SunSirs: The Contradiction between Supply and Demand is Profound, China PA66 Market Fell deeply in 2022

According to the monitoring of SunSirs, the PA66 market in 2022 began to run in a weak position at the beginning of the year at 36,500 RMB/ton. As of December 31, 2022, the price of PA66 was 21,750 RMB/ton, down 40.41% for the whole year, with a deep decline.

The market trend of PA66 in 2022 is mainly divided into two stages:

The first stage: the overall decline stage. According to the monitoring of SunSirs, the average price of PA66 was 36,500 RMB/ton on January 1, and fell to an annual low of 20,750 RMB/ton as of July 29, a range drop of 43.15%. PA66 fell in the first phase of 2022 for nearly eight months. On the whole, the fundamentals of the industry weakened. Public health events affect logistics and shipping, and the geographical contradictions in Europe drive the petrochemical industry chain to fluctuate. Multiple negative factors all have a negative impact on the PA66 market to varying degrees, but the main negative factors focus on the supply and demand contradiction. Due to the rising market in 2021, the cost of the downstream industry will be under pressure in 2022. Superimposed by the impact of global inflation economic environment, small and medium-sized terminal businesses will leave the market, and market demand will be deeply trapped in the mismatch between supply and demand. At the same time, the upstream supply is relatively abundant at this stage, and the support for PA66 spot is insufficient. Superimposed by the abundant supply of PA66, the spot price at this stage is almost falling at a uniform rate.

The second stage: weak shock stage. According to the monitoring of SunSirs, the average price of PA66 from 20,750 RMB/ton on July 29 to 21,750 RMB/ton on December 31 was 4.82% higher. At this stage, as the traditional peak demand season "golden nine and silver ten" drives the demand, boosting the trading of PA66 industry, the price rises temporarily. However, on the whole, the consumption release in the peak demand season of 2022 was less than expected. In addition, the load of downstream enterprises was low for a long time. After the price rise, the market was frozen until the middle of November, and the market fell again.

Overall, the trend of PA66 market in 2022 is mainly affected by the following aspects:

The industry maintains rapid development, and loose supply is unstoppable. The demand side of downstream enterprises with low load dragged down PA66 market. Raw materials fell, PA66 cost end support collapsed.

The analysts of PA66 from SunSirs believe that the capacity of PA66 will expand steadily in 2022, the demand of downstream enterprises will lag behind, and the contradiction between supply and demand will gradually spread. The upstream adipic acid fell, the supply of hexamethylene diamine was unstable, and the load of PA66 enterprise was not high in the second half of the year, causing the enterprise's loss to expand. On the macro level, the current global inflationary economic environment remains unchanged, the wide fluctuation of oil prices driven by European geopolitical conflicts, the rebound of domestic health events, and the devaluation of the RMB have all had a negative impact on the PA66 market to varying degrees. To sum up, in 2022, the bad news of PA66 industry will be superimposed, and the activities will tend to be conservative, with average market momentum. It is expected that China PA66 market will continue to weaken due to insufficient demand.

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