Q3 DCPD Price Fell after Surging
In the third quarter of 2021, the domestic DCPD market surged and then fell back under the joint influence of supply, demand and cost. In the later stage, the decline in DCPD prices is expected to be limited.
China’s DCPD prices surged from July to late August, but fell in September. As of end September, the prevailing ex-works price of DCPD averaged around RMB 4,900/mt. The highest price in the third quarter was RMB 5,400/mt or so, hitting a new high in the year.
The change in demand is the most important factor affecting the price of DCPD.
The overall operating rate in the downstream hydrogenated resin market was stable, while that of the unsaturated resin dropped after rising. Specifically, the overall operating rate in unsaturated resin market picked up significantly in July with the production resumption of early shutdown units in Hebei and Shandong. But from August to September, due to the shutdown of some enterprises under emergencies in Fujian and the production cut of many enterprises in East China, the demand for DCPD decreased, which weighed on the DCPD market.
Changes in supply have a secondary impact on market prices.
Early in the third quarter, Beihua Luhua Chemical, Shandong Luhua Hongjin New Material and Shandong Yuhuang Chemical took overhauls successively, thus the overall supply in the market was less than before. The decline in manufacturers' inventory and steady export orders led to a decline in tradable sources, which pushed up DCPD manufacturers’ quotations. Near the end of the quarter, the market supply was expected to increase with the maintenance units resuming production, which undermined DCPD prices.
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