In the March–June 2013 period, the chemical market saw a mixed performance, with 46 products experiencing price increases. Among these, four products rose by more than 5%, making up 3.8% of the monitored items. The top performers were hydrogen peroxide, which surged by 9.56%, followed closely by two unnamed products, rising by 7.14% and 7.10% respectively.
On the other hand, 58 products faced a month-on-month decline, with 24 of them dropping by over 5%. This accounted for 22.6% of all monitored commodities. The most significant declines came from butadiene, which fell by 25.68%, crude benzene down 16.40%, and coked benzene decreasing by 13.06%.
The overall monthly average change was -1.6%, indicating a slight downward trend. In March, the domestic chemical market shifted from its previous upward trajectory, with a sharp rise in the number of declining products. Out of 68 representative chemicals monitored, 40 showed a drop, compared to just 24 in February. The largest decline was seen in Yindie products, which dropped from -5.68% to -16.40%.
The Business Community Index (BCI) for March 2013 stood at -0.57, with an average monthly change of -2.6%. This signaled a contraction in the manufacturing sector and highlighted growing economic risks, especially within the chemical industry.
Zhang Ming, head of the chemical branch at the business club, stated that the domestic chemical market entered a new phase of downward adjustment in March. He pointed out that weak terminal demand has become the primary driver behind the overall downturn in the cost cycle.
Firstly, international crude oil prices continued to fall during the mid-to-late period, leading to weaker cost support for downstream petrochemical products. Key examples include ethylene, paraxylene, and ortho-xylene, which saw sharp price drops both internationally and domestically. Although crude oil prices rebounded toward the end of the month, market participants remained pessimistic about future trends.
Secondly, the weak international market had a strong impact on domestic conditions. In March, the foreign market experienced negative spreads. For instance, PX arrival prices fell from $1,700/ton at the start of the month to $1,400/ton by the end. Similarly, OX prices dropped from $1,620/ton to $1,480/ton, while the foreign price of ** also declined by 33 cents per gallon. Potassium chloride prices to Hong Kong were even lower than Sinochem's contract price, showing weakness across both organic and inorganic products.
Thirdly, sluggish demand spread throughout the industry. Only a few products like propylene, hydrogen peroxide, and DMF saw slight increases due to limited downstream demand.
Lastly, the influence of market speculation weakened this month. While TDI and polysilicon prices rose due to manufacturer-driven speculation, most other products did not see much benefit from speculative activity.
Looking ahead, Zhang Ming believes the domestic chemical market remains in a downward phase. With weak international and domestic demand and limited cost support, a broad recovery is unlikely in the near term. However, the paper and printing dyeing industries are entering their peak season, and the pull-up effect from upstream auxiliaries should not be underestimated. This could provide a small upward push.
It is expected that the overall recovery of the chemical industry may not occur until late May, when the procurement peak for organic products begins. Some products may experience early price hikes in April, but it’s unclear whether they will be sufficient to reverse the current trend.
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