According to the commodity market analysis system of Shengyishe, the price of cryolite in Henan province fell this week. On February 29th, the average market price in Henan was 7600 yuan/ton, a decrease of 25 yuan/ton compared to the average price of 7625 yuan/ton on February 26th, a decrease of 0.33%.

This week, the ice crystal market has slightly decreased, and enterprise prices have remained stable with little movement. Upstream raw material prices are operating at a low level, providing sufficient support for the cryolite market. Due to difficulties in operating fluorite mines, spot prices continue to be tight, and the overall price is still at a relatively high level in the fluorite industry. There is still pressure on the cost of cryolite, with most cryolite manufacturers maintaining stable prices. Some companies have slightly lowered their prices to promote shipment of cryolite, while downstream buyers follow up on demand. The market trading atmosphere is weak, and the cryolite market is observing and consolidating. As of February 29th, the ex factory quotation for cryolite in Shandong region is 7000-8600 yuan/ton; The ex factory quotation for cryolite in Henan region is between 7200-8200 yuan/ton, with a price reduction of 100 yuan/ton within the range.

The upstream fluorite market has slightly increased, with an average market price of 3350.00 yuan/ton on February 29th, an increase of 0.19% compared to the price of 3343.75 yuan/ton on February 26th. The game situation in the domestic fluorite industry still exists, and the operating rate of enterprises remains low. In addition, fluorite mining enterprises are facing increasingly strict safety and environmental requirements, making it difficult to operate fluorite mines. Downstream procurement follows up on demand, and actual procurement is limited. The fluorite price market is operating on a wait-and-see basis.

Market forecast: Difficulty in extracting cryolite raw materials, tight supply of fluorite, and continued cost pressure on cryolite. The price of cryolite on the market is mainly strong, and downstream parties have resistance to high prices. There is insufficient enthusiasm for entering the market to purchase, and manufacturers have limited shipments. The mentality of operators is cautious, and it is expected that the short-term cryolite market will consolidate and operate. In the future, attention will be paid to upstream price changes and downstream follow-up.

According to the commodity market analysis system of Shengyishe, the mixed xylene market slightly increased in February. On February 28th, the benchmark price of mixed xylene was 7420 yuan/ton, an increase of 1.09% from 7340 yuan/ton at the beginning of the month. The low point of the cycle was 7270 yuan/ton, and the high point was 7440 yuan/ton.

The rise in international crude oil and foreign market prices supports the formation of mixed xylene

Affected by the situation in the Middle East, international crude oil prices rose during and after the holiday in February, leading to stronger support for the cost of mixed xylene. As of February 27th, WTI04 contract settlement is 78.87 USD/barrel; Brent 05 contract settlement is $82.66 per barrel. The slight increase in the price of mixed xylene in Asia has supported the domestic market, with prices of heterogeneous grade xylene in Asia ranging from $942 to $943 per ton as of February 27th.

Relative high level mixed xylene production requires support for xylene production

The domestic supply of xylene is relatively normal, and the domestic PX operating rate remains at 8.4%. The external price of PX has slightly increased, and as of the 27th, the closing price in the Asian region is 1019-1021 yuan/ton FOB South Korea and 1044-1046 US dollars/ton CFR China.

Low level temporary stable mixed xylene demand support for phthalic anhydride production is weak

The operation of domestic phthalic anhydride units is stable, but some units are still in a shutdown state. Currently, the operating rate of phthalic anhydride in China is around 60%. During the Spring Festival, inventory consumption on site is fast, and prices of phthalic anhydride manufacturers have increased. The supply of naphthalene phthalic anhydride has slightly increased, which has affected the price of ortho phthalic anhydride.

Domestic mixed blending demand weakened during the off-season mixed xylene demand support

During the off-season of the domestic mixed blending market before and after the Spring Festival, downstream inquiries were light, and the demand for mixed xylene mixed blending weakened. In the later stage, with the increase in local refining operations, the demand for oil blending in the market is expected to recover. As of February 22, the nationwide refinery operation fluctuated narrowly around 7.1 to 7.3.

Continuous increase in mixed xylene port inventory and supply pressure still present

The continued increase in mixed xylene port inventory has put pressure on the supply side of mixed xylene. It is understood that as of February 23, the total inventory of xylene in East and South China amounted to 100800 tons, continuing to increase from 99000 tons in early February.

