SunSirs: Weak Demand Leads to a Decline in China POM Market

Last week, the domestic POM market was negative, with a significant drop in spot prices. According to the Commodity Market Analysis System of SunSirs, as of March 29th, the mixed price of domestic POM was 13,275 RMB/ton, a decrease of -1.67% from the price level at the beginning of the month.

Last week, the price of formaldehyde in the Shandong region increased. The raw material methanol market is on the rise, and the price of formaldehyde is basically following the changes in methanol. Downstream demand is maintained, and the purchasing sentiment is still good. Formaldehyde manufacturers are actively shipping, traders are following the market, actively trying to report high prices, and overall support for POM costs is strengthening.

In terms of supply: Last week, the operating rate of domestic POM enterprises decreased from a high level, and the overall load rate rebounded to around 89%. However, the inventory position of most enterprises is still rising, and the situation of accumulated inventory is spreading. Manufacturers are uniformly lowering their factory prices. Overall, there has been a significant increase in supply pressure, and the supply side's support for POM spot goods has weakened.

In terms of demand: Recently, the stocking situation of domestic POM downstream enterprises has been average, and most of them just need to pick up the goods. In the early stage, the price of POM remained stagnant at a high level, and buyers had some resistance. Last week, approaching the weekend, the traders lowered prices and completed the task of placing orders. However, the demand side's entry is lagging behind, coupled with holiday arrangements at the beginning of next month, which weakens the expectation of POM consumption. Overall, the demand side's support for POM spot prices is not good.

The POM market fell last week. The high operating rate of domestic aggregation plants has rebounded, the inventory position of enterprises has risen, the supply of goods has begun to accumulate, and the pressure on the supply side has rapidly increased. Manufacturers have uniformly lowered their pricing operations. Downstream enterprises have poor procurement and delayed stock preparation follow-up. It is expected that the POM market in the future may continue to decline due to the dual negative effects of supply and demand.

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