BASF Dow Prices Acrylic Industry Chain Concerned

Since New Year's Day, stimulated by the rebound in international crude oil prices, international propylene prices have continued to rise, accumulating a margin of 3%-5%. Analysts believe that as the source product of the propylene industry chain, propylene prices stabilized and rebounded quickly, which means that the industrial chain's cost center has shifted upwards, and the horn of the price increase of the propylene industrial chain series may blew.

The number of international acrylic acid prices rises in the downstream products of the propylene industrial chain. The rise in international acrylic acid prices deserves attention. On Monday, BASF announced that it will raise the price of acrylic acid and other ester products by 5 cents/lb in January. This is equivalent to a 3%-4.5% increase over December 2012. Previously another major maker, Dow, raised the price of all acrylic monomers by 3 cents/lb.

From the perspective of supply, the production capacity of acrylic acid and esters has been greatly reduced. In the second half of 2012, there was a supply shock in acrylic acid. The first was the 460,000-ton acrylic device explosion at the end of September in Japan, which has not yet been restarted; followed by the suspension of Dow's American installation fire in November and the failure of BASF's German 270,000 acrylic unit. About 9% to 14% of global plant capacity is affected, and acrylic acid and esters are in constant supply. Since the end of September 2012, U.S. mainstream acrylic manufacturers have repeatedly pushed up monthly contract prices.

The situation in the first quarter of 2013 showed that in addition to the devices that have not yet resumed production, Japan's catalysts in Indonesia's 60,000-ton plant and Yangzhou BASF's 160,000-ton plant will be shut down again, and the industry's supply will be further reduced. The international price difference between acrylic acid and propylene rose steadily after the supply contraction.

Domestic Acrylic Acid or With Accelerated However, the prices of domestic acrylic acid and esters quickly dropped after a short-term surge, and the spread with the international market expanded, especially after the US contract price was raised again in January, and the spread at home and abroad further expanded. Judging from the latest domestic quotation, the new round of recovery followed the start. The difference from the previous round of price inflation is that the recent quotation implies more explicit price synergies, and several sets of domestic equipment have started to overhaul, which supports the price increase.

Among listed companies, Satellite Petrochemical (002648) has 160,000 tons of acrylic acid production capacity and 150,000 tons of general-purpose acrylate production equipment. On January 7, 2013, the company began to increase the price of acrylic acid and ester by RMB 200/t. Analysts pointed out that the price of acrylic acid and esters is expected to increase further based on internal and external price spreads, domestic supply and demand conditions, and the overall price rise of the entire chemical industry.

Propylene oxide prices are now rebounding In addition to acrylic acid and esters, the recent price of propylene oxide has begun to rise. Some manufacturers raised their factory prices by 200-300 yuan per ton on January 7-8, and some of them rose by nearly 5%.

From the situation in 2012, the overall price of propylene oxide declined. According to statistics from business clubs, the high price point appeared in February at 14,266 yuan/ton; the low price appeared in June at 10,225 yuan/ton. In December 2012, the price trend of propylene oxide declined first. The rebound has continued since early 2013.