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Hydrogen Peroxide: Price Retreats After Speculative Surge
2023/5/30
In early May, the hydrogen peroxide market experienced a speculative surge due to unexpected events. By May 8th, the average price of 27.5% hydrogen peroxide in the domestic market reached 988 yuan per ton, hitting a new high for the year and increasing by 27.48% compared to the last working day before the May Day holiday. However, due to weak demand, hydrogen peroxide prices fell after reaching their peak. As of May 22nd, the benchmark price for 27.5% hydrogen peroxide in China was 966.67 yuan.
Sustained weak demand is the fundamental reason for the decline in hydrogen peroxide prices after the speculative rise. In early May, the downstream sectors such as caprolactam and paper manufacturing had poor performance, resulting in a low overall industry operating rate. Other downstream sectors also had weak demand, and there was strong resistance to the high prices of hydrogen peroxide as a raw material.
"After the May Day holiday, the operating rate of the caprolactam industry dropped to a new low for the year, fluctuating between 61% and 65%, a decrease of 7-8 percentage points compared to before the holiday. At the same time, the price of caprolactam continued its downward trend in early May. As of May 15th, the reference price for liquid caprolactam in East China was 12,400 to 12,500 yuan, a decrease of 300 yuan compared to the first working day after the holiday.
"The other downstream sectors, such as paper manufacturing, also continued to operate weakly. On May 15th, the average price of 250-400g white cardboard in the domestic market was 4,598 yuan, unchanged from the previous working day, and the market remained cautious. It is understood that trial paper production in Fujian will begin. It is expected that with the introduction of new paper, the competition in the white cardboard market will intensify, and prices may fluctuate."
In early May, downstream companies such as Fujian Yongrong Technology Co., Ltd. and Fujian Liansheng Paper Industry Co., Ltd. added new production capacity to the market. However, due to the fact that most of the new capacity was for self-use or had not yet reached full production, the demand for hydrogen peroxide in the paper industry was limited.
There were no bright spots in the downstream new energy sectors such as propylene oxide, ferric phosphate, and lithium carbonate. On May 15th, the mainstream negotiated price for propylene oxide in the Shandong market was 9,550 to 9,700 yuan ex-factory, with a downward price range. The price of ferric phosphate remained weak and stable, with a mainstream price of 13,000 yuan. The price of lithium carbonate remained stable recently, and the overall market sentiment remained cautious.
Overall, the supply of hydrogen peroxide remained sufficient. In May, the operating rate of hydrogen peroxide companies reached a bottom after a deep decline. Although nearly 2 million tons/year of hydrogen peroxide capacity in Shandong is still under maintenance, supplies from Henan, Anhui, Jiangsu, and other regions have quickly replenished, ensuring an overall abundant market supply.
"As of mid-May, the overall operating rate of hydrogen peroxide companies in the country was 65.01%, a decrease of 7.68 percentage points compared to April 30th. Although the industry's operating rate remained low, some supporting facilities (such as propylene oxide companies) temporarily sold hydrogen peroxide externally, ensuring overall abundant market supply and a relaxed supply-side situation."
"In the second half of May, some hydrogen peroxide units were expected to complete maintenance. On
May 14th, the 260,000 tons/year hydrogen peroxide unit of Hunan (Hengyang) Jiantao Industrial Co., Ltd. was restarted. The 150,000 tons/year hydrogen peroxide unit of Sichuan Jiangyou Wanli Chemical Co., Ltd., and the 170,000 tons/year hydrogen peroxide unit of Shandong Jinmei Mingshui Chemical Group Co., Ltd. are expected to be restarted soon, increasing the market supply expectations."
"In the second half of May, in addition to the mentioned units, the hydrogen peroxide units of Tianjin Bohua Chemical Development Co., Ltd., Shandong Binhua Dongrui Chemical Co., Ltd., and other maintenance companies were expected to restart or increase production, involving a capacity of 1.04 million tons/year. The planned maintenance of Dezhou Shihua Chemical Co., Ltd. and other units involves a hydrogen peroxide capacity of about 150,000 tons/year. Without considering other unplanned unit shutdowns, it is expected that hydrogen peroxide supply will increase significantly in late May."
