Is China and the United States breaking the ice?

In light of the latest news, the Biden administration will review national security practices under former President Donald Trump,

These include the first phase of the China-US economic and trade agreement.

Good news!The US has suspended tariffs on $370 billion worth of Chinese goods.

WASHINGTON – The Biden administration will on January 29 review former President Donald Trump’s national security measures, including the first phase of a US-China economic and trade agreement.
Citing administration sources, the report said the Biden administration would suspend the implementation of additional U.S. tariffs on $370 billion of Chinese goods during the review until a comprehensive review is completed and the United States figures out how best to work with other countries toward China before deciding on any changes.

After the small “rising” tide of raw materials stand firm

Previous trade wars between China and the United States have been mutually damaging to the chemical industries of both countries.

China is one of the most important trading partners for the U.S. chemical industry, accounting for 11 percent of U.S. plastic resins exports to China in 2017, valued at $3.2 billion.According to the American Chemistry Council, the current high tariffs will cause chemical investors preparing to build, expand and restart new facilities in the United States to re-market their investments, which are estimated to be close to $185 billion.If the loss of such a large amount of chemical investment, the development of the domestic chemical industry in the United States, no doubt, is worse.

With the recovery of the global economy, China’s concentrated chemical industry chain and the advantages of abundant upstream and downstream supporting facilities will drive the demand for raw materials to improve.China and the United States trade reconciliation to add heavyweight, domestic raw material prices after the festival or still bullish.

Chemical fiber related raw materials

Supported by the policy of “stabilizing foreign trade”, the export of China’s textile and garment industry withstood the huge impact brought by the epidemic, among which the textile industry has achieved growth for nine consecutive months since April, while the garment industry has reversed since August.

Thanks to the continuous improvement of consumer demand in overseas markets, but the return of orders, and more importantly, the huge “magnetic attraction” formed by the stable industrial chain and supply chain system of the domestic textile industry, also reflects from one side the industrial practice of China’s textile industry to make deep adjustment and improve the quality of development.
Now the easing of Sino-US relations and the suspension of the trade war have opened a window of demand for the textile and garment industry, and prices are expected to rise!

The price of intermediates will rise

Affected by the rise of basic chemical raw materials and other factors, the price of dye intermediates continues to rise. The price of core intermediates is as follows:

It is understood that China’s largest nitrochlorobenzene enterprise “Bayi Chemical” was blocked by the Bengbu Emergency Management Bureau of the feeding system, and administrative punishment.Nitrochlorobenzene is an important intermediate for dyes, pesticides and medicine. The annual production capacity of nitrochlorobenzene in China is 830,000 tons, and that of Bayi Chemical Company is 320,000 tons, accounting for about 39% of the total production, ranking first in the industry.P-nitrochlorobenzene is the main raw material of anisole and reductant, which will affect the production cost of dispersive blue HGL and dispersive black ECT.After the closure of the old Bayi chemical plant, the downstream series of nitrochlorobenzene products will be operated in the high price range before the construction of the new plant.

In the case of obtaining cost and demand support, dyeing fee increase also seems reasonable.After the Spring Festival, there may be an increase in dyeing fee caused by dyes in the market. Traders should take into account the possible changes in dyeing fee when quoting to customers.

The price of viscose staple fiber is up 40%

Data show that the average selling price of viscose staple fiber in China is about 13,200 yuan/ton, up nearly 40% year on year and nearly 60% higher than the low price in August last year.In addition, the increased consumption of anti-epidemic materials such as face masks and antiseptic wipes as a result of the outbreak has led to an increase in the demand for non-woven fabrics, supporting the short-term upward price of viscose staple fiber.

Rubber products are sold to some people

Products included in the US China List: some tires and rubber products and some vitamin products.In 2021, rubber related raw materials have already set off a wave of price rises. I wonder if the news of the suspension of the trade war between China and the US will make the price rise faster?

Rubber prices have been pushed up by the Association of Natural Rubber Producing Countries (ANRPC), which estimates that global production of natural rubber in 2020 will be about 12.6 million tons, down 9% year on year, as a result of reduced production in Southeast Asia due to extreme weather such as typhoons, rainfall and rubber tree diseases and pests.

Rubber, carbon black and other upstream raw materials to drive the price of tires.Led by industry leader Zhongce Rubber, Linglong Tire, Zhengxin Tire, Triangle Tire and other companies have announced price increases of between 2% and 5% from January 1, 2021.In addition to local tire companies, Bridgestone, Goodyear, Hantai and other foreign tire companies have also increased their prices, each of which has a cumulative increase of more than 5%.

In addition, the detente between China and the United States will stimulate more consumer demand for products.
Sino-US relations’ turning point ‘?

Trump’s four years in office have brought a huge impact to China-US relations.Under the current political atmosphere in the United States, especially under the background that “getting tough on China” seems to be the consensus of the two parties and strategic circles in China, there is not much policy space for the Biden administration to improve relations with China, and it is even less likely that the legacy of Trump’s China policy will be greatly overrun in a short time.

But it is to be expected that the “freezing point” relationship between China and the United States will ease, and that under the general direction of pressure, competition and cooperation between the two sides, the economic and trade area will become a zone of easy repair.