Author Archives: lubon

The spot market activity is low, and the price of alumina has slightly declined

According to the commodity market analysis system of Shengyishe, as of March 15th, the average price of alumina in the market was 3473 yuan/ton, and on March 8th, the average price of alumina in the market was 3483 yuan/ton, a decrease of 0.29% compared to last week.

 

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In terms of cost

 

There is currently no news of resuming production of bauxite in Shanxi and Henan, and the supply of bauxite in Shanxi and Henan is expected to remain tight in the short term. But the market’s expectation of mining starting in March has strengthened. Aluminum oxide plants in Shanxi and Henan regions have successively raised the long-term purchase prices of liquid alkali in March.

 

In terms of supply and demand

 

The resumption of production in some aluminum oxide plants has been promoted, and the operating rate of aluminum oxide has been increased. Due to the average activity of the aluminum oxide spot market, the market price of aluminum oxide in some provinces has been lowered again.

 

Post trend prediction

 

We need to continue to monitor the expected resumption of production of aluminum oxide plants in the Jin Yu region and the recent arrival of imported aluminum oxide at the port. In the short term, it may mainly operate in a oscillatory manner.

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Inflation! Copper prices have broken the 70000 mark

1、 Trend analysis

 

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According to monitoring data from Business Society, copper prices surged significantly on March 14th, rising 4.08% in a single day, breaking through the 70000 mark and reaching a new high of 71881.67 yuan/ton since June 14th, 2022. The significant increase in copper prices is mainly influenced by the news of negotiation meetings among domestic copper smelters.

 

The specific situation is as follows:

 

Copper concentrate processing fees TC/RC have fallen to a ten-year low

 

Due to the continuous decline in copper concentrate processing fees TC/RC and the loss of profits for smelters, the industry’s expectations for production reduction are constantly strengthening. The current TC of copper concentrate is $15.29/ton, a significant decrease of 83.73% from the high point of $94/ton in September last year, which is the lowest point in nearly a decade. Under recent price levels, smelters are gradually experiencing increasing losses. If the smelter purchases spot copper concentrate for production, the current loss is about 1400 yuan/ton. If the smelter uses long single copper concentrate for production, the current profit is about 900 yuan/ton. The continuous decline in copper concentrate processing fees is due to the fact that the expansion rate of crude refining capacity in domestic copper smelters is greater than the supply rate of copper concentrate. It is expected that processing fees will continue to decline, possibly reaching negative numbers. Even domestic smelters undergoing maintenance may not be able to reverse the decline in processing fees.

 

On the 13th, domestic smelters held a meeting to discuss reducing production

 

The news of domestic smelters reducing production in the market has also been fermenting for some time. According to the news, on the 13th, the China Nonferrous Metals Association convened a meeting of top domestic copper smelters. In response to the continuous decline in smelting costs, each smelter may have production reduction plans in the future, but the specific amount of production reduction is not yet clear, and small smelters may be the first to be affected. The expectation of reduced production has become a key factor in the rise of copper prices.

 

The expectation of reduced production in this round of copper smelters may first be implemented in small factories. Although most of the top domestic smelters currently have a long order guarantee of $80 per ton for processing fees, relying on spot supply will still impact smaller smelters. After a sharp decline in TC, refineries have strengthened their efforts to purchase scrap copper.

 

Fundamentals:

 

Macro positive

 

Despite rising inflation data in the United States, the market still expects interest rate cuts to begin in June. On the domestic side, the State Council has issued the Action Plan for Promoting Large scale Equipment Renewal and Consumer Goods Trade in; And it will guide banking institutions to reasonably increase green credit and strengthen financial support for the production, service, and consumption of green smart home appliances. Properly reduce the down payment ratio for passenger car loans, and reasonably determine the loan term and credit limit for automobiles. The State Administration for Financial Regulation claims to accelerate the implementation and effectiveness of the coordination mechanism for urban real estate financing.

 

LME copper inventory slightly decreased

 

According to the above chart, LME copper inventories have slightly declined recently. As of the 13th, LME copper inventory was 108925 tons, a decrease of 34.26% from 165700 tons at the beginning of the year.

 

Supply side

Chile’s state-owned mining company Codelco stated that a worker died in an accident at the Radomiro Tomic copper mine in the northern part of the country last Friday afternoon. The company stated in a statement that activities in the mining area where the accident occurred have been suspended. Last week, the domestic electrolytic copper production was 242000 tons, an increase of 3000 tons compared to the previous week.

