Fall first and then rise in August

The price of ethylene glycol first fell and then rose in August. According to data from Shengyi Society, as of August 30th, the average price of domestic oil to ethylene glycol was 4678.33 yuan/ton, an increase of 0.39% from August 1st. The prices in each region are as follows:

The spot price range for mainstream manufacturers in East China is 4600-4795 yuan/ton; The spot price of ethylene glycol in the South China market is 4600 yuan/ton.

On August 30, 2024, the basis of the spot contract for ethylene glycol at the port was close to low and far from high. The paper cargo basis quotation for the 01 contract this week ranges from -1 to+3; The basis of forward contracts is relatively strong, with a base price of 12-18 yuan/ton in September and 14-22 yuan/ton in October.

On August 30th, the price of coal to ethylene glycol remained basically stable, with a domestic price range of 4250-4350 yuan/ton, including tax.

On August 29, 2024, the external price of ethylene glycol was as follows: the landed price in China was $564/ton, and the landed price in Southeast Asia was $556/ton. The domestic landed price has slightly increased.

List of August Ethylene Glycol Port Inventory Data

As of August 30, 2024, the total spot inventory of ethylene glycol in the main ports of East China was 673300 tons, an increase of 57000 tons compared to the total spot inventory of 616300 tons on August 1.

We will first go to the warehouse and then accumulate inventory within the month, mainly due to the concentrated arrival of goods at the port last week, resulting in accumulated inventory data at the port. This week’s expectations for the port have declined, leading to a decrease in inventory data.

Reasons for the rebound of ethylene glycol prices in August:

Negative expectations on the supply side of market transactions

On the supply side, the scale of production reduction in ethylene glycol plants has recently expanded, partly due to the favorable price difference of EO conversion, achieving production capacity conversion, and partly due to planned shutdown and maintenance. On the demand side, downstream demand is expected to be strong during the peak season, with a turning point in the peak season for gold and silver, and a slight rebound in downstream operating rates.

Future expectations

At present, the absolute amount of explicit inventory in ports is still relatively low. This provides some support for the price of ethylene glycol.

It is expected that the price of ethylene glycol will experience strong fluctuations in the short term, but the price ceiling will narrow.

1、 Price trend

According to the Commodity Market Analysis System of Shengyi Society, the average price of ammonium sulfate in the domestic market on August 23 was 908 yuan/ton, an increase of 1.30% compared to the average price of 896 yuan/ton on August 16.

2、 Market analysis

This week, the domestic ammonium sulfate market price first rose and then fell, with an overall price increase. This week, the operating rate of coking enterprises is relatively low, and some enterprises have limited production. The operating rate of internal level enterprises has also decreased. At the beginning of the week, market demand remained stable, downstream inquiries increased, the focus of ammonium sulfate transactions shifted upward, and prices rose. Recently, the market has started to consolidate, with minor fluctuations being the main trend. As of August 23rd, the mainstream ex factory quotation for coking grade ammonium sulfate in Shandong region is around 890 yuan/ton. Domestic grade ammonium sulfate, the mainstream ex factory quotation in Shandong region is around 895-950 yuan/ton.

3、 Future forecast

An ammonium sulfate analyst from Shengyi Society believes that the ammonium sulfate market has been fluctuating and consolidating recently. At present, the export market is improving and the market trading atmosphere is improving. It is expected that there is still room for growth in the domestic ammonium sulfate market after a slight consolidation in the short term.

1、 Price trend

According to the Commodity Market Analysis System of Shengyi Society, the price of aniline rose and then fell back this week. On August 12th, the market price of aniline was 10550 yuan/ton, and on August 16th it was 10120 yuan/ton, a decrease of 4.05% compared to last week and 9.13% compared to the same period last year.

2、 Analysis and Review

This week, the aniline market was under pressure and fell. Last week, the aniline market rose three times, but due to high prices and weak downstream demand, the aniline market fell back after rising prices to stimulate sales. With the decline in prices, there is a strong wait-and-see atmosphere downstream, and the enthusiasm for purchasing has decreased. Upstream inventory is low, and there is a clear willingness to raise prices.

