Hypromellose

I. Market Dynamics Intelligence
1. **Price Trends**
- Recent prices for Hydroxypropyl Methylcellulose (HPMC) have shown a steady upward trend. Price increases vary across different specifications, with lower-viscosity products experiencing relatively modest gains of 2% - 3%, while mid- to high-viscosity products have seen more significant increases of 5% - 8%.
- In major domestic production regions such as Shandong and Hebei, HPMC ex-factory prices have generally been raised. For example, in Shandong, the price of low-viscosity HPMC has risen from RMB 18,000 - 19,000 per ton to RMB 18,500 - 19,500 per ton, while the price of mid- to high-viscosity products has increased from RMB 22,000 - 23,000 per ton to RMB 23,000 - 24,500 per ton.

2. **Supply Situation**
- The operating rate of some production enterprises has declined due to environmental inspections and equipment maintenance, leading to a reduction in market supply. According to incomplete statistics, the overall domestic HPMC operating rate has recently dropped to 70% - 75%, a decrease of 5 - 8 percentage points compared to the previous month.
- Tight raw material supply is also a key factor affecting production. The main raw materials for HPMC are refined cotton and propylene oxide. Recently, refined cotton prices have continued to rise with unstable supply, while the propylene oxide market remains tight with significant price volatility, further constraining HPMC production.

3. **Demand Situation**
- The construction industry is the primary consumer of HPMC. With the gradual recovery of the real estate market and an increase in the number of construction projects initiated, demand for HPMC has risen significantly. In particular, demand has surged in construction processes such as exterior wall insulation and tile adhesion, where HPMC serves as a crucial additive.
- Demand for HPMC in the pharmaceutical and food industries has also maintained stable growth. As public attention to health and food safety continues to rise, market demand for pharmaceutical- and food-grade HPMC keeps expanding.

4. **Import and Export Situation**
- On the import side, domestic demand for high-end HPMC products still relies on imports. Recent import volumes have increased, but affected by international market price fluctuations and rising transportation costs, the prices of imported products have also risen.
- On the export side, China's HPMC maintains a certain degree of competitiveness in the international market, with export volumes remaining stable. However, due to slow economic recovery in some overseas regions, market demand growth is limited, resulting in relatively modest increases in export prices.

II. Analysis and Judgment
1. **Causes of Price Increases**
- Reduced supply is the primary driver of price increases. The decline in operating rates and tight raw material supply have led to insufficient market supply, while demand continues to grow. This supply-demand imbalance has pushed prices up.
- Rising raw material costs have also supported HPMC prices. Increases in the prices of refined cotton and propylene oxide have raised production costs, prompting enterprises to raise product prices to maintain profit margins.

2. **Impact of Various Factors**
- Supply factors have a more direct and significant impact on prices. The decline in operating rates and tight raw material supply have directly reduced market supply, triggering price increases.
- Although demand factors also contribute to price increases, their impact is relatively indirect compared to supply factors. The recovery of the construction industry and growing demand in the pharmaceutical and food sectors have provided some momentum for price increases, but under conditions of supply tightness, the role of demand is relatively weaker.
- Import and export factors have a relatively minor impact on domestic market prices. Although import volumes have increased, the higher prices of imported products limit their impact on the domestic market. Stable export volumes have had little effect on the domestic supply-demand balance.

III. Forecasts
1. **Price Trend Forecast**
- In the short term, HPMC prices are expected to continue rising. The supply shortage is unlikely to be alleviated quickly, while demand is projected to keep growing, further driving prices up. Low-viscosity product prices are expected to increase by another 2% - 3%, while mid- to high-viscosity product prices may rise by 3% - 5%.
- In the medium to long term, as environmental inspections conclude and equipment maintenance is completed, operating rates are expected to gradually recover, increasing market supply. Meanwhile, the upward trend in raw material prices may slow down, which will help curb HPMC price increases. However, considering the sustained growth in downstream demand from sectors such as construction, HPMC prices are expected to remain at a high level with relatively small fluctuations.

2. **Market Supply and Demand Forecast**
- On the supply side, although operating rates are expected to recover in the coming period, increased environmental requirements and uncertainty in raw material supply may limit the growth in supply volume. Market supply is projected to increase gradually but will likely remain insufficient to meet growing demand.
- On the demand side, the construction industry is expected to maintain its growth trend, leading to continued increases in HPMC demand. Demand in the pharmaceutical and food industries is also expected to rise steadily, providing support for the HPMC market. Overall, market demand will remain robust, and the supply-demand contradiction is unlikely to be fundamentally resolved in the short term.