What factors affect the market of chemical factories?
The market for chemical factories is mainly influenced by the following factors:
Market demand fluctuations
The active period of industrial manufacturing will significantly increase the demand for petrochemical products, while the economic downturn or reduced infrastructure investment during the epidemic will suppress demand. For example, the consumption of products such as plastics and chemical fibers is strongly correlated with the economic cycle.
Fluctuations in raw material costs
The international crude oil price is severely affected by the policies of oil producing countries and unexpected events (such as the Russia Ukraine situation). In 2024, the WTI crude oil futures price fell to an abnormal level of -37.63 US dollars per barrel, directly leading to a surge in production costs or losses for chemical companies.
Policy and regulatory constraints
The upgrade of environmental inspection forces enterprises to upgrade their purification devices, otherwise they may lose their order qualifications; The pricing mechanism for refined oil products restricts the fluctuation of sales prices, and some products cannot be freely auctioned due to policy restrictions, directly affecting profit margins.
International trade environment
Trade barriers such as tariffs between China and the United States, as well as carbon reduction regulations in Europe, have weakened export competitiveness. In 2024, the export volume of chemical products decreased by 1.7% year-on-year, and intensified competition for homogeneous products has led to a decline in international market share.
Contradiction in production capacity structure
The policy of phasing out outdated production capacity promotes the transformation of enterprises, but the high cost of transformation (such as the huge amount of funds required for the transformation of coal chemical factories) has led to an imbalance in supply and demand matching, and some enterprises have been forced to shut down or reduce production.
Inventory management risk
Petrochemical products are prone to wear and tear and deterioration, requiring accurate judgment of inventory cycles. During periods of severe price fluctuations, inventory management errors may lead to cash flow crises, and some companies may fall into debt difficulties due to incorrect judgment of the timing of inventory construction.