Pure benzene: Recently, the pure benzene market has shown a strong trend, with increased support for aniline. On August 12th, the average price of pure benzene was 8464 yuan/ton, and on August 16th, the average price of pure benzene was 8534 yuan/ton, an increase of 0.83% during the period.

3、 Future expectations

The current aniline market is stable in terms of purchase and sales, with a strong upstream price mentality and downstream demand entering the market. Supply and demand remain stable, and it is expected that the aniline market will consolidate and operate in the short term.

Price trend

According to the bulk ranking data from Shengyi Society, the domestic PC market fluctuated and consolidated in early August, with various spot prices of different brands fluctuating. As of August 12th, the mixed benchmark price of Business Society PC is around 16400 yuan/ton, with a price increase or decrease of -0.40 compared to August 1st.

Cause analysis

In terms of raw materials, it can be seen from the above chart that the domestic price of bisphenol A was relatively weak in early August. The remote international crude oil price increase is suppressed by weak demand prospects, while the direct PC raw materials phenol and acetone both weaken, and the support for bisphenol A on the raw material side weakens. In addition, there is an expected increase in the load of the bisphenol A industry, with a trend of increasing supply and loose support on the supply side. The downstream production of the two main forces has weakened, with weak inventory and rigid demand procurement, resulting in a slowdown in the liquidity of the supply of goods. Overall, the support of bisphenol A for PC costs has decreased.

On the supply side: Since August, the overall operating rate of PC in China has remained stable with slight increases, and the industry average operating rate has narrowly increased to around 73.16% compared to the end of July. In the early stage, spot prices fell to the lowest point of the year, and manufacturers increased their bottom building operations by raising prices. The ex factory pricing remained firm, and some auction houses were sold at a premium. The scale of the future maintenance plan is average, and the industry load is stable with an upward trend. The supply of domestic goods will further increase. The on-site supply of goods will still remain abundant, and overall, the market supply side provides moderate support for PC prices.

In terms of demand, the PC consumption pattern did not show any improvement in early August, and the overall trend remained weak compared to the previous period. The main logic of procurement is biased towards weak rigid demand, with factories taking goods to maintain production. Downstream enterprises have low loads, weak stocking enthusiasm, and a narrow decline in consumption. Buyers have some resistance to high priced goods, and the circulation of goods is slow. The demand side has poor support for spot prices.

Future forecast

The PC market fluctuated weakly in early August. The upstream bisphenol A market has weakened, and the support for PC costs has weakened. The load of domestic aggregation plants is stable, with limited changes in supply side factors. At present, PC prices are still in the low point range of the year, and the market has limited decline due to bottoming out and forming a bottoming force. However, considering the high inventory pressure on PC society and the difficult supply-demand contradiction in the market, it is expected that the PC market will continue to operate at a low level in the short term.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of LLDPE (7042) was 8371 yuan/ton on August 1st, and the average price was 8328 yuan/ton on August 8th, with a price drop of 0.51% during this period.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of LDPE (2426H) was 9912 yuan/ton on August 1st, and the average price was 10062 yuan/ton on August 8th, with a price increase of 1.51% during this period.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of HDPE (5000S) was 8137 yuan/ton on August 1st, and the average price was 8137 yuan/ton on August 8th, during which the quotation was temporarily stable.

Recently, the price of polyethylene has fluctuated, with linear products experiencing a narrow range of weak downward adjustments. High voltage product quotations have increased, while low-voltage product quotations remain strong. On August 8th, international crude oil futures rose, oil prices rose, and there was some support on the cost side. With the continuous restart of polyethylene maintenance equipment, there is an expected increase in the supply side; On the demand side, it is in the traditional off-season, with limited order follow-up, a bearish market mentality, and a poor trading atmosphere on the market. Traders mainly offer small discounts for shipments, and linear product quotations are adjusted narrowly and weakly. However, the prices of high-pressure products are rising, and due to the impact of the Middle East situation, imported sources may be affected, leading to a significant increase in the prices of high-pressure products.

