Introduction
In
the first half of 2022, despite the pressure of new capacity expansion,
the EVA market is full of resilience and the price shows an upward
trend. The high price of upstream crude oil, at the same time, the performance
of photovoltaic demand exceeded expectations, and EVA enterprises
increased the production of photovoltaic grade EVA, thus reducing the
pressure on the market circulation. All these are important factors
supporting the further upward shift of EVA price focus in 2022. In the second half of the year, the expansion speed of EVA production
capacity was further accelerated, and the peak season of terminal "gold,
nine silver and ten" demand also gave the market more expectations, and
the supply and demand game continued to upgrade. The market influence factors are colorful and complex. Where is the price of EVA? This article will mainly analyze the price trend changes and driving
factors in the first half of the year, and predict the price trend and
important concerns in the second half of the year.
Price: EVA breaks through the haze and the price center continues to move upward
In
the first half of 2022, despite the pressure of new capacity expansion,
the EVA market is full of resilience and the price shows an upward
trend. In
the first half of the year, the overall EVA price showed a rise first
and then a decline. From January to may, the price fluctuated higher,
and fell slightly in June. The average EVA price was 23142 yuan / ton, up 18.26% year on year. The
lowest point was 17700 yuan / ton in early January and the highest
point was 27000 yuan / ton in early May. After the Spring Festival, with the rapid rise of crude oil prices, EVA
production costs rose rapidly. At the same time, photovoltaic demand
started earlier than expected, the operators were optimistic, and the
market supply was tight. EVA prices rose all the way.
In
the second quarter, the demand of foam, hot melt adhesive and other
industries was slightly weakened, but the demand for photovoltaic
materials was still relatively strong. The production of photovoltaic
materials of EVA manufacturers was highly motivated, and the supply of
other goods remained tight. In addition, the import was restricted and
the supply and demand of EVA market was obviously unbalanced. From April
to may, a wave of "off-season not light" market emerged, and the high
price of EVA was supported. However, since June, under the influence of the Federal Reserve's
interest rate increase, the bulk commodities have been under pressure as
a whole, and the mentality of EVA operators has weakened. At the same
time, with the gradual release of inventories in some ports in East
China, the import supply has returned to the normal level. With the weakening of PV demand and the full release of goods held in
the port, the supply side of EVA market is under obvious pressure. The
end industry has entered the off-season of demand, and the EVA price is
under pressure.
Supply: the total supply has steadily increased, and domestic and imported ice and fire
Capacity and output both increased, photovoltaic EVA accounted for more than half
In
2022, the pace of EVA capacity expansion continued to accelerate. By
June 2022, the total capacity of China's EVA industry reached 1.922
million tons, an increase of 30.57% over the previous year. Among them, in December 2021, the 300000 ton tubular unit of Zhejiang
Petrochemical Company was put into production, in March 2022, the 100000
ton kettle type unit of scientific refining and chemical company was
put into production, and in March 2022, LianHong Petrochemical completed
the capacity expansion, from 100000 tons to 150000 tons. (Note: the next month after the stable production of the newly put into
operation units is included in the production capacity, so the
production capacity of the units put into operation in December 2021 of
Zhejiang Petrochemical is included in the calculation of 2022)
With
the expansion of production capacity, the domestic production of EVA
appeared from January to June 2022. The domestic production of EVA was
795900 tons, an increase of 389700 tons over the same period last year,
an increase of 95.93% over the same period last year. In the first half of 2022, although Lianhong petrochemical and Yangzi
Petrochemical have been shut down for a long time, the production of new
units of China Science and technology refining and Zhejiang
Petrochemical and the capacity expansion of LianHong Petrochemical still
show a substantial increase in EVA production in the first half of
2022.
From
the perspective of domestic production, PV grade EVA accounts for 53%,
up 15% year-on-year, and is the fastest growing source of EVA
production. In addition, the proportion of foam, cable and film materials
decreased, and the proportion of other sources of goods increased
slightly. According to statistics, from January to June of 2022, the output of
photovoltaic materials will be 420700 tons, with a year-on-year increase
of 174.02%, an increase of 53.69 percentage points over the same period
of last year, and the growth of photovoltaic materials will far exceed
the total growth of EVA. Thus, the domestic circulation of goods decreased year on year. This has also become an important factor that the pressure on the
supply side of EVA market is not obvious under the background of double
growth of production capacity and output.
