises has brought more supply. Supply is excessive from tight to loose.
Cost side
On the cost side, it can be seen from the figure above that adipic acid is highly related to the trend of upstream pure benzene. Pure benzene has gone out of the market that rose first and then fell. During the 11th National Day, international crude oil prices rose sharply, boosting downstream chemicals. The price of pure benzene also rose driven by crude oil. The supply of pure benzene in East China is tight, and spot prices are generally higher. In the middle and late ten days, the price of pure benzene fell, which had a significant impact on adipic acid. According to the monitoring of the business community, pure benzene fell by 10% from October 11 to the end of the month.
Demand side
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The downstream demand of adipic acid has not changed much, and the demand remains rigid. According to the monitoring of the business community, the downstream PA66 rose by 2.02% in October, with a significantly slower pace of growth (up to 11.2% in September). The downstream demand did not bring much benefit to adipic acid. The lack of demand increment and the lack of cooperation from the downstream purchasing end foreshadowed the high level of adipic acid. According to the monitoring of the business community, the market price of PA66 in Zhejiang was 25250 yuan/ton at the end of October.
Industrial chain
The above figure shows that adipic acid is stronger than the upstream and downstream. The main raw material, pure benzene, has dropped significantly, easing the pressure on the cost side of adipic acid, and the manufacturer’s profits have been improved, but at the same time, some downstream profits have been squeezed.
Future outlook
The business agency believes that at the end of the month, there is a strong wait-and-see atmosphere in the market, and the settlement of the big factory is imminent. In addition, the decline of pure benzene has entered a certain platform period, and the power of decline is not strong in the later period, mainly due to the positive impact of the supply side. At present, there is too much equipment maintenance, and it is difficult to resume and improve the load of many devices in the later period. But it is difficult to improve the demand too much. To sum up, adipic acid may maintain a weak shock, and the game between supply and demand will lead to a stalemate in the market.
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