Metallurgy / Chemicals / Rubber & Plastics

Just after June started, the chemical giants kicked off the price increase. Domestic titanium dioxide companies have sent letters to announce the increase, and overseas chemical giants such as Chemours, Connors and Tenuo even arranged price increases in July in the second quarter.

In addition, the recent rise in commodities continues. Whether it is chemical products such as titanium dioxide, carbon black, PVC, or bulk industrial products such as steel, iron ore, and coal, and even products derived from basic energy products such as crude oil, coal, and natural gas, they have maintained a high level of shock. It's not crazy. Many people said, "If you go up, you will go up. If you go up, I will also go up. Anyway, I am not the last link and will not suffer the most." But is this really the case? More and more midstream and downstream companies are beginning to realize that things are beginning to develop in an "uncontrolled" direction.

3M, Cabot and other chemical giants continue to send letters, the chemical industry is gaining momentum

Carbon black giant Cabot (China): Starting June 1, the price of all rubber carbon blacks on sale will be raised by RMB 1,200/ton. It had previously announced that starting from July 1 or subject to the customer’s contract, the price of all carbon black products in North America would increase by $0.06/lb (approximately 852 yuan/ton).

Oceya (China): Starting from June 1, 2021, the unit price of carbon black products in RMB will increase by 1,000 yuan/ton.

BYK Additives (Shanghai), the world's leading additive company: Starting from June 1, 2021, the price of BYK's products will be increased by 8% worldwide, and the price of small packaging barrels in European and Asian factories will be increased by an additional 0.12 euros. /Kg (approximately RMB 944.5/ton), an additional price increase of $0.06/lb (approximately RMB 891/ton) for small packages in the US factory.

The leading domestic iron oxide company Huayuan Pigment: From June 1, 2021, the sales price of iron oxide pigments will be raised: iron oxide red and yellow products will be raised by 500 yuan/ton ($80/ton), and iron oxide black products will be raised by 300 Yuan/ton ($50/ton). The price adjustment is subject to the order signing date.

Effective from June 1, 2021, or if the contract permits, BASF will increase the price of all Lupranate® TDI products by 0.10 USD/lb; increase the price of all Pluracol® polyol products by an increase of per liter $0.10/lb.

BASF announced that starting from July 1, 2021 or subject to existing contracts, BASF will increase the price of 1,4-butanediol (BDO) and its derivatives in North America.

BASF announced that effective from June 15th, or where the contract permits, BASF’s formulation and performance additives business will increase the price of its North American product line: formula additives up to 10%, performance additives up to 20%.

These product lines include BASF's brands Calsan®, Chimassorb®, Curesan®, Dispex®, Irgafos® Irganox®, IRGACURE®, EFKA®, Foamaster®, FOAMSTAR®, Hydropalat®, Loxanol®, RHEOVIS®, Sterocoll ®, Tinopal® and Tinuvin®.

Solenis, a leading international specialty chemicals company: Starting from June 1, 2021, the prices of the following polyacrylamide, polyamine products and acrylic polymers will be adjusted upwards again within the Asia-Pacific region, with an increase of 4% -35%.

3M (China), a global top 500 chemical company: Starting from July 1, 2021, the price of some products of 3M commercial solutions will be adjusted by 3%-15%.

The domestic mainstream PVC average price is 9,150 yuan/ton, which is an increase from the price of 8962.5 yuan at the beginning of the month, an increase of 2.09% during the month, and an increase of 49.69% compared with the same period last year.

Recently, the phosphorus chemical industry sector has gone red across the board. The phosphorus chemical index was 1087 points, an increase of 5 points from the previous day, setting a new historical high in the cycle, and an increase of 45.13% from the lowest point of 749 points on October 07, 2018. The reference average price of 30% grade phosphate rock in mainstream areas in my country is around 510 yuan/ton. Compared with the price on May 1, the average price has increased by 30 yuan/ton, an increase of 6.25%, and an increase of 30.21% compared with the same period last year.

Due to the increase in the price of raw material yellow phosphorus, the current price of yellow phosphorus is as high as around 25,000 yuan/ton, and the supply is in short supply. The phosphoric acid market is supported by costs and the price rises in conjunction with the increase in the range of about 350-1100 yuan/ton. Rising to a high level, take Ronghong Chemical as an example, the latest price is 6,400 yuan/ton.

13 steel mills raise prices

Recently, the domestic steel market prices have risen sharply across the board; Tangshan steel billet manufacturers are cautiously reporting stable operations, ex-factory execution including tax is 5,000 yuan / ton, and 13 steel mills across the country have increased the ex-factory price of construction steel by 30-200 yuan / ton.

The price of rebar for October delivery rose by 2.5% to close at 5,027 yuan ($789.96) per ton. Hot-rolled coils used in manufacturing rose 1.3% to 5354 yuan per ton, and recorded a 5.9% drop in May. Shanghai stainless steel futures for delivery in July rose 2.7% to 15750 yuan per ton.

Affected by the rising prices of bulk industrial products, the domestic commodity market is also rising. However, unlike the "full-line price increase" that everyone imagines, the upstream price increase does not seem to drive the midstream and downstream to increase prices together. Instead, it brings huge and unpassable pressure on the midstream and downstream companies.

According to Li in the plastics industry, the price of the product is 9,500 yuan/ton, of which the cost of raw materials accounts for 8,500 yuan/ton, and the cost of other rents for artificial hydropower operation only accounts for 1,000 yuan/ton. The material has risen by nearly 20 yuan from the end of last year to now. %, but the comprehensive price increase for fixed customers and individual customers is less than 10%, which is under great pressure.

Ms. Jian in the curtain industry said that the prices of fabric suppliers have increased twice, and the cumulative increase is about 12% to 13%. Because of fear of losing consumers, Ms. Jian said that they will not increase prices for the time being.

Pulp rose by 40%, while finished products only rose by 20%. The upstream price rose once every three days, and paper mills stopped production one after another. The prices of raw materials remain high, and every ton of paper produced is losing money. Some factories would rather take a holiday than produce.

Costs exceed gross profit, and foundry companies cannot continue to produce. Due to the continuous increase in upstream raw materials, downstream companies are unable to make profits or even lose money on orders, and many companies’ willingness to accept orders has been significantly reduced. Some companies have suspended production, and some factories have given employees a holiday.

The boss of a home improvement company said that after the Spring Festival this year, he received more than a dozen price increases notices. Not only some plastic products, but also steel, wires, cement, etc., have risen to varying degrees. When the price of raw materials rises by 10%-20%, the net profit is basically gone. The orders that have been received have basically lost money, and now they are hard-bearing, and new orders are not even dare to take.

The electronics factory said that the cost of materials has risen sharply, and the cost of products has risen sharply. Customers no longer place orders because there is no profit. In addition, the capital chain is broken, and some electronics factories have closed down and laid off employees.

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The rise in upstream costs cannot be transmitted to the rise in prices of consumer goods downstream. Under the "scissors gap", the profits of downstream operators have been cut layer by layer. This clearly tells us the fact that commodities have risen more sharply, and consumption recovery is still slow. Under the capital erosion, the upstream can achieve "if you like to buy or not, I will still increase the price". The downstream recovery is weak, and I have no choice but to "you love to rise or not, I really can't buy it." The worst is the midstream companies-rising raw material costs cannot be transmitted downstream. If you don’t start working, you can’t sell, you still go bankrupt. The overwhelmed crying father and mother just rely on hard resistance. Some companies said that no matter how unscrupulous the rise is, there will be no firewood. The last choice is to completely delist the market.