One of the most important indicators of volatility in the Chinese chemical market is price volatility, which to some extent reflects the fluctuations in the value of chemical products. In this paper, we will compare the prices of major bulk chemicals in China over the past 15 years and briefly analyze the pattern of changes in long-term chemical prices.

First, look at the changes in the overall price level. According to the National Bureau of Statistics, China’s GDP has continued to show positive growth rates over the past 15 years, reflecting price fluctuations and inflation levels CPI has also shown a positive trend in value indices for most of the past 15 years.

Image Figure 1 Comparison of GDP and CPI year-over-year growth rates in China over the past 15 years

According to two economic indicators for China, both the size of the Chinese economy and the price level have grown significantly. The price changes of 58 bulk chemicals in China over the past 15 years were investigated and a price trend line graph and a compound growth rate change graph were developed. The following fluctuation patterns can be seen from the graphs.

1. Among the 58 bulk chemicals tracked, the prices of most of the products showed a weak fluctuation trend in the past 15 years, of which 31 chemicals’ prices fell in the past 15 years, accounting for 53% of the total statistical samples; the number of bulk chemicals increased accordingly by 27, accounting for 47%. Although macroeconomic and overall prices are rising, the prices of most chemicals have not followed, or even fallen. There are many reasons for this, besides the cost reduction brought by technological progress, there are also serious capacity growth, fierce competition, price control at the raw material end (crude oil, etc.), etc. Of course, the influencing factors and operation logic of livelihood prices and chemical prices are very different.

2. Among the 27 rising bulk chemicals, there are no products whose prices have increased by more than 5% in the past 15 years, and only 8 products have increased by more than 3%, among which sulfur and maleic anhydride products have increased the most. However, 10 products fell by more than 3%, significantly outweighing the rising products. In the past 15 years, the upward momentum of chemical prices is weaker than the downward momentum, and the weak atmosphere in the chemical market is relatively strong.

3. Although some chemical products are volatile in the long term, the chemical market has returned to normal since the post-epidemic era in 2021. In the absence of sudden industrial structure factors, the current market prices basically reflect the supply and demand situation of Chinese products.

From a volatility perspective, the overall volatility trend of China’s bulk chemical market has a negative correlation with economic growth, which is directly related to the imbalance in the supply and demand structure of China’s chemical market. With the development of the trend of scale in China’s chemical industry in recent years, the supply-demand relationship in many chemical markets has changed. Currently, there is an increasing imbalance in the product structure of the Chinese market.

After removing the inflation factor, most of China’s bulk chemical prices have fallen over the past 15 years, which is inconsistent with the direction of price fluctuations we are currently seeing. The current rise in China’s bulk chemical prices is more a reflection of inflationary factors than of value. The increase in inflation and the maintenance of weak market prices from the longer cycles of the past also largely reflect the shrinking value of many bulk commodities and the intensifying conflict between supply and demand in the chemical industry. Going forward, the Chinese chemical industry will continue to scale and Chinese commodity market prices are expected to remain weak and volatile for the longer cycle ahead through about 2025.

Chemwin is a chemical raw material trading company in China, located in Shanghai Pudong New Area, with a network of ports, terminals, airports and railroad transportation, and with chemical and hazardous chemical warehouses in Shanghai, Guangzhou, Jiangyin, Dalian and Ningbo Zhoushan, China, storing more than 50,000 tons of chemical raw materials all year round, with sufficient supply, welcome to purchase and inquire. chemwin email: service@skychemwin.com whatsapp: 19117288062 Tel: +86 4008620777 +86 19117288062