Trichloroethylene

1. **Price Trends** - **Domestic Market**: The mainstream price range for trichloroethylene is 6,800-7,200 RMB/ton, an increase of approximately 3%-5% compared to the previous month. Price increases in the East China and South China regions are slightly higher than in North China. - **International Market**: FOB China main port prices remain stable at USD 950-1,000/ton, while CFR Southeast Asia prices are maintained at USD 1,020-1,050/ton. Export orders support firm pricing.2. **Supply Side Situation** - **Capacity Utilization**: The overall domestic operating rate is approximately 75%, a 5 percentage point increase month-on-month. However, some enterprises maintain low-load operations due to environmental production restrictions or equipment maintenance. - **Inventory Levels**: Manufacturer inventories are at low levels, social inventory turnover has accelerated, and sentiment among traders is trending towards holding back sales. - **New Capacity**: No new facilities have been put into operation, resulting in limited short-term supply increments.3. **Demand Side Situation** - **Downstream Industries**: - **Refrigerants**: Demand for models such as R134a has entered the peak season, with procurement volumes for trichloroethylene increasing by 10%-15% month-on-month. - **Metal Cleaning**: Demand in the automotive and electronics industries remains stable, but the operation of some small enterprises is restricted due to environmental policies. - **Solvent Sector**: Demand is driven by the growth of export orders, but competition from high-end solvent substitutes has intensified. - **Regional Differences**: Demand in East China and South China is stronger than in North China, primarily due to the concentration of export orders.4. **Costs and Profits** - **Raw Material Prices**: Calcium carbide prices have slightly risen to 3,200-3,400 RMB/ton, while liquid chlorine prices fluctuate in the range of 200-400 RMB/ton, strengthening cost support. - **Production Profits**: The average gross profit margin for the industry is approximately 500-800 RMB/ton, a 10% increase month-on-month, resulting in high production enthusiasm among enterprises.5. **Policy and Environmental Protection** - Environmental supervision has become stricter, with some enterprises facing production restrictions due to non-compliant exhaust emissions, strengthening expectations of supply-side contraction. - Export tax rebate policies remain stable, boosting enterprises' export enthusiasm, but rising shipping costs are compressing profit margins.6. **Impact of Related Products** - **Substitutes**: Tetrachloroethylene prices are running high, leading some downstream users to switch to purchasing trichloroethylene, forming demand support. - **Competitors**: Prices for dichloromethane and chloroform are weak, but their application areas have low overlap with trichloroethylene, resulting in limited impact.Analysis and Judgment1. **Short-term Driving Factors**: - The supply side is affected by environmental production restrictions, combined with low inventory levels, supporting upward price movement. - The arrival of the peak season for the refrigerant industry, coupled with the growth of export orders, results in strong demand-side performance. - Rising calcium carbide prices further push up production costs.2. **Risk Points**: - Downstream acceptance of high prices is limited; if demand fails to keep up, price increases may be constrained. - Exceedingly strict enforcement of environmental policies may lead to further supply contraction, but could also trigger panic restocking on the demand side.Forecast1. **Price Trends**: - Short-term (1-2 weeks): Prices will maintain high-level fluctuations, with mainstream quotes potentially breaking through 7,200 RMB/ton. Export FOB prices are expected to probe the USD 1,050/ton level. - Medium-term (1-2 months): If demand remains strong and there is no significant supply increment, prices may further rise to 7,500-7,800 RMB/ton, but caution is needed regarding rising resistance from downstream users.2. **Supply-Demand Balance**: - Supply Side: Environmental production restrictions may continue through Q4, making it difficult to change the tight supply situation before new capacity is deployed. - Demand Side: Peak season demand in the refrigerant industry will continue until October, while demand in the metal cleaning sector may face pressure due to environmental policies.3. **Operational Recommendations**: - Production Enterprises: It is advisable to appropriately increase inventory levels to lock in profits. Monitor environmental policy developments and flexibly adjust operating rates. - Traders: Avoid chasing high prices; it is recommended to sell in batches. Monitor the pace of downstream restocking to avoid hoarding. - Downstream Users: Focus on procurement based on actual needs, and appropriately increase safety inventory. Monitor changes in substitute product prices to optimize procurement strategies.