In March, the incremental demand in the domestic environment C market was limited, making it difficult to meet the expectations of the industry. In the middle of this month, downstream enterprises just needed to stock up, with a long consumption cycle, and the market purchasing atmosphere remains sluggish. Although there are frequent fluctuations in the equipment at the supply end of the third ring, there are endless messages of load reduction, maintenance, and parking. Although manufacturers have a relatively high willingness to stand up, it is still difficult to support the continuous decline of the C market. So far, the price of EPDM has dropped from 10900-11000 yuan/ton at the beginning of the month to 9800-9900 yuan/ton, once again falling below the 10000 yuan mark. So, do you think the market bottomed out or continued to decline in April?

Supply side: recovery of Yida, Shida, and Zhonghai units; Hongbaoli and Jishen are still parked; Zhenhai Phase I and Binhua continued to undergo major repairs, while Yida and Satellite increased their burden, with supply increments being the main factor.
Main demand parties of downstream polyether:
1.The soft foam industry is not growing well and has limited support for polyurethane raw materials
As the main downstream application market of the upholstered furniture industry, real estate has a significant impact on the upholstered furniture industry. According to sales data, the sales area of commercial housing nationwide in January and February decreased by 3.6% year-on-year, while the amount decreased by 0.1% year-on-year, up 27.9% and 27.6% respectively compared to December. From the perspective of construction progress, the area of newly started, constructed, and completed buildings decreased by 9.4%, 4.4%, and 8.0% year-on-year, respectively, 30.0, 2.8, and 23 percentage points higher than in December, indicating a significant recovery in new construction and completed buildings. Overall, the real estate industry has improved, but there is still a mismatch between consumer demand and the supply of real estate enterprises, market confidence is still not strong enough, and the recovery progress is slow. In general, the domestic demand driving effect of upholstered furniture is limited, and factors such as weak overseas demand and exchange rate fluctuations have limited furniture exports.
In terms of automobiles, in February, the production and sales of automobiles respectively reached 2032000 and 1.976 million units, with a year-on-year increase of 27.5% and 19.8%, and a year-on-year increase of 11.9% and 13.5%, respectively. Due to the fact that the same period last year and January this year are both Spring Festival months, with a relatively low base, demand is relatively good under the influence of promotional spending and price reduction policies of automobile enterprises in February. Since Tesla announced the price reduction at the beginning of the year, the recent price war in the automotive market has intensified, and the “price reduction tide” of automobiles has escalated again! In early March, Hubei Citroen C6 plummeted by 90000 yuan, making it a hot search. Major wave of price cuts have emerged in endlessly. Many mainstream joint venture brands have also introduced a “buy one get one free” preferential policy. The Chengdu Volvo XC60 also gave a record low price of 150000 yuan, once again pushing this round of price reduction to a climax. Up to now, nearly 100 models have joined the price war, with fuel vehicles, new energy vehicles, independent, joint venture, sole proprietorship and other brands participating, with price reductions ranging from several thousand yuan to several hundred thousand yuan. The recovery of short-term demand is limited, and industry confidence is difficult to establish. The fear of risk aversion and potential decline still exists. Upstream polyurethane raw material factories have limited orders.
2. The rigid foam industry has slow inventory consumption and low enthusiasm for purchasing polyurethane raw materials
In the first quarter, the operation of the cold industry was still not optimistic. Affected by the Spring Festival holiday and the early epidemic, the domestic market’s sales and shipments in the factory have declined, among which the domestic sales and shipments of commercial products have declined significantly, but the performance of the terminal home is not satisfactory: the overseas market still faces the Russia-Ukraine conflict and inflation problems, food prices have risen, while the real income of residents has shrunk, and the intensification of the cost of living crisis has also curbed the demand for refrigerators to a certain extent, Exports continued to decline. Recently, shipments from refrigerator and freezer manufacturers have warmed up, increasing the speed of finished product inventory consumption. However, the procurement demand for raw materials such as rigid foam polyether and polymeric MDI is temporarily slow; Delay in plate materials and piping;
Overall, it is expected that there is still room for downward adjustment in April, with fluctuations expected in the range of 9000-9500 yuan/ton, with a focus on dynamic changes in equipment and recovery of downstream demand.