External supply and demand in bad scenario

As both upstream and downstream industries perform waned, CPL market was not ruled out. In addition, since mid-May, there have been a series of negative macro factors affecting the market, such as the US bank crisis, bond crisis, RMB depreciation pressure, geopolitical tensions, slow recovery in economy, deflation, weakening PMI, and more. Any negative development in the global economy can evoke the nerves of astute domestic traders, and prices can only go down.

From the current perspective, the downward risk of CPL at the price of 11,800yuan/mt is gradually being released. For the downstream buyers, this price is not considered high. However, from chip plants' perspective, their buyers have not purchased beyond rigid demand still, due to the lack of a foundation for rebound or expectations of economic recovery.

The systematic downturn of chemical products at the beginning of June is not a common occurrence. In previous years, at this time, the trading apparatus was still undergoing maintenance, consumption was picking up, and the operating rate was gradually increasing after the Spring Festival. However, this year, a series of factors have caused continuous decline in mid-May. Looking ahead to June and July, it is the off-season for demand, and this round of concentrated CPL maintenance is gradually ending. Therefore, neither from the perspective of CPL supply nor from downstream demand, there is no foundation for an increase in price.