Market forecast: In the short term, international crude oil will fluctuate, with some support for the cost of mixed xylene. Domestic supply will continue to accumulate, and with the arrival of downstream peak season, the demand for mixed xylene is expected to increase. Overall, it is expected that mixed xylene will fluctuate and rise in the later period.

Price trend

After the holiday, the domestic PA66 market is rapidly rising. According to data monitoring from Business Society, on February 27th, the domestic PA66 mixed benchmark price was 22566.67 yuan/ton, with a price increase of 8.32% compared to before the holiday.

Cause analysis

On the cost side:

Adipic acid: The market price of adipic acid followed the upward trend of upstream pure benzene in February, and has recently hit a high level sideways. In addition, on the 23rd, international giant Langsheng sent a letter raising the price of adipic acid by 250 euros per ton. The combination of raw materials and external market support is expected to continue the rise of adipic acid market in the future.

Hexanediamine: In February, there was also news of international large factories raising prices in the hexanediamine market. At the beginning of the month, NVIDIA issued a price increase letter, increasing prices by 500 yuan/ton, promoting the strong operation of hexanediamine prices before and after the Spring Festival. On the 26th, it was announced again to raise the price by 2500 yuan/ton, and the latest price of 25000 yuan/ton will be implemented on March 1st, with a significant increase. At present, the positive news of the new price increase letter has not been fully released, coupled with the continuous tight supply of goods in the market, the bullish confidence of the industry in the future has been greatly strengthened; Overall, both costs and materials have strengthened, maintaining strong support for the PA66 market.

In terms of supply:

Since the holiday, the operating rate of domestic PA66 production lines has remained low and adjusted. Recently, the overall industry load has been around 59%, a decrease of 2% compared to the pre holiday average load. At present, the production of enterprises is at a low and stable level, and there is no accumulation of inventory. Low end supply has decreased, with clear operations for price increases. The market circulation of goods is tight, and the support from suppliers is relatively strong.

In terms of demand:

Returning from the Spring Festival holiday, after nearly ten days of resuming work, downstream enterprises of PA66 have gradually returned. However, there are still some enterprises that maintain low load production or have not yet started production, and textile, electrical and modification enterprises have not fully started stocking and consumption, and most of their procurement operations are maintained with just the necessary follow-up. On exchange trading is average, and it is expected that more demand will be released in the future. Traders follow the market and actively try to report high. The demand side has average support for PA66.

Future Market Forecast

The spot price of PA66 has been rising recently. The prices of raw materials have both strengthened, maintaining strong support for the cost of PA66. The PA66 enterprise has a low level of horizontal load, and the inventory position is also low. Terminal enterprises are gradually starting construction, and demand is gradually increasing. Overall, the main guidance for the market is on the cost side, and it is expected that PA66 will continue to operate in a relatively strong market in the short term.

1、 Price trend

According to the Commodity Analysis System of Business Society, the average price of isobutyraldehyde in the mainstream domestic market increased from 8533.33 yuan/ton at the beginning of the week to 8700 yuan/ton at the weekend, an increase of 1.95%, and the weekend price increased by 23.11% year-on-year.

2、 Market analysis

From the supply side perspective, mainstream manufacturers of isobutyraldehyde have seen a slight increase in their quotations this week, resulting in low inventory.

The propylene market has slightly increased this week, with prices rising from 6843.25 yuan/ton at the beginning of the week to 6853.25 yuan/ton over the weekend, an increase of 0.15%, and a year-on-year decrease of 8.51% over the weekend. At the beginning of the week, downstream work resumed gradually after the new year, but demand follow-up was slow, upstream goods were not smooth, and prices continued to fall. In the second half of the week, the price of propylene has dropped to a low level, and downstream profit margins have increased. The enthusiasm for entering the market has increased, and sales have improved, resulting in a rebound in propylene prices.

From the perspective of downstream demand, the market situation of new pentanediol has slightly increased, with the market price rising from 10200 yuan/ton at the beginning of the week to 10400 yuan/ton at the weekend, an increase of 1.96%, and the weekend price falling by 5.74% year-on-year. The market situation of neopentyl glycol has slightly increased, with enterprises operating at a high level and downstream demand being good, which has a positive impact on isobutyraldehyde.

