According to the monitoring of the business community, in December, the domestic adipic acid market bottomed out and rebounded, mainly because of the good support from the supply side. At the end of the month, the market price range of adipic acid was 9800-10000 yuan/ton. Adipic acid increased by 3.73% throughout the month.

Adipic acid industry chain

Adipic acid industry chain showed a weak performance this month, with the exception of adipic acid, upstream and downstream were mainly down. Pure benzene is weak, with a small range of rise and fall. The performance of downstream PA66 is relatively weak, with a significant decline of -6.45%. The terminal demand is weak, and the industrial chain is resonant.

Supply side

From the perspective of market supply, the rebound of adipic acid in this month was mainly driven by tight supply. The monthly operating rate of enterprises remained low, about 50%. In the month, Tianli Hi Tech reduced the load of its devices, Zhonghao added a set of devices to the maintenance camp, and in addition, a large number of maintenance devices had not been returned to work in the early stage, the operating rate was lower than that in November, the enterprise’s inventory was low, and the supply was slightly tight. The supplier set the price to push the market, and the collection price and listing price of large factories were generally increased by 500 yuan/ton.

Cost side

On the cost side, crude oil maintained a range shock trend, while pure benzene showed a weak trend, with weak support on the cost side. This month, the domestic supply of pure benzene is abundant, the import is also high, and the port inventory is high. Downstream demand is relatively low, procurement is still sluggish, and the pattern of market oversupply has not changed. At the end of the month, the price of East China pure benzene was between 6400-6500 yuan/ton.

Demand side

The downstream demand of adipic acid is weak, and the rigid demand is the main demand. Take the downstream PA66 as an example. According to the monitoring of the business community, the downstream PA66 declined significantly in December, at -6.45%. In terms of supply, the operating rate of PA66 remained around 65%, and the market supply was abundant. Weak demand is hard to change. This month, the terminal enterprises just need to follow up on the purchase of goods, and the enthusiasm for downstream goods preparation is not high. The psychological impact of buying up but not buying down, and the treatment of price reduction is also relatively cautious, and the merchants’ shipment is not smooth. As of the end of the month, the market price of PA66 was 21800 yuan/ton.

Future outlook

The business community believes that, in the short term, the cost may be supported by the strong operation of crude oil or the promotion of pure benzene out of the decline in the later period under the geopolitical tension. The positive supply side will gradually highlight, the supply will continue to be tight, the inventory will be low, and the manufacturer may continue to push the price, so the adipic acid market still has room for rebound. However, the demand side or the constraint factor is relatively slow to follow up at present. Under the supply and demand game situation, adipic acid or recent shocks are mainly strong.