Combined with multiple factors, EVA imports continued to decline in the first half of the year
From
January to may 2022, the accumulated EVA import volume was 442600 tons,
a decrease of 65200 tons over the same period of last year, a
year-on-year decrease of 12.84%, and the growth rate was 30.55
percentage points lower than the same period of last year. The main reason is that, on the one hand, new domestic production
capacity is released intensively, and importers reduce import volume to
avoid risks. The second reason is the shortage of shipping resources and the rise of freight. The third reason is that foreign businessmen increase the supply of
high equivalent regions in Southeast Asia and reduce the supply to
China. The import volume is expected to gradually return to normal in the
second half of the year, but the annual increase is expected to be
limited.
From
the perspective of import source countries, South Korea, Taiwan and
Thailand accounted for the top three in import volume, and Singapore and
Japan jumped into the top five in EVA import volume. South Korea has the largest increment, with a year-on-year increase of
12%, an increase of 12 percentage points over the same period of last
year, which is closely related to the conversion of 300000 tons of LD /
EVA new production capacity of Lotte and Hyundai to Eva.
Demand: PV boosts EVA terminal demand
From
January to may 2022, the accumulated apparent consumption was 1.0514
million tons, with a year-on-year increase of 31.23%, an increase of
21.05 percentage points over the same period last year. Since 2022, the trend of steady growth of EVA demand has remained
unchanged. Under the restriction of external environment haze, the
commencement of traditional EVA industry has declined in stages.
However, the total EVA demand in the first half of the year has
increased steadily, mainly driven by the new energy industry.
From
the perspective of the commencement of the terminal industry, the
commencement of the terminal industry in the first half of 2022 can be
described as a double heaven of ice and fire. However, the composite
commencement rate of EVA terminal is supported by the high-tech
industry, and is better than that of the same period last year. In the first half of the year, the production of terminal enterprises
was greatly affected by two aspects. First, due to the constraints of
the external environment, the logistics transportation in some areas was
limited, and some terminal enterprises stopped production. The second aspect is the high crude oil price and the rapid rise of EVA
price, which leads to the compression of profits of some enterprises
and thus affects demand.
From
the perspective of specific terminal industries, for traditional
industries, the commencement of enterprises is affected by the external
environment in stages, and the commencement rate decreases in stages. For some foreign trade enterprises, medium and long-term foreign trade
orders will be affected, especially in shoe materials and other
industries. The whole impact will run through the first half of the
year. However, on the optimistic side, due to the existence of 618 e-commerce
Festival, the boundary between off-season and peak season of some
industries such as shoe materials has been weakened. Especially under
the traditional off-season in the late second quarter, the production
time of enterprises has been delayed, and the commencement time is
better than that in the same period of last year. For the photovoltaic and other new energy industries, due to the delay
of some domestic photovoltaic projects in the second half of 2021 and
the increase in module exports caused by obvious export advantages, the
demand for EVA by photovoltaic in 2022 shows a good growth momentum. The
commencement of the film plant before May is higher than that of the
same period last year, which also supports the EVA terminal load
operation rate in the first half of the year to a certain extent.
In
recent years, the proportion of PV in the downstream consumption of EVA
has increased year by year. In 2021, the consumption proportion has
reached 37%, while the demand of foaming industry has reached 28%, and
the two accounts for more than 50%. The above factors have also become an important factor to pull the
composite operating rate of EVA terminals higher than that of the same
period last year.
Cost and profit: cost and profit both follow the Plateau oil path, and the cost advantage is weakened
In
the first half of 022, the EVA price showed a stepwise upward trend.