On August 9th, the Dalian Commodity Exchange polyethylene L2409 contract opened at 8162 yuan and closed at 8150 yuan, a decrease of 35 yuan, with a maximum of 8220 yuan and a minimum of 8139 yuan, a decrease of 0.43%. Recently, the weak performance of polyethylene futures has been the main factor, providing limited support for the spot market.

As the maintenance equipment restarts one after another, there is an expected increase in the supply side; In mid to late August, the demand for greenhouse film market may begin to rebound, and the market will enter the reserve stage. Polyethylene is expected to rise in the short term, but the upward adjustment space may be limited.

In July, the domestic liquid ammonia market continued its downward trend from June, with the decline worsening compared to the previous month. According to the monitoring of the commodity market analysis system of Shengyi Society, on July 31st, the cumulative decline in the main production area of Shandong this month was 12.80%. Manufacturers in Shandong have reduced their prices by over 300 yuan/ton this month. At present, the mainstream quotation for liquid ammonia in Shandong region is 2400-2700 yuan/ton.

On the raw material side, according to the monthly rise and fall chart of the liquid ammonia industry chain in Shengyi Society, the industry chain shows a pattern of more declines and less increases, with weaker middle and lower reaches. Upstream natural gas prices have risen. But the boosting effect on downstream liquid ammonia is limited. On the one hand, coal ammonia companies are still affected by low coal prices, and their profits are still acceptable. In order to ensure that shipping companies are still willing to lower prices to attract the market. According to the Commodity Market Analysis System of Shengyi Society, the decline of thermal coal this month is 0.32%. Overall, it creates a negative impact on the liquid ammonia market. At the same time, reflecting both supply and demand, the market still shows a relatively bearish trend.

On the supply side, there is high inventory pressure on enterprises, and in order to alleviate the pressure, factory prices continue to be lowered. On the one hand, as supply increases, manufacturers’ shipments slow down and inventory pressure rises. On the other hand, the large import volume and low-priced foreign sources have impacted the domestic market. Supply is in an oversupply situation. During the month, major factories in Shandong have repeatedly lowered the ex factory price of liquid ammonia by more than 300 yuan/ton.

From the demand side, downstream industries such as urea and compound fertilizers lack support, resulting in a decline in the overall product line. Urea and ammonium nitrate have experienced significant declines. According to monitoring, urea fell by 6.6% in July, and ammonium chloride fell by 8.27%. Downstream weakness has further exacerbated the supply-demand imbalance.

Market forecast: There will be little change in cost, especially in coal prices, which may continue to be weak. In the short term, the downstream urea and compound fertilizer market continues to be weak, and ammonia companies are nearing the end of destocking, which is expected to alleviate supply pressure in the near future. In the later stage, downstream agricultural demand will rebound, and the price of liquid ammonia will stop falling. In the later stage, it may gradually seek upward space.

Since the price of lithium carbonate fell in April, there has been no rebound trend in the price of lithium carbonate. As of the end of July, the quoted price of battery grade lithium carbonate was 93600 yuan/ton, a decrease of 19.3% from 116000 yuan/ton on April 1 and a decrease of 68% from the same period last year; The quotation for industrial grade lithium carbonate is 91000 yuan/ton, a decrease of 12% from 107000 yuan/ton on April 1st and a decrease of 67% from the same period last year.

On the supply side: In the first half of the year, the supply of lithium resources was loose, overseas supply continued to increase, domestic lithium mining accelerated, and at the same time, the layout of lithium recycling and reuse was also accelerating, which was a negative impact on the supply side. In this situation, lithium carbonate enterprises choose to stop production and maintain prices. According to statistics, seven domestic production enterprises stopped production for maintenance in July, which is expected to reduce supply by 1400 tons. However, the price increase effect is not significant, and there is no significant improvement in the situation of oversupply on site.