 

The overall demand side is dull

 

At present, downstream consumption of copper is relatively flat. Downstream demand is not as good as copper prices, and facing high pressure from processing factories, there are basically orders for on-demand procurement.

 

According to the annual price comparison chart of copper, the trend of copper prices in the second half of March has mostly improved in the past five years.

 

Future Market Forecast:

 

Although the news of domestic smelters reducing production continues to ferment and meetings have been held, the scale and timing of the reduction are still unclear. According to reports, the actual direct reduction in production is still very rare, and the output of most enterprises is relatively stable. From the current perspective, instead of focusing on the emphasis on reducing losses and production, what actually has a more prominent impact on production is the upcoming peak maintenance period and early maintenance of some smelters. From the current fundamental data, it can be seen that with the arrival of the maintenance period, domestic output will be gradually affected. The average monthly output in the second quarter is expected to be slightly lower than the level in March, and domestic output will fall slightly. In addition, import expectations are also slightly insufficient. Therefore, the overall tight supply situation still exists.

 

Overall, the sentiment driving the rise in copper prices may take some time to digest. Currently, TC prices continue to decline, domestic refineries are reducing production, and coupled with the expected impact of the Federal Reserve’s interest rate cut, it is expected that copper prices will also maintain a strong pattern. However, it is necessary to be cautious of the impact of high copper prices on market demand.

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Hydrogen peroxide market is on the rise

According to the data from the Commodity Market Analysis System of Business Society, since March, the hydrogen peroxide market has rebounded and prices have risen. At the beginning of the month, the average market price of hydrogen peroxide was 783 yuan/ton. On March 12th, the average market price of hydrogen peroxide was 806 yuan/ton, with a price increase of 2.98%.

 

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Lido supports the rise of hydrogen peroxide market

 

In early March, terminal printing and paper industry enterprises gradually resumed production, and demand gradually increased. The transaction volume of hydrogen peroxide market improved, and the market gradually rebounded. Prices slightly increased, with an average market price of 800 yuan/ton and an overall price increase of around 30-50 yuan/ton.

 

In the second week, terminal demand gradually rebounded with bullish support, and the hydrogen peroxide market will continue to remain strong, with a price range of 800-850 yuan/ton. Hydrogen peroxide manufacturers mainly raise prices, and prices are gradually rising.

 

Chemical analysts from Business Society believe that by the end of March, hydrogen peroxide manufacturers have gradually resumed production, and the sustained upward momentum in the market is insufficient.

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The tin ingot market has slightly rebounded (3.4-3.11)

According to the monitoring of the commodity market analysis system of Business Society, the 1 # tin ingot market in East China rose first and then fell this week (3.4-3.11). The average market price at the beginning of last week was 28710 yuan/ton, while the average market price at the beginning of this week was 221560 yuan/ton, up 1.3% for the week.

 

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K-bar chart of commodity prices, using the concept of price trend K-line, reflects the weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations. From the monthly K-bar chart, it can be seen that after November 2022, tin prices have been continuously rising for three months due to macroeconomic factors. Since February 2023, prices have fallen by 11.35% in a single month, and the trend of tin prices has fluctuated narrowly in the past three months. From the weekly K-bar chart, it can be seen that the tin ingot market has seen more ups and downs in recent times.

 

In terms of supply, with the end of the holiday, smelting enterprises that had previously stopped work in Yunnan have resumed work. Recently, they have basically resumed normal production, and enterprises that have undergone early maintenance have also started work. Tin ingot production is gradually returning to normal, but the supply at the mining end is still tight, and the impact on the market is still relatively low. Downstream photovoltaic companies have performed well in terms of demand, with recent recovery in terminal demand orders and some recovery in market demand for semiconductors, electronic products, and other products. Market expectations have improved. Overall, the recent downstream performance has been good, driving the market atmosphere to rebound. The tin ingot market has been rising for two consecutive weeks. It is expected that in the short term, under the influence of relatively stable macro news, the tin ingot market will mainly operate in a stable and strong manner. As the second quarter approaches, the market’s focus will still be on the news of resuming production in Wa State, with a focus on changes in processing fees in the future.

