In the first half of the year, under the double pressure of sluggish downstream demand and limited cost support, the PU shoe sole liquid market as a whole operated weakly. According to the monitoring data of Jinlianchuang, as of June 30, the average price of sole liquid in the domestic East China market dropped from 18,000 yuan (ton price, the same below) at the beginning of the year to 16,750 yuan, a drop of 6.9%.
Jinlianchuang chemical analyst Yan Wei: The market is weak
PU sole solution is mainly used to produce polyurethane soles. Relevant information shows that Asia is a highly concentrated region of the global shoe industry, while China is the world's largest producer and consumer of shoe products, and is also the world's largest producer of PU sole solution. This year is the beginning of the market regaining confidence in the post-epidemic era, but the Chinese PU shoe sole solution market is showing a downward trend under the situation of limited cost and demand support.
The market in the first half of the year can be divided into two stages. The first is the stable stage from January 3rd to April 14th, when the average price of sole stock solution in East China was stable at 18,000 yuan. The second is the shocking downward stage from April 15th to June 30th. The market prices in East China were lowered three times on April 15th, May 9th, and June 1st, respectively, with a total reduction of 1,250 yuan to 16,750 yuan.
In the first half of the year, from the perspective of cost, the price trend of the main raw materials of PU shoe sole liquid was weak. Among them, the average price of pure diphenylmethane diisocyanate (MDI) in the first half of the year fell by 14.77% year-on-year, and adipic acid fell by 25.64%. 1,4-butanediol (BDO) fell by 53.93%, weak support for sole liquid. From the perspective of demand, statistics show that in the first five months of this year, the operating income of leather, fur, feather and its products and footwear enterprises above designated size nationwide was 299.09 billion yuan, a year-on-year decrease of 10.5%, and the total profit was 12.68 billion yuan, a year-on-year decrease. 10.6%, so demand support is also limited.
On the whole, the performance of the end market of shoe sole solution in the first half of the year was average, the follow-up of new orders was slow and scattered, and the factories mainly executed long-term orders. Under the situation of weak cost and demand, the domestic shoe sole liquid market is mainly in decline.
Shaojie Consulting-Consulting Research Institute Team: Insufficient demand follow-up
At the beginning of this year, the market was expecting rapid economic growth, but demand did not recover as quickly as expected.
In the first half of the year, the price of raw material for soles fell, mainly because the "long tail effect" brought about by the deterioration of demand in 2023 continued to ferment, and the balance sheet of enterprises was damaged and the repair process was slower. In 2023, there will be a large backlog of shoe materials in the downstream of the terminal, and manufacturers will face the pressure to actively reduce inventory. The start of work is sluggish, and the continuous order increase for sole stock solution is extremely limited. The price of sole stock solution will continue to drop under the drag of sluggish demand.
Domestic sole solution factories are mainly concentrated in Jiangsu, Zhejiang, Guangdong and other provinces in East China. In the first half of this year, the average monthly production capacity of sole solution was 950,000 tons. Among them, the main factories in East China started relatively stable in the first half of the year, maintaining an operating level of about 50%. However, the operating rate and capacity utilization rate of small and medium-sized shoe sole liquid enterprises were obviously insufficient. The average operating rate was only maintained at about 30%, mainly on-demand production. In the case of large manufacturers continuing to encroach on the market, the market share of small and medium-sized enterprises may continue to shrink in the future, and it is expected that the industry concentration will continue to increase.
According to the monitoring of Ratejie Consulting-Consulting Research Institute, Huafon Group ranks first in the country with a production capacity of 470,000 tons of polyurethane stock solution in the production capacity layout of shoe sole stock solutions in China this year, accounting for 38.53%. The production capacity of the six major domestic shoe sole solution companies, including Huafon Group, Asahikawa Chemical, Zhejiang Hengtaiyuan, Wuxi Shuangxiang, Yinuowei, and Huada Chemical, accounts for 76% of the entire industry's production capacity. Therefore, leading companies have extremely high bargaining power, and the main factories have relatively stable long-term orders from major customers.
Based on the interests of both the supply and demand sides, the frequent price changes of shoe sole solution is not conducive to the maintenance of customer relationship and large orders, so the price drop of shoe sole solution will be smaller than the change of downstream demand and raw materials.
Wu Lili, adipic acid analyst at Longzhong Information: limited cost support
Adipic acid is one of the main raw materials of shoe sole liquid. From the perspective of the supply side, the average capacity utilization rate of adipic acid in China in the first half of this year was 61.69%, an increase of 3.51% month-on-month; the output was 994,700 tons, an increase of 4.85% month-on-month, and the supply increased. From the perspective of demand, the main downstream industries of adipic acid are PA66 (nylon 66), PU slurry, shoe sole liquid and other products. In recent years, the increase of old-brand products such as PU slurry has been limited, and the overall customer scale has hardly increased; there are partial production plans for PA66 and degradable plastics, which are expected to drive the increase in overall consumption; however, the market in the first half of this year was affected by the weak economic environment. The overall operating level of the downstream of adipic acid fluctuates within a narrow range, and the increase in demand is limited.
In the first half of the year, the adipic acid market showed an "M" trend around supply and demand, with an average price of 9811.59 yuan, down 23.06% from the same period last year. There were two downturns, one was from early February to the end of March; the other was from early May to the end of June. The supply in the market increased, the trend of the raw material side was weak, and the terminal demand was insufficient to follow up. The focus of market trading Slope towards the bottom.
On the whole, the adipic acid market in the first half of the year was generally weak, and the support for sole liquid from the cost side was limited. (Wang Hongzhen)
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