Soaring Prices: High-boiling Aromatic solvents Stand Out This Week
Domestic high-boiling aromatic solvents saw drastic market changes this week. Their prices surged sharply, with a general increase of 8% to 11%. Some high-end grades such as SA-1800 posted a daily price hike of over 3%, ending the previous stable market trend.
As of March 6, the average price of 1000# stood at 5,956 yuan per ton, up 8.29% month-on-month. The average price of 1500# reached 6,010 yuan per ton, rising 11.53% month-on-month. The average price of 1800# was 5,583 yuan per ton, with a month-on-month increase of 9.84%.
The sharp price rise of high-boiling aromatic solvents was driven by multiple factors. Strong cost transmission, concentrated demand release and market sentiment worked together to push prices up rapidly.
Cost Side
The production of high-boiling aromatic solvents mainly relies on the crude oil industrial chain. Crude oil price swings and tight raw material supply directly affect production costs. International crude oil prices rallied strongly this week. As of the 4th, Brent crude oil futures rose 7.64% for the week and closed at 81.4 US dollars per barrel. Escalating geopolitical risks pushed the crude oil price volatility rate to 20%. Rising upstream costs kept passing down to downstream chemical products.
C10 crude aromatics are the core raw material for these solvents. They are mainly by-products of catalytic reforming and ethylene cracking units. Major domestic refineries have operated at low output recently. Firmly rising raw material prices lifted costs for manufacturers, and the cost transmission effect became more obvious than in previous years.
Demand Side
Strong demand mainly pushed prices higher. Demand from old and new industries upset the original supply and demand balance.
Traditional businesses have fully resumed work. Factories making industrial coatings and ink are now in their busy season. High-boiling aromatic solvents are essential materials here. Buyers increased regular orders sharply. Pesticide and rubber producers also raised output. They bought large amounts to replenish stocks. This made market demand even stronger.
New industries also needed more of these solvents. They are used for new energy battery coolants and semiconductor cleaners. More lithium batteries were produced. Some types of aromatic solvents sold much better. Battery companies bought goods in bulk. Some high-end products fell short in supply, so their prices rose faster.
Semiconductor factories expanded production. They needed more electronic-grade high-boiling aromatic solvents. High-end products became even harder to get. Their prices went up. This also lifted prices across the whole market.
Market Outlook
In the short term, prices of high-boiling aromatic solvents will stay strong, yet the growth rate will gradually slow down. In the long run, market trends will depend on crude oil fluctuations, raw material supply recovery and demand changes. The overall market will see strong short-term performance and stable long-term performance.
In the short run, crude oil prices will fluctuate at high levels. Geopolitical risks remain, so tight supply will not ease soon. Cost support will stay solid. Regular demand from coatings, pesticides and other traditional sectors remains steady, and demand from emerging industries keeps growing. Market supply is still tight due to sellers’ reluctance to release goods. Prices may edge up slightly in the near term. However, downstream stockpiling will finish soon and panic buying will fade. The price growth will narrow, and regional prices will gradually stabilize next week.
In the long run, raw material supply and new domestic production capacity will increase, easing the supply shortage. Demand growth in traditional sectors will slow down. Demand from emerging industries will rise at a steady pace and can no longer sustain sharp price increases. Tighter environmental regulations will drive industrial upgrading. Alternatives such as bio-based solvents will see faster commercialization and cap price growth.
Overall, prices of high-boiling aromatic solvents will return to a reasonable range and fluctuate steadily. Different grades will show divergent trends. High-end grades may stay at high levels supported by steady demand. Mid and low-end grades may see slight price drops due to excess production capacity.