Raw material support weakens, causing the price center of unsaturated polyester resins to shift downward.

【Lead-in】: In November, cost support for domestic unsaturated polyester resins (UPR) weakened. Industry maintenance activities decreased, and major producers maintained normal operating rates, although widespread load reductions were observed. Spot supply was generally sufficient. Continuous price declines suppressed demand in the downstream fiberglass reinforced plastics (FRP) sector; end-user procurement slowed significantly, characterized by strong wait-and-see sentiment, making it difficult to boost transaction volumes. Additionally, with two new units scheduled to commence production soon, expectations of increased supply pressured the market, spreading bearish sentiment. Driven by capital constraints, inventory holders increased discounting to liquidate stock, leading to a rapid and substantial downward trend in prices.

In recent periods, ex-factory quotations from UPR producers have remained stable or slightly declined, with varying degrees of reduction across different grades. The mainstream downward adjustment ranged from 200 to 500 RMB/ton. The persistently weakening market has severely dampened confidence. As spot prices gradually loosened, the "buy on rising prices, not on falling prices" trading logic became prominent. Downstream end-users' procurement pace slowed markedly, with most adopting a wait-and-see approach. Current market transactions remain sluggish. Traders are under pressure to offer discounts to clear inventory and recover funds, yet industry profits have remained at low levels for an extended period. Downstream FRP product orders are insufficient, lacking robust support from the demand side; even after discounts, transaction volumes have failed to improve. Downstream participants believe that current resin mill price cuts are relatively conservative and that the market has not fully bottomed out. They anticipate that further price declines will be required before triggering opportunistic low-level buying from downstream users. For instance, the tax-inclusive quotation for Changzhou ortho-phthalic acid type 196# UPR is 10,800 RMB/ton, down from last week, approaching the mid-low range for the year. However, these lower prices have not led to concentrated restocking; bearish expectations persist, and purchases remain limited to rigid demand.

The following table presents a comparison of recent domestic UPR market prices (Unit: RMB/ton):

As shown in the table above, the domestic UPR market continued its weak trajectory. Recently, upstream raw material prices dropped significantly, causing cost support to collapse rapidly, which drove UPR prices down substantially. Consecutive price declines have continually undermined operational confidence among market participants, leading to the spread of pessimistic and bearish sentiment. Combined with weak downstream demand follow-through, contradictions in supply-demand fundamentals have become more pronounced, leaving the market without effective positive catalysts.

From the perspective of price and profitability, since November, UPR market quotations have declined continuously, reflecting persistent weakness. However, the profit margin moved in the opposite direction; industry losses narrowed steadily, transitioning into a profitable state, with profitability improving significantly month-over-month compared to October. Data as of November 10 indicates an average gross profit of 148 RMB/ton for UPR. Year-on-year, the disparity in gross profit is notable, declining by 576 RMB/ton compared to the same period last year, representing an 80% drop. Upstream raw materials generally saw price decreases, with the rate of decline in raw material costs exceeding that of resin ex-factory prices. This downward transmission of cost-side benefits facilitated the recovery of production spreads, enabling the industry to achieve profitability. Compared to the previous year, the industry's profit space has contracted significantly; higher annual raw material costs compared to last year remain the core reason dragging down industry profitability performance.

Regarding UPR specifically, decreasing cost pressures are the primary reason for producers lowering their quotes. However, considering the high uncertainty in crude oil price trends, this factor constrains the potential for deep resin price drops, suggesting that further downside magnitude may be limited. This week, producer ex-factory quotations showed divergence, with some holding steady while others adjusted downwards by 100–550 RMB/ton. Continued attention should be paid to pricing adjustments by other manufacturers and changes in crude oil market conditions.

In summary, the current market has seen price retracements due to the combined effects of declining raw material prices, shrinking demand, and increased supply, resulting in overall weak market confidence. Looking ahead, suppliers may increase shutdowns for maintenance to alleviate supply pressure. On the demand side, downstream FRP orders are expected to remain weak, and stone product enterprises are projected to see further declines in operating loads in December. With no short-term policy tailwinds for the industry, resin demand is likely to show a stable-to-declining trend. Therefore, while demand support continues to weaken, the supply side may optimize the supply-demand balance through maintenance shutdowns; however, medium-to-long-term price trends will primarily follow fluctuations in crude oil and upstream chemical raw material markets.