 

Related data:

 

On March 10th, the base metal index was 1185 points, unchanged from yesterday, down 26.67% from the highest point in the cycle of 1616 points (2022-03-09), and up 84.58% from the lowest point of 642 points on November 24th, 2015. (Note: The cycle refers to 2011-12-01 present).

 

On March 10th, the non-ferrous index was 1108 points, unchanged from yesterday, a decrease of 27.96% from the highest point in the cycle of 1538 points (2021-10-18), and an increase of 82.54% from the lowest point of 607 points on November 24th, 2015. (Note: The cycle refers to 2011-12-01 present).

 

According to the price monitoring of Business Society, in the 10th week of 2024 (3.4-3.8), there were a total of 8 commodities in the non-ferrous sector that showed a month on month increase in commodity prices. The top 3 commodities with the highest increase were gold (3.55%), silver (2.92%), and zinc (2.69%). There are a total of 12 products with a month on month decline, and the top 3 products with the largest decline are metal praseodymium (-3.43%), magnesium (-3.27%), and praseodymium neodymium alloy (-2.29%). The average increase and decrease this week is -0.11%.

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Polycrystalline silicon prices remain stable this week (3.4-8)

This week (3.4-8), there was little change in the domestic polysilicon market, and the market remained stable after the holiday. According to the commodity market analysis system of Shengyishe, polysilicon saw a 0% increase and decrease in the week. At present, the mainstream range of single crystal dense materials with a model of first-class solar energy has slipped to 55-6000 yuan/ton.

 

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On the supply side, the current operating rate is still high, and all large factories are operating, showing some pressure on the supply. On the one hand, mainstream large factories have stable production, coupled with the gradual release of new production capacity, achieving mass production, and domestic supply performance is abundant. However, due to the stable operating rate of downstream silicon wafers, there was no significant room for improvement after the holiday. Under the influence of downstream procurement slowdown, the shipment speed of manufacturers slowed down, leading to silicon material manufacturers starting to accumulate inventory. Although the current prices are running low, manufacturers are gradually showing a mentality of price support, and the factory prices are temporarily stable. However, the bargaining power of silicon material manufacturers may continue to weaken, and it is not ruled out that there is a possibility of a long-term decline,

 

From the perspective of downstream silicon wafers, this week’s silicon wafer quotation remains unchanged from last week’s price. The operating load of silicon wafer enterprises remains at the previous level, and currently there is significant inventory pressure, mainly due to the backlog of inventory from manufacturers in the early stage, coupled with downstream battery manufacturers stopping work and taking holidays, resulting in an oversupply situation. But currently, manufacturers are still raising prices, and the price of silicon wafers is mainly stable. The mainstream transaction price of P-type M10 silicon wafers remains stable at 2.05 yuan/piece; The mainstream transaction price of P-type G12 is 3.00 yuan/piece; The mainstream transaction price for N-type M10 silicon wafers is 2.00 yuan/piece; The mainstream transaction price for N-type G12 is 3.10 yuan/piece.

 

From the perspective of terminal demand, the quotation for battery cells remains basically unchanged. Due to the weakening downstream demand, the production of P-type battery cells has basically ended. Component prices continue to hang upside down. This week, components have been affected by the sluggish terminal installation, and prices have remained sluggish. The photovoltaic industry chain has maintained a pattern of oversupply.

 

Market forecast: Polycrystalline silicon analysts from Business Society believe that the upstream supply pressure of the photovoltaic industry chain may gradually become prominent, but the demand for installed capacity is still low. The upstream and downstream of photovoltaics will continue to remain sluggish, and the price of silicon materials is still difficult to improve in the short term.

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The hexafluoropropylene market remained weak and stable in February

In February, the hexafluoropropylene market operated weakly and steadily. As of February 28th, the benchmark price of hexafluoropropylene for Shengyishe was 36350.00 yuan/ton, a decrease of -1.36% compared to the beginning of this month (36850.00 yuan/ton).

 

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The market recovery after the holiday is slow, and prices are slightly chaotic. The price of raw material trichloromethane continues to rise, with an overall increase of 2.11% within 7 days. The high cost of raw materials has led to cost pressures. As of February 29th, the benchmark price of trichloromethane in Shengyishe was 2450.00 yuan/ton, an increase of 6.52% compared to the beginning of this month (2300.00 yuan/ton).

