Since April, prices on the international crude oil market have continued to rise. Brent and WTI crude oil prices have climbed to around US$83 -84 in mid-June. This round of increase in crude oil prices has also led to an increase in global chemical raw material prices.

    According to tracking by the Maihua Plastics Research Institute, propylene, a basic raw material, has been raising prices since April, and its current increase has exceeded 10%. Driven by propylene, core raw materials such as synthetic resins, composite materials, coatings, plastics and inks have successively increased their prices. The profit margins of the above chemical new material companies were greatly squeezed in the second quarter.

    In China, driven by high upstream TMA and neopentyl glycol prices, downstream powder coating polyester resin cost pressure has surged, and suppliers have begun to raise prices. In addition to powder coatings, liquid coatings are also facing cost pressures. Neopentyl glycol is also used as a raw material for film-forming additives for architectural coatings, directly promoting the increase in the cost of architectural coatings and acrylic emulsions.

    The upstream supply side has tightened. Two isobutyraldehyde factories in Jiangsu have been shut down for maintenance one after another, resulting in a decline in the operating rate of the industry. In addition, some isobutyraldehyde companies had maintenance plans in July, and the operating rate may decline further in the later period. In the short term, the market supply may continue to be relatively tight. Affected by trimellitic anhydride. The main raw materials of polyester resin for powder coatings are PTA and neopentyl glycol, which together account for about 80% of the raw material cost of polyester resin for powder coatings. Trimellitic anhydride is also used as a raw material for polyester resin. It is understood that the production of 1 ton of polyester resin requires 0.02-0.03 tons of trimellitic anhydride. Although the proportion of trimellitic anhydride is not high, the recent price surge has also produced a series of chain reactions.

    In addition to the increase in supply-side costs, the demand for new materials from automobiles and building materials has also continued to be weak, especially at the retail end of social consumption, where the demand situation is very pessimistic. According to the "Main Data on Total Retail Sales of Consumer Goods" released by the National Bureau of Statistics on June 17, the total retail sales of automobiles and materials in May fell by 4.4% and 5.4% respectively year-on-year. The unfavorable situation on the demand side will soon put pressure on the supply side.

    For new chemical materials companies that manufacture synthetic resins, composite materials, coatings, plastics and inks, in this severe operating environment, they should pay close attention to changes in the raw material market, adjust business strategies in a timely manner, and improve their ability to resist risks; at the same time, maintain good communication with downstream customers, jointly cope with rising cost pressures, and safeguard the interests of both parties. Source: Huizheng Information