Prices soaring! Trade war + environmental supervision + shutdown relocation multiple factors superimposed

April 16, 2018
Recently Trade war of China & U.S. is clouded, and chemicals become the first brand by both parties. In April, the environmental protection tax was formally established, the storm of environmental protection supervision became increasingly fierce, and the deadline for the closure of hazardous chemicals companies was approaching, all above factors make chemical industry prices involve a wave of new rising tide!
Pricing of MMA – up!
MMA is an organic compound and an important chemical raw material. It is monomer of production transparent plastic polymethyl methacrylate (PMMA), mainly used for manufacturing organic glass, coatings, additives, resins, etc. Due to the policy of restricting the import of foreign waste, the overall supply chain of recovering cracked materials via recycling of foreign wastes tends to collapse, leading to raw materials become difficult to obtain, and increasingly tight supply of the market for cracked materials.
Due to the high market price of cracked materials and the continuous shortage of supply, more and more downstream producers of cracked materials purchased on the subjective level began to increase the purchase of methyl methacrylate. The MMA market becomes so hot.
Recently the domestic market prices of methyl methacrylate continue to climb up the trend of active operation, under the background of abnormally tight overall supply level, the domestic major production companies have reportedly reluctant sellers, the recent domestic mainstream prices of methyl methacrylate high transaction prices reaching to RMB 25,300-25,500/t, high-end transaction prices in some regions have been consolidated to RMB 26,000/t, the mainstream market in East China has been negotiated at RMB 24,500-25,000/ton, and the market in South China has been negotiating between RMB 25,000 and RMB 25,500/ton, and the market price has been renewed. A new record high.
Due to the shutdown of domestic methyl methacrylate production enterprises and downstream terminal sales entering the peak season from April to May, it is expected that the overall market supply of methyl methacrylate will be tense, and the overall supply may be insufficient.
Prices of Additives – up!

Market feedback, due to the recent surge in methyl methacrylate, in the field of related additives, the high market price of methyl methacrylate products digested very quickly. An agent dealer said that the recent brightening agent 701, benzoin, matting agents have varying degrees of increasing, including brightness enhancer rose RMB2500 / ton, the current offer in the RMB24400 – RMB25000 / ton. Extinction agent rose RMB3,000 / ton, because the amount of business is not large, the unit is calculated in kg, total rose RMB3 / kg, at present, indoor physical matting agent quoted at RMB42,000 / ton, outdoor physical matting agent to sell RMB55,000 / ton or so, even if these auxiliaries rose, they still did not reduce the enthusiasm for market demand. With the increase of MMA, various auxiliaries prices rebounded.

Prices of Epoxy resin up!
Downstream applications of methyl methacrylate, such as environment-friendly coating resins, have also shown different degrees of increasing. Till April 11, most companies in Huangshan district raised RMB200-700/ton. As till April 11, the price of liquid epoxy resin in east China was RMB19,300-20000/ton, and that of solid epoxy resin was RMB16,500-17,000/ton. A negative trend in the first quarter, the trend of bottoming out in recent days.
Price of Nylon 66 – up!
Due to rising raw material costs and tight supply, BASF began to increase PA66 around US$300/ton (equivalent to RMB1880/ton) on April 15. It is reported that due to improvement in supply and demand in the industry, the domestic PA66 market has increased its price by 14% since February of this year, and the cumulative increase since 2017 has reached 43%.
PA66 is mainly used in the field of chemical fiber and engineering plastics. It is synthesized from hexamethylenediamine and adipic acid to prepare nylon 66 salt. The raw material hexanediamine is obtained by hydrogenation of adiponitrile. Due to the production process of adiponitrile, a core raw material, controlled by international giants such as INVISTA, Solvay, and Oxide, domestic companies did not substantially expand PA66 production capacity. In terms of domestic companies, only Shenma (600810), Huafeng, and Guorui have polymerization capabilities, with a total capacity of 325,000 tons, of which Shenma (600810) and Guorui have adiponitrile hydrogenation to produce hexamethylenediamine, and Huafeng requires the purchase of hexamethylene diamine.

Price of Dye – up!
Huntsman Company issued a notice that due to the increase in production costs, only part of the increased costs could be allocated to customers, otherwise production would not continue. Simply increase the price! The new price policy after the price increase took effect on April 8, 2018.
Giants for April price increases include, but are not limited to, BASF, Clariant, Eastman, Kansai Coatings, AkzoNobel, Nippon, Axalta, Arkema, and Lyondell Basel. . .
With a variety of factors superimposed, do chemical product prices really have to go through the “Golden in March Silver in April”? Those who have not risen, those who want to rise, and those that have already risen are all affecting the fragile heart of the chemical industry. Kindly remind everyone to pay attention to upstream and downstream information and actively respond to price changes!


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