Market trading was light due to the poor performance of the main downstream sectors of hydrogen peroxide, putting pressure on the support for hydrogen peroxide as a raw material. Additionally, due to the expectation of increased short-term supply of hydrogen peroxide, the market remained rational, and prices weakened after the speculative rise.
"On May 15th, the prices of hydrogen peroxide in many domestic markets were adjusted downward. The average price of 27.5% hydrogen peroxide nationwide was 949 yuan, a 3% decrease from the 12th. Among them, the largest price drop was in the Shandong market, with an average price of 949 yuan for 27.5% hydrogen peroxide, a decrease of 7.89% from the 12th. The price of 27.5% hydrogen peroxide in the Southwest region remained stable at 950 yuan."
"Entering mid-May, with increased circulation of supplies between the north and south, the tight supply situation in the northern market was alleviated to a large extent. The price of hydrogen peroxide in the southern market fell first, and low-priced supplies moved aggressively to the north, impacting the northern market and shifting the focus of transactions downward."
Currently, the operating level of hydrogen peroxide units in Anhui is high, but the demand is weak, leading to light trading and flexible transactions. In Jiangsu, the receiving price for hydrogen peroxide has decreased, and in Zhejiang, high-priced hydrogen peroxide is difficult to trade, resulting in a cautious sentiment in the mid-to-downstream sectors. In South China, the impact of low-priced external supplies has led to a downward trend in the trading focus of concentrated hydrogen peroxide products, and inventory levels are under pressure. In the Hubei and Hunan regions, the prices of hydrogen peroxide orders are low, new offers are weakening, and the operating rate of concentrated units is increasing. In Central China, the demand for hydrogen peroxide from Henan's paper mills is weak, and there is a significant price difference in transaction ranges. In the Southwest region, there is an expectation of increased supply of hydrogen peroxide, and the trading focus is temporarily stable.
"Currently, the market trading of hydrogen peroxide is light, and the range of light trading has expanded. The mid-to-downstream sectors mainly focus on digesting previous orders, and prices in many regions are shifting downward. It is expected that the price of hydrogen peroxide will stabilize and weaken in the short term."
Sustained weak demand is the fundamental reason for the decline in hydrogen peroxide prices after the speculative rise. In early May, the downstream sectors such as caprolactam and paper manufacturing had poor performance, resulting in a low overall industry operating rate. Other downstream sectors also had weak demand, and there was strong resistance to the high prices of hydrogen peroxide as a raw material.
"After the May Day holiday, the operating rate of the caprolactam industry dropped to a new low for the year, fluctuating between 61% and 65%, a decrease of 7-8 percentage points compared to before the holiday. At the same time, the price of caprolactam continued its downward trend in early May. As of May 15th, the reference price for liquid caprolactam in East China was 12,400 to 12,500 yuan, a decrease of 300 yuan compared to the first working day after the holiday.
"The other downstream sectors, such as paper manufacturing, also continued to operate weakly. On May 15th, the average price of 250-400g white cardboard in the domestic market was 4,598 yuan, unchanged from the previous working day, and the market remained cautious. It is understood that trial paper production in Fujian will begin. It is expected that with the introduction of new paper, the competition in the white cardboard market will intensify, and prices may fluctuate."
In early May, downstream companies such as Fujian Yongrong Technology Co., Ltd. and Fujian Liansheng Paper Industry Co., Ltd. added new production capacity to the market. However, due to the fact that most of the new capacity was for self-use or had not yet reached full production, the demand for hydrogen peroxide in the paper industry was limited.
There were no bright spots in the downstream new energy sectors such as propylene oxide, ferric phosphate, and lithium carbonate. On May 15th, the mainstream negotiated price for propylene oxide in the Shandong market was 9,550 to 9,700 yuan ex-factory, with a downward price range. The price of ferric phosphate remained weak and stable, with a mainstream price of 13,000 yuan. The price of lithium carbonate remained stable recently, and the overall market sentiment remained cautious.