Demand side: The new energy vehicle market fell short of expectations, with pure electric vehicle sales increasing by 11% year-on-year in the first half of the year, far behind the growth rate of plug-in hybrid vehicle sales (88%). Therefore, the actual growth rate of lithium carbonate consumption is much lower than the growth rate of new energy vehicle sales.

In terms of inventory: Currently, the inventory of lithium carbonate exceeds 110000 tons, reaching a new high. The high inventory has triggered a wait-and-see attitude in the downstream market. Due to price uncertainty, downstream enterprises generally choose to operate with low inventory and purchase on demand to reduce risks.

Positive policies: On July 25th, the National Development and Reform Commission and the Ministry of Finance issued a notice on “Several Measures to Strengthen Support for Large scale Equipment Renewal and Consumer Goods Trade in”. The document proposed that “an overall arrangement of about 300 billion yuan of ultra long term special treasury bond funds will be made to strengthen support for large-scale equipment renewal and consumer goods trade in”, which is expected to drive the installation of 100GWH lithium batteries, but the actual impact still needs continued attention.

Business Society’s lithium carbonate analyst believes that the market surplus still exists, and there are no favorable factors in the short term. The price of lithium carbonate still has downward space, and it is expected to continue to fluctuate weakly in the short term.

Recently, the domestic polyester staple fiber market prices have maintained a weak adjustment. As of July 29th, the average price of 1.4D * 38mm mainstream polyester staple fiber factories in China was 7835 yuan/ton, a decrease of 1.05% from July 22nd. The decline in costs and weak demand have dealt a blow to the price of polyester staple fibers, leading to a downward trend in prices.

In terms of cost, the crude oil market is generally concerned about weak demand, and European and American crude oil futures fell to a six week low. As of July 26th, the settlement price of the main contract of WTI crude oil futures in the United States was $77.16 per barrel, and the settlement price of the main contract of Brent crude oil futures was $80.28 per barrel.

At the same time, the prices of PTA, the main raw material for polyester staple fibers, and ethylene glycol, the secondary raw material, have both declined. The impact of PTA plant changes on its supply is limited, and the source of goods remains abundant, with an industry operating rate of around 82%. In terms of price, as of July 29th, the average spot market price in East China was 5850 yuan/ton, a decrease of 3.11% from early July.

On the demand side, the textile demand continues to be in a off-season state, and downstream yarn factories have accumulated finished product inventory. Under the conditions of high temperature and tight cash flow, the willingness to start production has decreased, and the enthusiasm for raw material procurement is not high. Recently, the export of textiles and clothing has also been sluggish, and the operating rate of the weaving industry has continued to decline. The overall market orders are still dominated by small and scattered orders.

Business analysts believe that mainstream polyester staple fiber manufacturers plan to reduce production by 10% -15% by the end of this month, with an expected decrease in supply. The factory adheres to the fixed price model unchanged, supporting the market mentality. However, due to the drag of costs and declining demand, it is expected that the price of polyester staple fibers may maintain a narrow decline.

According to the Commodity Market Analysis System of Shengyi Society, from July 15th to July 22nd, the domestic butadiene market price decreased from 13125 yuan/ton to 13112.5 yuan/ton, with a price reduction of 0.1% during the period. This week, the overall stability of the butadiene market is relatively weak, and downstream market demand has remained lukewarm, providing limited support for market sentiment. The overall market performance is weak, dragging down market quotes and reducing downstream market enthusiasm. There is a lack of actual transaction support. As of July 22, the self pickup price of East China’s butadiene diene is around 12950 yuan/ton, a decrease of about 50-100 yuan/ton compared to the same period last week. The ex factory price of Sinopec remains stable at 13200 yuan/ton, while prices of other refineries have slightly decreased by 50-100 yuan/ton.

