A recent chemical industry weekly report highlights price increases for acetic acid and MDI during the week of March 30 to April 5. According to BaiChuan YingFu, the average market price of acetic acid reached 4,639 yuan per ton on April 5, marking a weekly increase of 31.94% and a year-on-year surge of 76.66%. On the supply side, the operating rate in the acetic acid market fell by 2.72 percentage points to 75.01% compared to the previous week. Acetic acid output for the week was approximately 248,400 tons, a decrease of 3.50% from the previous week. Production halts continued in Xinjiang and Nanjing, while new short-term disruptions occurred at key enterprises in East and Northwest China due to equipment failures.
The following is a summary of the research report: Ongoing geopolitical conflicts continue to affect the supply and transportation of crude oil and certain petrochemical products, increasing market volatility. Key areas to monitor include: 1. Large state-owned energy enterprises; 2. Leading coal chemical companies with stable raw material supply and relatively low costs; 3. Leading fine chemical companies with favorable supply-demand dynamics and effective cost transmission.
Industry trends for the week (March 30–April 5) show that among 100 tracked chemical products, 65 varieties experienced price increases, 14 declined, and 21 remained stable. On a monthly average basis, 84% of products saw price increases, 10% declined, and 6% remained flat. Products with the largest weekly average price gains included acetic acid (East China), acetic anhydride (East China), methyl ethyl ketone (East China), sulfuric acid (Zhejiang Juhua 98%), and vitamin E. Those with the largest declines included toluene (East China), NYMEX natural gas, PVC (East China calcium carbide method), nitric acid (East China), and glufosinate-ammonium.
International crude oil prices rose during the week. WTI crude futures closed at $111.54 per barrel, up 18.06% for the week, while Brent crude futures ended at $109.03 per barrel, gaining 0.94%. According to HuiTong CaiJing, WTI significantly outperformed Brent, even experiencing an inverted premium, mainly due to Middle East conflicts making U.S. crude a key alternative supply source and differences in delivery periods allowing WTI to more directly absorb short-term geopolitical shocks. This reflects a deep interplay between supply-demand mismatches and geopolitical premiums.
Macro factors contributing to the rise include escalating Middle East tensions. Reuters and The Washington Post reported that the U.S. issued strong signals toward Iran, raising market expectations of broader regional conflict and quickly boosting crude's geopolitical premium. Meanwhile, OPEC+ entered a policy discussion phase, with markets watching for potential adjustments to production plans in response to price volatility. Additionally, recent data showed a notable decline in OPEC's March output, indicating that export disruptions in some producing countries are already constraining actual supply. Against this backdrop of geopolitical risks and supply contraction, macro-level factors are driving oil prices upward.
EIA data for the week ending March 27 showed U.S. crude production unchanged at 13.657 million barrels per day compared to the previous week, but up 77,000 barrels per day year-on-year. U.S. total petroleum demand averaged 20.921 million barrels per day, an increase of 917,000 barrels from the prior week. However, U.S. gasoline demand averaged 8.686 million barrels per day, down 238,000 barrels. Total U.S. crude inventories, including strategic reserves, rose by 5.1 million barrels to 8.767 billion barrels.
Looking ahead, short-term geopolitical risks dominate, requiring close monitoring of developments. In the medium to long term, once conflicts ease, oversupply pressures may push international oil prices lower, though unexpected geopolitical events could still cause sharp fluctuations.
NYMEX natural gas futures fell 6.67% for the week, closing at $2.80 per mmbtu. EIA's weekly natural gas storage report indicated that as of March 27, U.S. natural gas inventories totaled 1.865 trillion cubic feet, an increase of 36 billion cubic feet from the previous week and 96 billion cubic feet higher than the same period last year, up 5.4%. Inventories were also 54 billion cubic feet above the five-year average, a 3.0% increase. Short-term outlook suggests Middle East tensions are driving up international natural gas prices. Medium-term, Europe's fragile energy supply structure, combined with geopolitical maneuvering and seasonal demand shifts, may lead to wide, volatile price swings.
Acetic acid prices rose during the week. Supply-side factors included a lower operating rate and reduced output, with continued shutdowns in Xinjiang and Nanjing and new short-term disruptions in East and Northwest China. On the demand side, the average operating rate for eight key downstream products of acetic acid was 62.54%, up 2.30 percentage points from the previous week. Downstream demand showed a slight recovery, with steady procurement. High costs necessitate ongoing monitoring of downstream operating rates.
