In January 2024, the chemical market showed a relatively strong performance. With the backdrop of a slightly stronger international crude oil market, some products experienced supply adjustments, resulting in price increases due to tighter supply. However, as it was the traditional off-season for demand and limited pre-holiday stocking, the demand had limited impact on price upliftment. Therefore, although chemical prices exhibited a relatively strong trend in January, the actual increase was limited.

According to the Paint Procurement Cost Index released by the Institute of iBuyChem, the index for paint procurement costs in January 2024 was 88%, representing a 1-percentage-point increase compared to December 2023 and a slight increase compared to January 2023. In January, prices of major raw materials for paint production, such as toluene, pure benzene, xylene, butyl acrylate, isopropanol, butyl glycol ether, MMA, TDI, and poly-MDI, showed varying degrees of increase. However, prices of epoxy resin, ethyl acetate, propylene glycol, acrylic acid, and titanium dioxide witnessed a decline.

Looking at the trend of representative products:

Epoxy Resin: In January, the average monthly price of epoxy resin was ￥13,014 per ton, showing a month-on-month decrease of -2.05% and a year-on-year decrease of -12.56%.

In January, the epoxy resin operating rate and production in China declined as the Chinese New Year approached. Epoxy resin production enterprises gradually went on holiday, and downstream sentiment remained subdued, with no significant improvement in overall demand. Downstream industries such as coatings, wind power, and electronics only saw periodic replenishment. Due to a cautious outlook for the future market, some epoxy resin units have been in a parked or reduced-load state around the Chinese New Year. With a significant reduction in market supply, there may be a slight upward push post-holiday driven by low inventory and post-holiday restocking. However, as the phase of periodic replenishment concludes, the market may continue to exhibit a weak position.

Propylene Glycol: In January, the average monthly price of propylene glycol was ￥8,162 per ton, reflecting a month-on-month decrease of -3.05% and a year-on-year increase of +0.63%.

In January, the propylene glycol market prices in China continued to decline month-on-month, with a slight improvement in pre-holiday orders. Within the month, the units that commenced production at the end of 2023 increased the overall supply of propylene glycol. However, despite this increase in the overall supply, demand support remained insufficient. Although there was some downstream replenishment before the Chinese New Year, the overall support for propylene glycol remained weak. The market continued its weak trend. By the end of January, the mainstream price of propylene glycol in the market was ￥7,800- ￥7,900 per ton, representing a decrease of ￥400 per ton compared to the beginning of the month.

MMA: In January, the average monthly price of MMA was ￥13,185 per ton, showing a month-on-month increase of +12.03% and a year-on-year increase of +30.51%.

In January, the MMA market experienced an initial surge followed by a subsequent decline. In the early part of the month, some factories underwent maintenance, leading to tight spot availability and shifting negotiation focus on higher prices. However, as market resources gradually replenished in the latter half of the month and with weak demand stimulation, prices experienced a slight decrease. Overall, the month saw positive support from the supply side, accompanied by a slight decrease in ACH process costs. As of the end of January, the mainstream prices in the East China market stood at ￥12,700-￥12,800 per ton, while in the Shandong market it ranged from ￥12,700-￥12,800 per ton, and in the South China market it ranged from ￥13,800-￥14,000 per ton.

Pure Benzene: In January, the average monthly price of pure benzene was ￥7,708 per ton, indicating a month-on-month increase of +10.33% and a year-on-year increase of +11.81%.

The market for pure benzene in East China experienced a significant uptrend in January, with the price range fluctuating between ￥7,325-￥8,250 per ton during the month, reflecting a substantial 10.33% increase compared to December 2023. In the first half of January, a combination of factors such as declining inventories at East China ports, rising international prices, and positive support from styrene prices led to an active push for higher listing prices. However, in the latter half of the month, a decline in terminal sales volume hindered the continued surge of pure benzene, resulting in a modest price correction.

Xylene: In January, the average monthly price of xylene was ￥7,287 per ton, showing a month-on-month increase of +3.29% and a year-on-year increase of +3.13%.

In January, the xylene market experienced overall upward fluctuations in China. As of the end of the month, prices in the East China region reached ￥7,287 per ton, with a month-on-month increase of 3.2%. In the South China region, prices stood at ￥7,322 per ton, while in the Shandong region, they reached ￥6,988 per ton, reflecting a month-on-month increase of 2.8%.

Throughout the month, xylene received support from both the supply and demand sides. As the Chinese New Year holiday approached, downstream industries engaged in multiple short-term purchases at lower prices, contributing to a sustained demand. This, in turn, alleviated inventory pressures for enterprises and bolstered spot prices. Furthermore, the favorable price spread between mixed xylene (MX) and purified terephthalic acid (PX) provided rigid support for PX demand. Additionally, the upward trend of international prices for aromatic hydrocarbon products lent further support, driving up the spot market prices for xylene.