China’s chemical market price Review in 2023

China's chemicals market is the largest in the world, and it's growth makes up half the growth ofthe global chemicals market. The edge that multinational chemical companies have enjoyedthere is thinning as China's local chemical companies become more competitive.

Increasingly, local companies are pushing their advantage , developing products and solutions optimized for the oversea market.

Looking back on 2023, the chemical market as a whole showed a state of declining more than rising. Among them, 48 products increased, accounting for 39% of the bulk list; there were 75 products that declined, accounting for 61% of the bulk list.

In the fourth quarter of the year, the first and third quarters were dominated by upward movements, while the second and fourth quarters were dominated by sharp declines.

In the first quarter: the market was overall flat, with 62 raw materials rising, accounting for 54%; and 52 raw materials falling, accounting for 46%. Among them, the raw materials with an increase of more than 20% are: formic acid (+29.2%), diethylene glycol (+27%), aniline (26.6%), hydrogen peroxide (20.6%); the decrease is obvious in the lithium battery industry chain, lithium carbonate industrial grade, Battery-level prices fell by more than 50%, ranking first on the list of declines.

Second quarter: The raw material market in this quarter has declined significantly, which can be said to be the lowest point of the chemical market in 2023. There are only 9 rising raw materials, accounting for 8%; there are 101 falling raw materials, accounting for 90%! Lithium carbonate industrial grade and battery grade rebounded, rising 32.7% and 20.6% respectively; polycrystalline silicon (-58.9%), diethylene glycol (-58.9%), sulfur (-34.5%), yellow phosphorus (-24.4%), phosphoric acid ( -21.2%) and other 21 popular raw materials fell by more than 20%.

Third quarter: Relying on the peak season, accidents of major manufacturers and market support, the growth rate is rapid, with more than 82% of raw materials rising (92 types of raw materials), and only 17% of raw materials (19 types) falling. Among them, hydrogen peroxide surged by 171.5%, with a quotation of 2,127 yuan/ton, a record high; 36 raw materials including acetic acid, sulfuric acid, soda ash, bisphenol A, and epoxy resin increased by more than 20%! The lithium battery industry chain plummeted again, ranking first on the decline list, with lithium hydroxide (-25.5%), lithium carbonate battery grade, and industrial grade falling by 44% and 46% respectively.

Fourth quarter: After the peak season, the market returned to rationality, coupled with the severe overseas situation, the market became more cautious, and the market began to decline again. Only 23 kinds of raw materials increased, accounting for 20%; a total of 89 kinds of raw materials fell, accounting for 77%. Among them, hydrogen peroxide, which surged in the third quarter, plummeted 61.6% this quarter, returning to around 800 yuan/ton. The three lithium battery giants continued their decline, with a drop of more than 40%.

The overall market performance has improved compared with 2022, but the growth of raw materials is limited. The industrial chain that ranked first in 2022 actually became the first to plummet in 2023! Chemical raw materials have undergone a major reshuffle. What enlightenment does it have on the chemical market in 2024?

The lithium battery industry chain has fallen as hard as it rose in the early stage. All four seasons of the year, three of them plummeted.

Lithium carbonate (industrial grade):The quotation at the beginning of 2023 was 504,000 yuan/ton, and the quotation at the end of 2023 was 94,000 yuan/ton, a month-on-month decrease of 81.35%, and a decrease of 410,000 yuan/ton.

Lithium carbonate (battery grade):The quotation at the beginning of the year was 525,000 yuan/ton, and at the end of the year it was 103,000 yuan/ton, a month-on-month decrease of 80.4%, a decrease of 422,000 yuan/ton.

Lithium hydroxide:The quotation at the beginning of 2023 was 553,000 yuan/ton, and the quotation at the end of 2023 was 133,000 yuan/ton, a month-on-month decrease of 75.9%, a decrease of 178,000 yuan/ton.

Lithium iron carbonate:The quotation at the beginning of 2023 was 166,000 yuan/ton, and the quotation at the end of 2023 was 46,000 yuan/ton, a month-on-month decrease of 72.3%, and a decrease of 120,000 yuan/ton.

In recent years, the new energy vehicle market has developed rapidly, pushing up related parts and raw materials. The lithium battery industry chain is riding the wind, once approaching the 600,000 mark. However, due to the increase in lithium mining and refining and the reduction in costs driven by technology, the production capacity of upstream lithium mines and lithium salts has rapidly expanded, leading to imbalances in market supply and demand and price fluctuations. By the end of 2023, my country's monthly production capacity of lithium iron phosphate will reach 356,000 tons, an increase of 178,000 tons from December 2022, an increase of 101.5%. The new production capacity has almost doubled, but the demand for lithium carbonate has not matched such a huge increase. In addition, under the influence of multiple factors such as changes in new energy market policies, increased environmental protection requirements, a large number of car companies cutting production and going bankrupt, and the overall global economic downturn, the raw materials of the lithium battery industry chain began to fall sharply.

It is expected that lithium salt prices will still be on a downward trend in 2024. In the short term, demand for lithium carbonate may remain sluggish in the first quarter of 2024 due to factors such as weather and the Spring Festival. It is expected that the spot price of lithium carbonate may fall below CNY80,000/ton by 2024.

Plasticizers top the list of annual increases

After experiencing the surge in popular industrial chains such as silicone, lithium batteries, and epoxy, the rising star in 2023 is actually the "unpopular" industrial chain - the plasticizer industry chain.

Plasticizer is a polymer material additive widely used in industrial production. It mainly weakens the secondary valence bonds between resin molecules, increases the mobility of resin molecular bonds, reduces the crystallinity of resin molecules, and increases the plasticity of resin molecules, making it Its flexibility is enhanced, it is easy to process, and it can be legally used for industrial purposes. It is widely used in food packaging, cosmetics, medical equipment, and environmental water bodies. Such as plastic wrap, food packaging, toys, etc.

According to data, in the chemical market in 2023, most of the increases will be in raw materials in the plasticizer industry chain, including PX, acetic acid, isooctyl alcohol, DOP, DBP, DOTP, n-butanol, etc. Among them, isooctyl alcohol topped the annual increase list, rising by 33.%, with an increase of 3,217 yuan/ton.

The upstream pigments of plasticizers are relatively concentrated, and the fluctuation of crude oil in 2023 will bring cost support to them. Moreover, because there are many categories of plasticizers, up to 1,000 types, their uses are also relatively wide, involving wires, cables, floors, artificial leather, building materials, and medical equipment. , automobiles, agricultural films, clothing, food and pharmaceutical packaging and other fields of economic daily life and new materials, terminal consumer demand has been significantly boosted, and the scale of plasticizers is also expanding. In 2023, the plasticizer industry chain will skyrocket.

It is expected that in 2024, as environmental protection efforts increase, the use of traditional plasticizers will be restricted. Companies in the plasticizer industry chain in various countries will increase technological innovation and R&D investment. Plasticizers will usher in a period of growth. However, due to their popularity It has high adaptability, wide application channels, and the growth span is not expected to be too large.

China chemical market outlook in 2024

OPEC+ production cuts, geopolitical tensions, the Red Sea crisis and other issues will have a supply impact on the market in the short term. It is expected that internal and external demand will recover in the short term, and the focus of the crude oil market has increased, which has also brought cost support to the chemical market. However, the market trends in 2023 also remind us that the cost of raw materials is no longer the key to industry profitability, and it mainly depends on downstream demand.

Below price catalogue of China Chemicals is based on verage ex-factory quotation of domestic factories in China for your reference.