Overall, the supply of hydrogen peroxide remained sufficient. In May, the operating rate of hydrogen peroxide companies reached a bottom after a deep decline. Although nearly 2 million tons/year of hydrogen peroxide capacity in Shandong is still under maintenance, supplies from Henan, Anhui, Jiangsu, and other regions have quickly replenished, ensuring an overall abundant market supply.
"As of mid-May, the overall operating rate of hydrogen peroxide companies in the country was 65.01%, a decrease of 7.68 percentage points compared to April 30th. Although the industry's operating rate remained low, some supporting facilities (such as propylene oxide companies) temporarily sold hydrogen peroxide externally, ensuring overall abundant market supply and a relaxed supply-side situation."
"In the second half of May, some hydrogen peroxide units were expected to complete maintenance. On
May 14th, the 260,000 tons/year hydrogen peroxide unit of Hunan (Hengyang) Jiantao Industrial Co., Ltd. was restarted. The 150,000 tons/year hydrogen peroxide unit of Sichuan Jiangyou Wanli Chemical Co., Ltd., and the 170,000 tons/year hydrogen peroxide unit of Shandong Jinmei Mingshui Chemical Group Co., Ltd. are expected to be restarted soon, increasing the market supply expectations."
"In the second half of May, in addition to the mentioned units, the hydrogen peroxide units of Tianjin Bohua Chemical Development Co., Ltd., Shandong Binhua Dongrui Chemical Co., Ltd., and other maintenance companies were expected to restart or increase production, involving a capacity of 1.04 million tons/year. The planned maintenance of Dezhou Shihua Chemical Co., Ltd. and other units involves a hydrogen peroxide capacity of about 150,000 tons/year. Without considering other unplanned unit shutdowns, it is expected that hydrogen peroxide supply will increase significantly in late May."
Market trading was light due to the poor performance of the main downstream sectors of hydrogen peroxide, putting pressure on the support for hydrogen peroxide as a raw material. Additionally, due to the expectation of increased short-term supply of hydrogen peroxide, the market remained rational, and prices weakened after the speculative rise.
"On May 15th, the prices of hydrogen peroxide in many domestic markets were adjusted downward. The average price of 27.5% hydrogen peroxide nationwide was 949 yuan, a 3% decrease from the 12th. Among them, the largest price drop was in the Shandong market, with an average price of 949 yuan for 27.5% hydrogen peroxide, a decrease of 7.89% from the 12th. The price of 27.5% hydrogen peroxide in the Southwest region remained stable at 950 yuan."
"Entering mid-May, with increased circulation of supplies between the north and south, the tight supply situation in the northern market was alleviated to a large extent. The price of hydrogen peroxide in the southern market fell first, and low-priced supplies moved aggressively to the north, impacting the northern market and shifting the focus of transactions downward."
Currently, the operating level of hydrogen peroxide units in Anhui is high, but the demand is weak, leading to light trading and flexible transactions. In Jiangsu, the receiving price for hydrogen peroxide has decreased, and in Zhejiang, high-priced hydrogen peroxide is difficult to trade, resulting in a cautious sentiment in the mid-to-downstream sectors. In South China, the impact of low-priced external supplies has led to a downward trend in the trading focus of concentrated hydrogen peroxide products, and inventory levels are under pressure. In the Hubei and Hunan regions, the prices of hydrogen peroxide orders are low, new offers are weakening, and the operating rate of concentrated units is increasing. In Central China, the demand for hydrogen peroxide from Henan's paper mills is weak, and there is a significant price difference in transaction ranges. In the Southwest region, there is an expectation of increased supply of hydrogen peroxide, and the trading focus is temporarily stable.
"Currently, the market trading of hydrogen peroxide is light, and the range of light trading has expanded. The mid-to-downstream sectors mainly focus on digesting previous orders, and prices in many regions are shifting downward. It is expected that the price of hydrogen peroxide will stabilize and weaken in the short term."
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