CCM: Export volume of furfural goes down in China in 2016 06-07-2016

Entering year 2016, China's export price of furfural starts to decline ascribed to the falling price of corn (raw material of furfural). In Jan. 2016, the export price fell to the lowest since Jan. 2014, being USD1,137.5/t (RMB7,437.54/t), a YoY fall of 22.66% and a MoM fall of 5.99%. Meantime, the export volume of furfural also reported a YoY fall of 31.54% in Jan. 2016, presenting 27,44.93 tonnes. 


                                                           Exports of furfural in China, Jan. 2014-Jan. 2016

 

                                                                               Source: China Customs


CCM believes that the simultaneous declines in export price and export volume of furfural may be caused by following factors:


The continuously falling corn price reduced the production cost and export price of furfural. According to CCM research, the average market price of corn was USD309.34/t (RMB2,022.62/t) in Jan. 2016, a YoY fall of 16.8%.


The slumping international crude oil price spurred down the prices of downstream products. Data from the New York Mercantile Exchange show that the futures price of Brent crude oil declined to USD34.74/bbl (RMB227.15/bbl) in Jan. 2016, a YoY drop of 6.81%.


Phenolic resin is the extended product of petroleum industry, and it is also the major substitute for furan resin (terminal downstream product of furfural). That the slumping crude oil price pulled down the price of phenolic resin, making furan resin lose its price advantage. As a result, the demand for furfural reduced, compressing the export volume.


The domestic inventory of furfural was abundant, pulling down the market price of furfural and spurring up the export price. According to analyst CCM, the average market price of furfural was USD1,141.70/t (RMB7,465/t) in Jan. 2016, down by 20.51 YoY.


Furfural enterprises overstocked their products, causing mounting inventory and reducing operating rate. From Sept. 2015 to Jan. 2016, the operating rate of China's furfural enterprises has kept falling, being merely 15% in Jan. 2016, a MoM decline of 15%.




                                              Operating rate of furfural enterprises in China, Aug. 2014-Feb. 2016

                                                                                     Source: CCM


What's more, the negative international situation of some export destinations also affected the export volume of China's furfural. In Jan. 2016, China mainly exported furfural to Belgium, a proportion of 51%, according to China Customs. However, the export volume declined affected by the refugee crisis in Europe and the terrorist attacks happened in Brussels, the capital of Belgium.


Moreover, the prospect of the global economy in 2016 is still murky, and the downstream resin sector and foundry sector fails to perform well, leading the weak demand for furfural in the world. All these are bad for the recovery of the furfural market. So, CCM holds the view that the exports of furfural will remain depressed in China in 2016.


                                                  Export proportion of furfural by destination in China, Jan. 2016


                                                                                  Source: China Customs

This article comes from Corn Products China News 1603, CCM




About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

 

For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.


Tag: furfural    corn


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