3、 Future prospects

In late February, the trend of isobutyraldehyde market may fluctuate and rise. The upstream propylene market has slightly increased, with good cost support, while the downstream new pentanediol market has slightly increased. Enterprises have started operating at a high level, and downstream procurement enthusiasm is good. Business Society’s isobutyraldehyde analyst believes that in the short term, the isobutyraldehyde market may experience slight fluctuations and gains due to various factors such as supply and demand and raw materials.

Recently (2.1-2.7), the acrylonitrile market has slightly declined. According to the Commodity Market Analysis System of Shengyishe, as of February 7th, the bulk water price of acrylonitrile in the market was 9225 yuan/ton, a decrease of 0.67% from 9287 yuan/ton at the beginning of the month. At present, the mainstream price for self extraction of acrylonitrile from tanks in the market is between 9050 to 9400 yuan/ton. The price of raw material propylene has slightly increased, and the cost supports acrylonitrile; Approaching the end of the lunar calendar, the main downstream ABS started at a low level, with a small amount of inquiries about acrylonitrile; The overall supply of acrylonitrile units is loose, and the acrylonitrile market is mainly weak before the holiday.

Recently (from 2.1 to 2.7), domestic acrylonitrile units have been operating steadily with sufficient supply.

Recently (2.1-2.7), the propylene market for raw materials has slightly increased, supported by the cost of acrylonitrile. According to the Commodity Market Analysis System of Shengyishe, as of February 7th, the domestic propylene price was 6933 yuan/ton, an increase of 1.32% from 6843 yuan/ton on the 1st.

It is understood that the downstream ABS production is at a low level of 6.2% near the Spring Festival, and the demand for acrylonitrile is significantly weakening; At present, acrylic fiber factories are frequently receiving purchase orders from yarn factories at the beginning of the month, with overall low production and weak demand for acrylonitrile; The nitrile rubber plant is operating normally, with slight support for the demand for acrylonitrile; The acrylamide industry is operating at a low rate of 4.2%, and demand for acrylonitrile is weakening. Overall, the demand for acrylonitrile before the holiday was weak, and the supply of acrylonitrile was loose, resulting in a weak market consolidation.

Market forecast: Business Society’s acrylonitrile analyst believes that although the price of raw material propylene for acrylonitrile has slightly increased, the supply is still sufficient; In addition, with weak demand support, it is expected that the acrylonitrile market will continue to maintain a narrow consolidation trend before the holiday.

From January 29 to February 5, 2024, the antimony ingot market in East China slightly increased, with prices reaching 91500 yuan/ton this week, up 0.83%.

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 above chart, it can be seen that the antimony ingot market has been continuously rising in recent times.

This week, the price of European strategic small metal antimony rose, reaching $12750/ton as of February 5th, unchanged. Currently, supply is tight and the market atmosphere is strong.

The antimony ingot market has been continuously rising since mid December, reaching 91500 yuan/ton this week, and gradually slowing down after breaking through the 90000 yuan/ton mark. From the perspective of supply and demand, due to the increasing difficulty of importing antimony ore from overseas, the domestic mining supply is still tight. As the Spring Festival approaches, the comprehensive operating rate is low, and the reluctance of smelters to sell is further strengthened. The price support mentality is strong, and with the high overseas prices, the overall price support sentiment in the domestic spot market is also strong. In terms of downstream demand, as the holiday approaches, the pre holiday stocking demand has basically ended, and the current market holiday atmosphere is relatively strong. In the future, Business Society predicts that the antimony ingot market will remain temporarily stable in the short term due to the impact of the Spring Festival holiday, and will continue until the end of January. With the increase in production by antimony ingot manufacturers, there may be room for market prices to fall.

The upward trend of the antimony oxide market has slowed down this week. With the approaching Spring Festival holiday and a stronger festive atmosphere in the market, downstream replenishment has basically ended, and the antimony oxide market is temporarily stable.

Related data:

On February 4th, the base metal index was 1160 points, unchanged from yesterday, a decrease of 28.22% from the highest point in the cycle of 1616 points (2022-03-09), and an increase of 80.69% from the lowest point of 642 points on November 24th, 2015. (Note: The cycle refers to 2011-12-01 present).

On February 4th, the non-ferrous index was 1092 points, unchanged from yesterday, a decrease of 29.00% from the highest point in the cycle of 1538 points (2021-10-18), and an increase of 79.90% 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 5th week of 2024 (1.29-2.2), there were a total of 4 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 sponge titanium (0.97%), antimony (0.83%), and gold (0.79%). There are a total of 7 products with a month on month decline, and the top 3 products with the largest decline are zinc (-3.03%), tin (-2.96%), and nickel (-1.76%). The average increase and decrease this week is -0.3%.