Cost side: Crude oil analysts from Shengyi Society believe that the short-term supply and demand game of crude oil will continue to play a role, and the supply side will be supported by the geopolitical situation and OPEC’s production control. There is uncertainty on the demand side in the future, and in the short term, there will be some pressure on demand due to extreme weather conditions in the United States; In addition, the condition during peak driving season still needs further inspection. In the later stage, it is necessary to pay attention to further developments in the Federal Reserve’s interest rate policy, which will provide directional guidance for the future demand for crude oil. Overall, under the influence of both supply and demand, oil prices will continue to maintain a range oscillation pattern, and the amplitude may increase with the frequent occurrence of market news factors. As of July 19th, international crude oil futures have plummeted. The settlement price of the main contract for WTI crude oil futures in the United States was $78.64 per barrel, a decrease of $2.66 or 3.3%. The settlement price of the main Brent crude oil futures contract was $82.63 per barrel, a decrease of $2.48 or 2.9%.

Supply side: The listed price of butadiene for various sales companies of Sinopec remains stable at 13200 yuan/ton. Fujian United and Zhejiang Petrochemical’s Unit 2 have not been restarted, while Dushanzi Petrochemical has been shut down for maintenance. The comprehensive operating rate in China has not changed much this week, and the supply of butadiene is relatively stable.

Liaoyang Petrochemical’s 30000 tons/year butadiene plant is operating normally, with 400 tons sold at a bidding price of 12500 yuan/ton.

The Northern Huajin 120000 tons/year butadiene plant is scheduled to shut down for maintenance on July 12th, and is scheduled to restart at the end of August, with the quotation suspended.

Dalian Hengli’s 140000 tons/year butadiene plant is operating stably, with normal export supply at a price of 13060 yuan/ton.

Shenhua Ning Coal’s 64000 tons/year butadiene extraction unit is operating stably, with a small amount of supply for export at a price of 12480 yuan/ton.

Demand side: The downstream synthetic rubber market continued to weaken this week, with terminal demand maintaining rigid procurement. Downstream inquiries are resistant to high priced sources, and prices of styrene butadiene and butadiene rubber have slightly declined this week. The overall intention of downstream procurement is weak, and we are currently adopting a wait-and-see attitude. The overall transaction volume is more in line with demand, and the market support is relatively weak. The inquiry mentality is slightly cautious.

On Friday, July 19th, the closing price of butadiene in foreign markets was mixed: the FOB price in South Korea was reported at $1545-1555 per ton, an increase of $10 per ton; China CFR reported 1555-1565 US dollars/ton, unchanged; European butadiene FOB Rotterdam closed at $1170-1180/ton, down $20/ton; FD Northwest Europe closed at 1065-1075 euros/ton, down 10 euros/ton.

Market forecast: Currently, the production of butadiene is relatively stable, with no significant changes in the supply side, and the overall situation remains relatively stable. From the perspective of demand, downstream demand has always maintained strong support and price trends are weak. Downstream synthetic rubber enterprises have been affected by the decline in profits, and their purchasing enthusiasm has been significantly weakened recently. As a result, the market atmosphere is more wait-and-see. In the absence of obvious news on the supply and demand side, it is expected that the butadiene market will maintain a stable and weak trend in the short term, and there may still be room for slight downward exploration.

According to the monitoring of the commodity market analysis system of Shengyi Society, the price of activated carbon was 12000 yuan/ton at the beginning of this week, and 12100 yuan/ton over the weekend, with a price increase of 0.83%.

Domestic activated carbon manufacturers’ quotations have remained stable this week, with some manufacturers raising their prices. Market inquiries are active, and most shipments are based on orders. The ex factory price of activated carbon for coconut shell water purification in East China is between 9500-12500 yuan/ton, with strong demand supporting prices. We will focus on market transactions.

Coconut shell charcoal has a certain amount of sales in applications such as gold extraction, water purification, and filter cartridges, especially for gold charcoal, which receives a lot of inquiries from the African market; Fruit shell charcoal can be shipped smoothly from low to medium index sources. There is a recent rebound trend in imported carbide materials, and the industry should pay more attention to it.

Prediction: The transaction speed of the activated carbon market is accelerating, and it is expected that the price of activated carbon will mainly fluctuate in the short term.