Affected by this, the enterprise's production profit showed a positive
trend. Under different paths, the overall EVA profit showed a trend of
first falling and then rising. The profit fluctuation showed an
irregular "V" trend, and the profit center moved upward. It is worth noting that the profitability of crude oil route EVA is
significantly lower than that of methanol route EVA due to the impact of
high oil price. Specifically:
Under
the oil production route in the first half of 2022, the average profit
of EVA is 11287 yuan / ton, an increase of 1971 yuan / ton over the same
period last year. The lowest point of profit appears in the first ten
days of February, the lowest is 7039 yuan / ton, the highest point
appears in the first ten days of May, the highest is 15273 yuan / ton,
the maximum fluctuation is 8234 yuan / ton, an increase of 5612 yuan /
ton over the same period last year. The cost of the production enterprise is 13339 yuan / ton, an increase
of 2884 yuan / ton or 27.58% over the average price in the first half of
2021. In the first half of the year, crude oil as a whole showed a fluctuating
upward trend. Compared with the same period last year, the overall
operating range moved upward, the cost of oil based EVA increased, and
the profit of producers fell, but the overall growth trend was still
present.
Under
the methanol route in the first half of 2022, the average profit of EVA
is 11492 yuan / ton, 3186 yuan / ton higher than that of the same
period last year. The lowest point of profit appears in the first ten
days of February, with the lowest of 5675.45 yuan / ton, and the highest
point appears in the first ten days of May, with the highest of
15909.45 yuan / ton. The maximum fluctuation range is 10234 yuan / ton,
7238.40 yuan / ton higher than that of the same period last year. The cost of production enterprises was 13028 yuan / ton, an increase of
1631 yuan / ton over the average price in the first half of last year,
an increase of 14.31%. In the first half of 2022, after the domestic methanol market surged
up, the overall price center increased compared with the same period of
last year, which was smoothly transmitted to methanol to EVA, and the
cost increased accordingly.
Forecast: the supply and demand game continues to upgrade, and the market in the peak season is still predictable
On
the supply side, in the second half of the year, new production
capacity such as Tianli hi tech, new unit of Gulei petrochemical and
capacity expansion of Ningbo Formosa Plastics will be put into
production. If the new production capacity can be put into production as
scheduled, it is expected that China's EVA production capacity will
reach 2.45 million tons in 2022, an increase of 66.44% over the previous
year, an increase of 15 percentage points over the previous year. The centralized release of new production capacity will inevitably have a certain impact on the market. At the same time, Taiwan's Formosa Plastics, Sibang and other
production enterprises all have the expectation of stopping for
maintenance. In the case that the price difference between LD and EVA is
too large, it is necessary to pay attention to the progress of
converting LD devices such as Daqing to Eva.
On
the demand side, the demand of the terminal industry in the third
quarter will be gradually better than that in the second quarter. The
arrival of the "golden nine silver ten" will give the market some
support. In general, it is expected that the EVA market price in the third
quarter will be suppressed first and then increased, or go out of a
completely different trend from that in the second quarter. The market
turning point can focus on the market performance after the middle of
August. At the same time, we need to pay close attention to the trend of photovoltaic demand in the second half of the year. In 2022, the global PV installed capacity is expected to be 190-240gw,
and the Chinese PV installed capacity is expected to be 75-90gw. The
corresponding PV grade EVA demand may exceed 1.2 million tons, which
will greatly relieve the pressure brought by the new capacity.
In
general, the demand of EVA terminal industry in the second half of the
year may be stronger than that in the first half of the year, especially
in the peak season of "golden nine silver ten" terminal demand, which
may provide good support to the market. However, we should also pay close attention to the impact of the Fed's interest rate increase on commodities. At the same time, in the second half of the year, we need to pay
attention to the impact of the new EVA production capacity of Tianli hi
tech and Gulei on the EVA supply side. It is preliminarily predicted that EVA prices may rebound and readjust after falling in the second half of the year. EVA prices are expected to continue to decline since the third quarter.
The market turning point may be delayed after the "golden nine silver
ten" terminal demand peak season comes. If the photovoltaic demand is
later than expected, the market turning point may be delayed. In addition, at the end of the fourth quarter, we need to pay attention
to whether the EVA market is under pressure after the release of new
capacity.