 

Business Society’s hexafluoropropylene analyst predicts that in March, the hexafluoropropylene market will be under cost pressure and prices will remain strong. More attention should be paid to market news guidelines.

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In February, the market for butadiene rubber saw a significant upward trend, which may continue to rise in the later stage

In February, the market for butadiene rubber saw a significant increase. According to the Commodity Market Analysis System of Business Society, as of February 29th, the market price of butadiene rubber in East China was 13230 yuan/ton, an increase of 6.95% from the beginning of the month at 12370 yuan/ton.

 

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After the holiday, the external price of butadiene has risen, driven by the increase in supply prices of production enterprises. Under the dual positive impact, the butadiene market has a strong upward atmosphere, and the cost center of butadiene rubber has significantly increased; During the holiday period, downstream tire production was low and demand was weak. After the holiday, downstream tire production increased, providing certain support for butadiene rubber; In February, the overall production of butadiene rubber decreased, and the supply of butadiene rubber tightened compared to the previous period; Driven by comprehensive factors, the factory prices of enterprises have increased, and market quotations have significantly increased, leading to a rise in the market price of butadiene rubber. As of February 29th, the mainstream report of the butadiene rubber market in East China is 13100~13500 yuan/ton; Private polybutadiene rubber costs 13100~13300 yuan/ton

 

In February, the overall production of butadiene rubber decreased, and the supply of butadiene rubber tightened compared to the previous period. There are still plans for maintenance of the butadiene rubber unit in March, and the supply of butadiene rubber is expected to remain tight in the later stage.

 

In February, the price of butadiene increased significantly, and the cost support for butadiene rubber strengthened. According to the commodity market analysis system of Shengyishe, as of February 29th, the price of butadiene was 11095 yuan/ton, an increase of 13.72% from the beginning of the month’s 9756 yuan/ton.

 

Demand side: During the holiday season, downstream tire production was low, and the demand side was weak. After the holiday, downstream tire production increased, providing certain support for butadiene rubber. It is understood that as of February 23, 2024, the production capacity of all steel tires in Shandong region was 4.3%, and the production capacity of semi steel tires in China was 6.4%.

 

Market forecast: Business Society analysts believe that raw material prices will continue to rise, and the cost support for butadiene rubber will strengthen. Some equipment will be shut down for maintenance, while there are still other maintenance plans in the future. The pressure on the supply side of butadiene rubber is expected to further decrease, and downstream tire production will increase compared to the holiday period. Overall, the spot market for butadiene rubber will continue to rise in the future.

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The domestic ethanol market saw a narrow decline in February

According to the Commodity Market Analysis System of Business Society, the domestic ethanol market saw a narrow decline in February. From February 1st to 29th, the average price of domestic ethanol producers dropped from 6425 yuan/ton to 6287 yuan/ton, with a price drop of 2.14% during the cycle and a year-on-year decrease of 12.5%.

 

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At the beginning of the month, as the Spring Festival holiday approaches, many traders have left the market, and there is not much change in the prices of production enterprises. At present, the demand is average, the cost support for ethanol is insufficient, and domestic ethanol prices are weak, resulting in slow shipments. During the Spring Festival in some regions, the equipment did not shut down and production was normal, with limited external sales. Prices continued to weaken after the Spring Festival, and the later snowfall weather affected the delivery speed. The domestic ethanol market continued to be weak.

 

On the cost side, corn prices bottomed out and rebounded in February. The impact of policies and snowfall in the north have led to a narrow increase in corn prices. Under the influence of policies, corn prices are expected to continue to rise in March. Further observation is needed to determine whether the increase in temperature will affect the progress of grain sales. The short-term cost of ethanol is influenced by favorable factors.

 

On the supply side, there was no adjustment observed during the ethanol maintenance in February, and production remained stable with slight adjustments within the region. After the Spring Festival, the main production areas have high inventory levels, with short-term release of inventory being the main focus. The supply side of ethanol is affected by bearish factors.

 

On the demand side, the focus of the ethyl acetate market declined in February, and the utilization rate of ethyl acetate production capacity decreased significantly. The demand for Baijiu has picked up due to the Spring Festival holiday. The short-term demand for ethanol is mixed.

 

Market forecast, cost bearish, with many ethyl acetate factories maintaining normal production in March. Short term recovery of large factory facilities. Baijiu just needs to be purchased. Ethanol analysts from Business Society predict that the domestic ethanol market may consolidate in the short term.