1、 Price trend

According to the Commodity Market Analysis System of Business Society, the average price of domestic ammonium sulfate market was 883 yuan/ton on January 29th, and 880 yuan/ton on February 4th. This week, the domestic ammonium sulfate market price fell by 0.38%.

2、 Market analysis

This week, the domestic ammonium sulfate market prices have remained stable with minor fluctuations. As the Spring Festival approaches, the ammonium sulfate market has seen a decrease in inquiries and average trading on the market. Affected by snowfall in some parts of China, transportation is not smooth. As of February 4th, the mainstream market price for coking grade ammonium sulfate in Hebei Province is around 810 yuan/ton. The mainstream ex factory quotation for ammonium sulfate in Shandong region is around 890-920 yuan/ton.

3、 Future Market Forecast

According to analysts from Business Society, the price of ammonium sulfate has been stabilizing recently. The pre holiday market transaction atmosphere weakened, and downstream procurement enthusiasm weakened. It is expected that the domestic ammonium sulfate market will remain stable and operate steadily in the short term.

1、 Trend analysis

According to the monitoring of nickel prices by Business Society, nickel prices have slightly declined this week. As of February 2nd, the spot nickel quotation was 128516.67 yuan/ton, a decrease of 1.76% from the beginning of the week and a year-on-year decrease of 43.88%.

According to the weekly rise and fall chart of Business Society, nickel prices have fallen by 7 and risen by 5 in the past 12 weeks, with a slight decline in nickel prices recently.

On the macro level, the macro atmosphere has clearly turned bearish. The unexpectedly strong growth rate of US retail data in December has put pressure on expectations of early interest rate cuts, and the US dollar index has soared to a one month high.

Supply side: Capacity expansion and clearance cycle. In December 2023, the national refined nickel production reached a total of 24500 tons, a month on month increase of about 6% and a year-on-year increase of 40.57%; It is expected that the national refined nickel production will reach 23700 tons in January 2024. Major overseas nickel companies resumed production in the third quarter, with good profits and weak willingness to proactively reduce production.

In terms of demand: Some terminal industries have high prosperity, but the growth rate of demand is not as fast as supply. Alloy is the main downstream of pure nickel, and there is a very good demand for alloys in military and shipping industries. Enterprises “replenish inventory at low prices, but do not purchase at high prices.”. The demand for electroplating is relatively stable. Stainless steel inventory returned to neutral levels, and steel mills reduced production in January. The space for nickel beans used in new energy has been squeezed out. Last week, nickel prices rebounded, suppressing demand.

In summary, weak cost support and downstream buying on dips, coupled with policy uncertainty factors in the subsequent Indonesian election, have led to a more pronounced attitude of downstream buying on dips and not buying at high prices. Nickel prices have accumulated inventory for three consecutive weeks after rebounding. It is expected that nickel prices will continue to fluctuate at a low level.

According to the commodity market analysis system of Business Society, the formaldehyde market in Shandong has recently risen. At the beginning of the week, the average price of formaldehyde in Shandong was 1203.33 yuan/ton, and on the weekend, the average price of formaldehyde in Shandong was 1210.00 yuan/ton, an increase of 0.55%. The current price has dropped by 2.94% year-on-year.

formaldehyde

Recently, the price of formaldehyde in the Shandong region has slightly increased. From the above chart, it can be seen that the formaldehyde market has been mainly fluctuating slightly, with an increase this week. As of February 1st, the mainstream market price in Shandong region is 1150-1280 yuan/ton. This week, the price of raw material methanol has shown an upward trend, but downstream panel factories have poor demand, and market trading sentiment is average. Formaldehyde manufacturers are shipping normally, and the market is slightly rising with costs.

Upstream methanol situation: The domestic methanol market is operating with a narrow upward trend. During the week, there were relatively few socially available spot goods, coupled with the impact of weather and other factors on unloading speed. At the same time, the transportation cost from the northwest production area to the sales area market increased, leading to a significant increase in domestic methanol prices. As supply gradually recovers, downstream receiving sentiment is average, and the market is mainly wait-and-see.

