In 2018, the butanone market has experienced several shocks. Prices plunged sharply from 1,2350 yuan at the beginning of the year (ton price, the same below) to 6,400 yuan at the end of the year, after a few minor shocks.
Zhang Hao, Butanone Analyst of Fushun Petrochemical Company: Mid-year Shock in the Lower Chop Zone
Looking back on the trend of butanone market in the past year, in the first half of the year, the market started from a high of 12,350 yuan and continued to decline to about 6,100 yuan in the middle of the year. Thereafter, prices fluctuated between 7000 and 9000 yuan. From the overall trend, the trend of butanone market last year can be roughly divided into six oscillation intervals.
In January, the first wave band dropped by 3,000 yuan, or 24.3%. At the beginning of the year, the European butanone market was short of supply due to sudden factors. The price difference between internal and external market drives a large outflow of domestic goods, which leads to a difficult demand for goods in the domestic market, and the price soars, starting with the highest price of 12350 yuan in the whole year. Since then, with the recession of sudden factors, the butanone market began to fall sharply, and by the end of the month, the market average price fell back to about 9350 yuan.
The second band oscillates from early February to late April at 7700-9900 yuan. During the period, the average market price rose from 9450 yuan to 9,900 yuan, a stage high in mid-March, and then fell back to 7,700 yuan by the end of April.
From the beginning of May to the end of June, the third band oscillates between 6100 yuan and 8050 yuan. At this stage, the market price of butanone rose from about 7700 yuan to 8050 yuan in mid-May, and then dropped to 6,100 yuan at the end of June, reaching the lowest level in the year.
The fourth wave band is July, which oscillates between 6100 yuan and 6850 yuan. During this period, the market price of butanone began to rise from 6,100 yuan to reach a stage high of 6,850 yuan on July 18, and then slightly dropped to 6,700 yuan at the end of July.
The fifth wave band is August, oscillating between 6700 and 7500 yuan. In this range, the market price started from 6,700 yuan to 7,500 yuan on August 12, and then fell back to 7,300 yuan at the end of the month.
The sixth band fluctuates from 7300 to 9300 yuan from the beginning of September to the end of the year. During this period, the price began to rise after half a month at the position of 7,300 yuan, reached a stage high of 9,300 yuan on October 12, and then began to go down all the way. In early November, it was sorted out for a few days near 7,800 yuan, and then continued to go down, closing at 6,400 yuan at the end of the year.
Sun Chao, Zhuo Chuang Information Analyst: Continuing the Weak and High Position Is Hard to Return
Generally speaking, the short-term butanone market weakness continues, and prices are still likely to fall.
In terms of domestic supply, the spot quantity is relatively sufficient. The overall market demand is weak, and most of the downstream is based on digestive inventory. From a macro point of view, although the growth rate of industry capacity has slowed down, the contradiction of excess capacity is still prominent under the situation that downstream demand continues to weaken. This year, environmental protection supervision has been steadily strengthened. In the absence of special advantages and other emerging downstream situations, downstream industries such as coatings, adhesives, cleaning agents and other industries have maintained a tepid demand. In addition, enterprises are facing financial and payment pressures, downstream start-up rate is difficult to increase significantly.
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From the cost point of view, international oil prices have fallen sharply. Although OPEC cut-off agreement was once regarded as a life-saving straw by the industry, at present, this advantage is not enough to offset the double negative effects of high crude oil production and weak demand expectations in the United States. In addition, the crude oil market has recently been under pressure from financial markets, and there is no hope of reversal in the short term.
Therefore, the butanone market in the context of overcapacity, cost support is weak, the scenery on the line of 10,000 yuan is difficult to reproduce.
Pacific Chemical Analyst Yang Zhuo: Overcapacity and Demand Are Not Strong
The substantial reasons for several shocks in the butanone market in the past year were analyzed. Overcapacity and low downstream demand were the first to be implemented.
On the surface, tight supply, maintenance and cost factors in the international market lead to fluctuations and shocks in the butanone market throughout the year, but in the final analysis, the factor lies in the overcapacity of the industry, while downstream demand has no substantial advantage.
At present, the annual production capacity of butanone in China is 715,000 tons, while the output is only 461,000 tons. The average start-up rate is only 64.5%. The utilization rate of production capacity is not high and it is obviously in a surplus state. The gap between the two has been solved by export. Therefore, when the relationship between supply and demand is slightly turbulent, market prices will fluctuate. In the first quarter of last year, unexpected events in the European market led to tight supply. China’s butanone export volume was nearly 51,000 tons, about six times that of the same period last year, thus concealing the fundamental contradiction of excess capacity in China’s market and pushing prices out of the year-round high. With the rework of foreign installations, the increase of supply, and the escalation of Sino-US trade friction, the export path becomes narrower and narrower, and the contradiction of excess capacity in the industry becomes more and more prominent.
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On the downstream demand side, affected by environmental supervision, downstream paint, adhesives, slurries and other industries started to decline to about 50%, domestic demand weakened and continued to depress the market. By the end of the second quarter, when the weather turned hot, the demand for raw butanone in downstream industries was further reduced, resulting in poor market delivery, rapid increase in inventory, and the price was cut to the line of 6000 yuan. After mid-September, with the collective overhaul of butanone production units, the market welcomed good, factories were reluctant to sell and soared, the market price soared to 9300 yuan all the way. The situation reversed again in November. At that time, the international oil price fell sharply, the price of carbon tetrachloride plunged after the raw material ether, the enthusiasm of enterprises to start construction rose, and the supply increased, which led to the market weakening again at the end of the year. At the same time, affected by the boom in the butanone market in 2017, some downstream users have been looking for alternatives to butanone for cost reasons. For example, the paint industry uses acetone and MIBK mixed solution instead of butanone, and some paint companies completely eliminate butanone in the formulation of wood paint; the ink printing industry uses butyl acetate instead of butanone; the adhesive industry uses dimethyl ester and butanone to reduce the amount of butanone; individual industries use butyl ether instead of butanone to dissolve some resins.
Therefore, the contradiction of excess capacity caused by low demand is more obvious, which drags down the turbulence of butanone market. Although the centralized overhaul of installations has caused a small rise, it is difficult to change the basic trend of the market in the end.
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