Although the Jiangsu Xiangshui explosion accident has been more than a month, its impact is still continuing. It's a rock hitting the surface of the water, and a circle of ripples is a circle of energy, and the scope of the spread is getting larger and larger. 3.12 Accident is a trigger, led to the chemical industry safety rectification, large areas of the chemical industry to stop and limit production, and a large number of non-compliant chemical enterprises to shut down. The temporary and phased market shortage and the formation of the oligopoly market are constantly stimulating the price rise of chemical raw materials, and products related to flexible packaging such as ink and adhesives have been affected by the price rise, and then inevitably passed to flexible packaging enterprises.

Flint: The Jiangsu explosion has caused a global shortage of raw materials

Flint Group said in the latest press announcement that the huge explosion accident at Jiangsu Tianjiayi Chemical Company in China in March has begun to have an impact on the global ink raw material supply chain, including raw materials used for publishing and UV printing inks.

According to Arno de Groot, vice president of procurement for the packaging division of Flint Group, "Thousands of factories have been closed. "Government investigations and safety inspections will affect the entire chemical industry in China, not just the provinces where the disaster occurred."

The impact of the explosion incident has been felt across the UV and publishing printing ink supply chains, as the wave of closures will affect companies that supply materials for photoinitiators and red and yellow pigments. Podd said the shortage of raw materials will not affect the supply of ink to Flint Group customers.

Since April, Wanhua Chemical MDI has raised its price for the third time in the year, and polyurethane materials may be affected

According to the announcement of Wanhua Chemical, starting from April, the listed price of China's aggregate MDI distribution market is 17,800 yuan/ton (up 2,600 yuan/ton from March), and the listed price of direct marketing market is 18,300 yuan/ton (up 2,800 yuan/ton from March); The listed price of pure MDI is 26,200 yuan/ton (1500 yuan/ton higher than the price in March).

Combing found that this is the third consecutive time Wanhua Chemical has announced an increase in MDI prices in China this year. MDI is one of the most important raw materials for the production of polyurethane, and its application fields involve light industry, chemical industry, electronics, textile, medical treatment, construction, building materials, automobile, national defense, aerospace, aviation, etc., but the technical threshold of MDI is extremely high, and it has been controlled by chemical giants such as Dow and BASF for a long time. Wanhua Chemical gradually breaks the monopoly and grows into the largest MDI manufacturing enterprise in the Asia-Pacific region. It is also the only independent production factory in China. Therefore, MDI is currently an oligopoly, and Wanhua Chemical has a strong say in pricing.

Industry insiders predict that the price adjustment of Wanhua chemical, indicating that the domestic MDI price increase in the second quarter began, according to market supply and demand and MDI production enterprises equipment maintenance plan, MDI price trend is still more optimistic in the next period of time, polyurethane materials or there will be varying degrees of price increases, it is recommended that polyurethane related chemical products enterprises focus on.

Dow announces price increases for MDI and MDI system products

Dow announced price increases for MDI and MDI system products in all Europe, Middle East, Africa and India regions of up to €150 per ton, or equivalent in other currencies, effective April 1, 2019, or as allowed by the contract.

The company said in a statement released on March 29 that the decision was driven by profit compression in its MDI and MDI system product chain. The company further explained that in the past few months, the raw materials used in the production of MDI and MDI system products have experienced significant price increases, while pricing has come under pressure in the key market segments Dow offers, including energy efficiency and the construction, industrial and consumer markets.

A new round of rising prices of chemical raw materials is coming!

After the Jiangsu Xiangshui explosion, Jiangsu Province subsequently issued the "Jiangsu Chemical Industry Improvement Plan (Draft for Comments)", the explosion point of the document is that by the end of 2020, the number of chemical enterprises in the province is reduced to 2,000, and by the end of 2022, the data of chemical enterprises is controlled to less than 1,000. And required to carry out a comprehensive evaluation of the province's 50 chemical parks, according to the evaluation results, reduced to about 20, which is a bolt from the blue for the chemical industry.

According to incomplete statistics, the total number of chemical enterprises in Jiangsu Province is more than 7400, if according to the "Jiangsu Province chemical industry improvement plan (draft for comments)" document stated, the final retention of only 1000 chemical enterprises, which means that there will be 6400 will face closure, before this, Jiangsu Province has closed 7,000 chemical enterprises. The intensity of the closure is also unprecedented.

In addition, thousands of enterprises in seven regions, including Henan Province, Jinhua City, Yancheng City, Suzhou City, Suqian City, Weifang City and Dongguan City, have implemented the stop-production policy.

With the vigorous rectification of the chemical industry, many small and medium-sized chemical enterprises are facing the crisis of withdrawing from the market, and large enterprises have begun to stop production and maintenance. This phenomenon will further accelerate the rise in the price of chemical raw materials, and the price of domestic chemical raw materials will remain high for a long time in the future.

The following lists the extent of the increase in the market quotation of several raw materials

Regarding the market trend, some insiders believe that:

The explosion of a chemical enterprise, its impact is limited after all, do not have to worry about the problem of "no rice pot", not to mention in a long time, China's chemical industry is overcapacity, due to the accident set off non-compliant enterprises, chemical park shut down tide should have come earlier, higher safety and environmental protection threshold, is conducive to fat chemical industry slim down for a long time. In addition, from the macro perspective, oil and downstream petroleum products do not have a rising demand premise, which can also be confirmed from the recent data analysis of domestic and foreign economic trends.

It is inevitable that some enterprises, especially those with a certain market monopoly position, take some unexpected events as an opportunity to set off a price wave, and whether the price rise can be sustained depends on the supply and demand of the market.