Recently, the price of raw material methanol has risen, with good cost support. However, due to the impact of the Spring Festival holiday, the demand for on-site consumer terminals has continued to be poor, and the transaction volume in the formaldehyde market is average. Therefore, the formaldehyde analyst of the Chemical Branch of Shengyishe predicts that the formaldehyde price in Shandong will mainly fluctuate and consolidate in the near future.

In January, precious metal prices first fell and then rose, reaching a high level horizontally

According to the Commodity Market Analysis System of Business Society, as of January 31, 2024, the spot market price of gold was 481.10 yuan/gram, an increase of 0.17% compared to the spot market price of gold at the beginning of this month (January 1), which was 480.29 yuan/gram. During the month, the gold price first fell and then rose, and the overall high level fluctuated widely.

According to the Commodity Market Analysis System of Shengyishe, the average silver market price on January 31, 2024 was 5952.33 yuan/kg, a decrease of 0.25% compared to the average silver market price of 5967.33 yuan/kg at the beginning of this month (January 1).

From November 2022 to early February 2023, precious metal prices significantly increased. From March to the end of April, due to the impact of the US banking crisis, precious metal prices once again entered a period of skyrocketing. Silver prices began to fall in May, while gold remained relatively strong. In June, gold prices hit a high level and silver prices began to rise. After July, gold prices became stronger. In mid to late September, precious metal prices were affected by news from the Federal Reserve, leading to a high level correction. In October, due to geopolitical factors, the risk aversion sentiment rose and continued to rise. In early November, the high range was weak and fluctuated horizontally. At the end of the month, precious metal prices resumed, and silver saw a stronger monthly increase than gold. Silver prices slightly declined in December, while gold prices remained relatively strong. In January, precious metal gold and silver fluctuated horizontally at high levels.

Macro fundamentals for January

Overseas macro:

1. Markit’s manufacturing PMI unexpectedly expanded in January, and the service industry also rebounded.

2. The manufacturing PMI in the Eurozone rebounded beyond expectations in January, reaching a nine month high.

Domestic macro:

According to data released by the National Bureau of Statistics on January 31st, the domestic comprehensive PMI output index in January was 50.9%, an increase of 0.6 percentage points from the previous month, continuing to exceed the critical point, indicating that the overall production and operation activities of Chinese enterprises continue to expand. In January, the non manufacturing business activity index was 50.7%, an increase of 0.3 percentage points from the previous month, above the critical point, indicating that the non manufacturing industry continues to expand steadily. In January, the Purchasing Managers Index (PMI) for the manufacturing industry was 49.2%, an increase of 0.2 percentage points from the previous month, indicating a rebound in the level of manufacturing prosperity.

Logic of Precious Metals Market in January

Factors affecting the fluctuation of precious metal prices in January:

1. The policy factors of the Federal Reserve and the dynamic changes in market expectations of when the Federal Reserve will start cutting interest rates.

2. Geopolitical factors have intensified the geopolitical tension in the Middle East region.

3. Due to financial attributes, the willingness of speculative funds to take profits has increased after the price of precious metals reached a new high.

In January, we analyzed the reasons for the high level horizontal fluctuations in precious metal prices, as follows:

Negative:

The price of precious metals is already at a relatively high level, and there is a profit taking motive in the capital market.

favourable:

1. The Federal Reserve’s interest rate hike cycle is gradually coming to an end and entering a rate cut cycle, which logically favors interest free assets such as precious metals. According to CME’s “Federal Reserve Observation”, the probability of the Federal Reserve maintaining interest rates in the range of 5.25% to 5.50% in February is 97.4%, and the probability of a 25 basis point rate cut is 2.6%. The probability of maintaining interest rates unchanged by March is 33.1%, the probability of a cumulative 25 basis point cut is 65.2%, and the probability of a cumulative 50 basis point cut is 1.7%. But debt reduction has become one of the tightening policies.

2. Geopolitical factors such as the Red Sea incident provide an expectation of hedging demand on an emotional level.

In February, we believe that there is a high probability of sideways fluctuations in precious metal prices.

Geopolitical factors have led to sustained high demand for central bank purchases worldwide. It is reported that the net purchase volume of global central banks in 2023 was 1037 tons, only a decrease of 45 tons from the record breaking 1082 tons in the previous year. Geopolitical factors such as the Red Sea incident may lead to uncertainty in inflation data, and also make the future monetary policy path of European and American central banks uncertain. We preliminarily believe that the policy path may still remain ambiguous in the short term and gradually become clear after March. It is expected that there will be a high probability of sideways fluctuations in February.