On August 29th, the Engineering Plastics Index was 685 points, a decrease of 2 points from yesterday, a decrease of 39.96% from the highest point of 1141 points in the cycle (2018-09-09), and an increase of 21.02% from the lowest point of 566 points on May 6th, 2020. (Note: The cycle refers to the period from December 1st, 2011 to the present)

 

PVA 1788 (PVA BP17)

In August, the overall price trend of domestic engineering plastics products improved. According to the price monitoring of the Business Society, there were a total of 4 products that rose and 1 product that fell on the engineering plastic price list in August 2023. The main commodities that rose include POM (+11.67%), PC (+9.07%), PA66 (+1.28%), and PA6 (+0.36%); The falling commodities include PET (-0.82%).

 

In August, there was more active guidance on the fundamentals of various products in the engineering plastic industry, which provided solid support for the price trend. POM and PC were the first to bear the brunt, leading the industry up due to supply tightening and policy benefits, respectively. Secondly, nylon products PA6 and PA66 were also supported by the cost side and saw steady growth, followed by growth. Only PET has experienced a narrow decline in market gaming. From a macro perspective, global inflation has cooled beyond expectations, the necessity for the Federal Reserve to raise interest rates has decreased, and concerns about economic recession have eased. The operational risks of factories at all levels in the engineering plastic industry have slightly improved, and the profitability of production enterprises has improved. Combined with the increase in international oil prices this month, the common remote cost of the plastic industry has strengthened. Overall, the market performance of the engineering plastic industry was relatively positive in August, with prices rising more than falling.

 

POM

 

The POM market was strong in August, leading the rise of the engineering plastic industry. The operating rate of domestic polymerization plants was close to full operation at the beginning of the month, and then the load gradually decreased to 81%, resulting in a synchronous contraction of spot supply. There is no pressure on industry inventory, and even some oversold situations occur, with significant support from the supply side for the market. The operating level of terminal enterprises this month is average, but stimulated by the tight supply of goods, the enthusiasm for stocking is still good, and the transaction position of orders is high. Traders’ confidence remains strong, and the sentiment of speculation on the market remains strong. Currently, we are about to enter the peak season of traditional plastic demand. Based on various factors, it is predicted that the POM market may continue to strengthen in the short term. It is recommended to focus on industry operating rates.

 

PC

According to the monitoring of big data on prices by Business Society, after sorting and running last month, the price of domestic PCs increased significantly in August. Within the month, the overall operating rate of domestic PCs was adjusted within the range of around 77%, and although the industry is still in a three-year high load position, there is ample supply. But the PC anti-dumping ruling of the Ministry of Commerce came into effect within the month, which boosted the spot market rapidly. In addition, the rebound of raw material bisphenol A after the decline has strengthened the support for spot goods. Downstream just needs to pick up the goods, and on-site trading is still acceptable. Affected by the positive effects of the above two aspects, it is expected that the PC market may continue to operate stronger.

 

PA66

 

The domestic PA66 market has experienced strong fluctuations this month. Overall, the spot prices of various brands have increased throughout the month. During the month, the overall industry load decreased narrowly to around 65%, and supplier pricing operations were mainly active in supporting the market, forming a certain support for the spot market. On the upstream side, although the domestic market for adipic acid is relatively weak, the adipic acid market has increased. The trend of pure benzene and cyclohexanone as raw materials has strengthened, and the support for PA66 spot prices on the cost side is still acceptable. Downstream enterprises mainly rely on goods to maintain production, and their inventory is generally digested. Terminal stocking needs to be actively improved. Buyers’ resistance to high priced sources of goods has created resistance to the rise, but the overall stability of the PA66 market in August has shown some improvement, and it is expected to maintain a sideways consolidation operation in the short term.

 

PA6

 

POLYVINYL ALCOHOL

The domestic PA6 market fluctuated in August, with prices rising in a narrow range. Overall, the monthly operating rate remained stable, with a slight adjustment in the monthly average load of around 77%, and the supply remained sufficient. The raw material caprolactam market was driven by the rise in pure benzene prices in the first half of the month and followed suit. In the second half, the positive news was exhausted, and the overall price fluctuated and corrected. The overall increase within the month was higher than that of PA6, which has a positive impact on the cost side of PA6. The operating rate of the downstream industry of PA6 has generally remained stable with minor adjustments, and the comprehensive load is still acceptable. The actual delivery is average, and the flow of goods is relatively slow. At the end of the month, there is a wait-and-see atmosphere for terminal stocking, but the demand side is not positive enough. The current market is full and short, and it is expected that the PA6 market will continue to consolidate and operate in the short term.

 

PET

 

The PET water bottle level market remained stable and weak throughout August, with a narrow downward adjustment in price position. At the end of the month, the industry load was close to 83%, and the overall supply in the domestic market was abundant. The shortage of goods in some regions has increased the resilience of the supply side to a certain extent, narrowing the negative impact on suppliers. In terms of raw material PTA and ethylene glycol, both fell in the first half of the month, while the market recovered in the second half, resulting in weak overall support for PET costs. Downstream procurement is just needed, and the negotiation atmosphere is average. The confidence of the cargo holders is not strong, and the offer is rigid and the price is high. The negotiation atmosphere is biased towards giving up profits and taking orders. It is expected that the PET market may continue to operate in a stalemate in the short term.

 

Future Market Forecast

In August, the prices of the five engineering plastics mentioned above rose four times and fell one, indicating a positive overall market pattern in the industry. The overall supply and demand level of the industry during the month was healthy, and the pressure on inventory was moderate. The confidence of the aggregation enterprise is relatively good, and the pricing is mainly in line with the market. At the same time, the decrease in international crude oil supply and the improvement in energy demand this month have played a supporting role in the remote cost of engineering plastics. In addition, the external economic environment has been eased in the short term at the macro level, leading to a narrowing of industry operational risks. Therefore, the Commodity Market Analysis System of the Business Society believes that the current market is biased towards bullish guidance, and it is expected that as the traditional peak demand season approaches, the overall market situation of engineering plastics may enter an upward trend in early September.

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