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Insufficient support, weak decline in the dimethyl carbonate market in February

According to monitoring data from Business Society, as of February 29, 2024, the reference factory price of domestically produced industrial grade dimethyl carbonate was 3833 yuan/ton. Compared with February 1 (reference price of dimethyl carbonate was 3900 yuan/ton), the price decreased by 67 yuan/ton, a decrease of 1.71%.

 

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In February, the overall domestic dimethyl carbonate market showed a weak downward trend. In the early stage of the Spring Festival, the market for dicarboxylic acid had light trading, and downstream demand and stocking were average. The market was weak and mainly operated to maintain stability. After returning from the holiday, the overall boost in the dimethyl carbonate market is not good, and the focus of negotiations on dimethyl carbonate has slightly decreased. As of February 29th, the domestic dimethyl carbonate market price reference is around 3600-4100 yuan/ton.

 

Analysis of Factors Influencing the Market of Dimethyl Carbonate

 

In terms of demand: Prior to the holiday, downstream demand for dimethyl carbonate has gradually ended, with weak support on the demand side. After the holiday, downstream production of dimethyl carbonate has been low, and downstream demand has recovered slowly. There have been fewer new orders on the market. Overall, the support provided by the demand side for dimethyl carbonate in February is also insufficient.

 

In terms of supply: In February, the overall supply and demand transmission of dimethyl carbonate was slow, with slow market shipments before the holiday and some factories having accumulated inventory after the holiday. There is a certain supply pressure on the supply side of dimethyl carbonate, which makes it difficult for the supply side to provide effective support to the market.

 

Analysis of future market trends

 

At present, the trading atmosphere of dimethyl carbonate on the market is relatively light, and there is a certain wait-and-see sentiment in the market. The dimethyl carbonate data analyst from Business Society believes that in the short term, the market for dimethyl carbonate will mainly adjust in a narrow range, and the specific trend still needs to pay more attention to changes in supply and demand news.

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The PVC spot market price in February first fell and then rose

1、 Price trend

 

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According to data monitored by Business Society, the PVC spot market prices in February first fell and then rose, and overall, the prices increased. On February 1st, the average price of PVC in China was 5574 yuan/ton. On February 29th, the average price was 5596 yuan/ton, with a monthly price increase of 0.39%.

 

2、 Market analysis

 

In February, the spot market price of PVC fell first and then rose, and overall, the price increased. In the first half of this month, the spot market price of PVC fell. The market inquiry enthusiasm is average, and the market transactions are light near the holiday. The market has basically stagnated during the mid Spring Festival holiday. In the latter half of the year, the spot market prices remained stable and increased after the opening of the year. The manufacturer’s quotation is mainly stable, while the prices of traders are relatively flexible. Downstream markets are more wait-and-see, just in need of goods. As of now, the quotation range for PVC 5 type carbide materials in China is mostly around 5300-5850 yuan/ton.

 

In terms of crude oil, international crude oil futures closed slightly lower on February 28th. The settlement price of the main WTI crude oil futures contract in the United States was $78.54 per barrel, a decrease of $0.33 or 0.4%. The settlement price of the Brent crude oil futures main contract was $82.15 per barrel, a decrease of $0.41 or 0.5%.

 

In terms of calcium carbide, according to the commodity market analysis system of Business Society, the ex factory price of calcium carbide in the northwest region fell in February. On February 1st, the average ex factory price of mainstream calcium carbide manufacturers in Northwest China dropped from 3000 yuan/ton at the beginning of the week to 2900 yuan/ton on February 29th, a decrease of 0.55%. Production companies had high inventory levels before and after the Spring Festival, and many companies provided subsidies and discounts to actively ship out. In the future, the calcium carbide market has bottomed out. Considering that enterprise inventories are still at a medium to high level and prices remain relatively stable, as the speed of outbound shipments increases and downstream demand gradually improves, the calcium carbide market is steadily improving.

 

3、 Future Market Forecast

 

According to PVC analysts from Business Society, as downstream product companies continue to start production, the market will see a recovery in demand and an improvement in on-site demand. The spot market prices will remain stable with some increases, but it is still difficult to trade high priced goods. It is expected that the PVC market will mainly adjust within the short term.

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