Cost-wise, continued Middle East instability pushed methanol prices higher, rising 5.26% from 2,585 yuan to 2,721 yuan per ton. The theoretical average profit for acetic acid as of April 2 was approximately 1,889 yuan per ton, up about 128.14% week-on-week. Inventory levels fell notably, with total marketable acetic acid stocks around 159,800 tons as of April 2, down roughly 11.18% from the prior week. Inventory reduction was driven by tightened supply due to equipment failures and increased purchasing activity ahead of the Qingming Festival, further depleting stocks.
Outlook for acetic acid suggests that short-term shutdowns in Northwest and East China are expected to resume normal operations after the holiday, while some facilities in Central and East China may begin maintenance. With current inventory levels relatively low, supply-side support remains favorable. Downstream acetate product operating rates are expected to stay largely stable. Overall, short-term acetic acid markets are supported by supply and cost factors, with prices likely to consolidate at high levels.
MDI prices also increased during the week. The average market price for polymeric MDI was 20,000 yuan per ton on April 3, up 10.50% week-on-week and 25.00% year-on-year. Pure MDI averaged 24,750 yuan per ton, rising 10.00% from the previous week and 39.83% year-on-year. Supply remained stable with most plants operating normally. Demand for polymeric MDI saw limited order fluctuations in home appliance sectors, modest order releases in northern insulation piping, and slow new order growth in southern enterprises. Cold chain and board industries had some orders but provided limited market support. Pure MDI downstream sectors included spandex operating at 80–90% capacity, TPU major producers at 50–60%, coating plants focusing on previous orders, and sole raw material markets stabilizing. With new factory price increases and limited imports from Japan and South Korea, but restrained demand-side support, MDI prices are expected to fluctuate with a firm bias.
Investment advice: As of April 5, the SW basic chemicals sector P/E ratio (TTM, excluding negatives) was 27.78 times, at the 80.95 percentile historically (since 2002). The P/B ratio was 2.48 times, at the 67.80 percentile. The SW petroleum and petrochemicals P/E ratio was 16.66 times, at the 50.42 percentile, with a P/B of 1.56 times at the 54.09 percentile. Looking ahead to 2026, industry capacity expansion is nearing its end, and measures such as "anti-involution" may catalyze bottom-line profit recovery. New materials are poised for growth driven by rapid downstream demand.
Short-term, geopolitical conflicts continue to impact crude oil and certain petrochemical supply and transport, increasing volatility. Focus areas include: 1. Large state-owned energy enterprises; 2. Leading coal chemical companies with stable, low-cost raw material supply; 3. Fine chemical leaders with sound supply-demand balance and effective cost transmission. Medium to long-term investment themes include: 1. Traditional chemical leaders demonstrating operational resilience, expanding into new materials, and improving competitiveness for potential earnings and valuation uplift; 2. Ongoing catalysts like "anti-involution" in sectors with improving supply-demand dynamics, including refining, polyester, dyes, organic silicon, pesticides, refrigerants, and phosphate chemicals; 3. New materials companies benefiting from downstream industry growth.
Recommended stocks include: PetroChina, CNOOC, Sinopec, Hengli Petrochemical, Eastern Shenghong, Tongkun Group, Xin Feng New Materials, Zhejiang Longsheng, Xingfa Group, Yangnong Chemical, Lier Chemical, Liaoning Hi-tech, Juhua Group, Yuntianhua, Sailun Tire, Anji Technology, Yoke Technology, Dinglong Shares, Jiangfeng Electron, Shengquan Group, Dongcai Technology, Zhongcai Technology, NSIG, Debang Technology, Yanggu Huatai, Wanrun Technology, Lighttech, Lanxess Technology. Stocks to watch include: Rongsheng Petrochemical, Shanghai Petrochemical, Sanfangxiang, Wankai New Materials, Hengyi Petrochemical, Huaren Materials, Xinyangfeng, Zhongce Rubber, Techlong Sciences, Huate Gas, Lianrui Materials, Honghe Technology, Aolaide, Realcan Pharmaceutical, Weike Technology. April top picks: Satellite Chemical, Yoke Technology.
Risks include significant oil price fluctuations due to geopolitical changes and shifts in the global economic situation.
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