Aluminum prices fluctuated sideways in July

According to the Commodity Market Analysis System of Business Society, the average price of domestic aluminum ingots in the East China market on July 28, 2023 was 18343.33 yuan/ton, a decrease of 1.11% compared to the aluminum price of 18550 yuan/ton at the beginning of the month (July 1).

In the long term, the current price is in a sideways range after a high decline, and has been fluctuating in the range of 18200 to 18500 yuan/ton in July.

Overview of Fundamentals

On the supply side, electrolytic aluminum enterprises in Yunnan Province have resumed production capacity of 1.3 million tons. Currently, 1.03 million tons have been completed in July. Due to power outsourcing and device maintenance factors, the production capacity in Sichuan Province has been reduced by about 80000 tons. At present, the production capacity is 41.9 million tons, at a relatively high level.

In terms of social inventory: As of July 27th, the social inventory of domestic electrolytic aluminum ingots was 504000 tons. The inventory accumulated slightly in the first half of July and began to be withdrawn in the second half. In July, the trend of aluminum ingot factory inventory was synchronized, and the overall inventory accumulated slightly in July, at around 40000 tons.

Import and export: According to statistics from the General Administration of Customs of China, the import volume of unwrought and rolled non-alloy aluminum in China in June 2023 was nearly 8.94 tons, an increase of 15400 tons compared to the previous month and 60900 tons compared to the previous year. From January to June, the total import volume of unalloyed aluminum in China was 485400 tons, an increase of 288200 tons year-on-year, or 146.11%.

Aluminum prices may continue to fluctuate horizontally in August

Multiple factors: Aluminum ingot inventory is still at a relatively low historical level. From a cost perspective, in terms of alumina, due to the resumption of electrolytic aluminum production capacity in Yunnan and the news that local alumina production capacity will be reduced due to mine reclamation in Henan, the short-term volatility of alumina prices is relatively strong, and cost support is slightly strengthened.

Short selling factor: Yunnan’s production is expected to release, with high production capacity and an increase in electrolytic aluminum production expected.

Uncontrollable factors: Is there a new electricity restriction policy introduced during the summer electricity peak.

The long short game intensifies, and aluminum prices may still fluctuate sideways in August.

According to the commodity market analysis system of the business community, the domestic market of Cyclohexanone continued to decline in July. From July 1 to 27, the average price of Cyclohexanone in the domestic market rose from 8071 yuan/ton to 8785 yuan/ton, up 8.85%, and the price fell 14.20% year on year.

At the beginning of the month, the raw material pure benzene was strong, and the cost pressure increased. However, the downstream still followed up on demand, and it was difficult to make a big breakthrough in the short term. The market situation of Cyclohexanone was consolidated and operated. In the middle of June, the market price of raw material pure benzene rose, the cost support was strong, the market atmosphere improved, the downstream chemical fiber and solvent were replenished as needed, and the market price of Cyclohexanone rose in a narrow range. In the latter half of the month, the market price of raw material pure benzene continued to rise, with strong cost support. The supply of Cyclohexanone is relatively small. Driven by the cost, manufacturers are reluctant to sell at low prices and actively explore the price rise. As the price rises in the downstream, the follow-up is average.

On the cost side, the domestic pure benzene market continued to rise in July. On July 27th, the benchmark price of pure benzene at Shangshang Society was 7053.83 yuan/ton, an increase of 14.07% compared to the beginning of this month (6183.83 yuan/ton). Pure benzene has followed the rise of styrene market, with strong demand in spot and recent months, and the increase has expanded. Shandong traders’ demand for inventory and replenishment has actively pursued an upward trend, driving the focus of transactions upward. The cost of Cyclohexanone is favorable.

On the supply side, the main production enterprise equipment maintenance. The short-term supply of Cyclohexanone was slightly positive.

On the demand side, the domestic Caprolactam market rose in a narrow range in July. On July 27, the benchmark price of Caprolactam in the business community was 12300.00 yuan/ton, up 1.67% compared with 12097.50 yuan/ton at the beginning of this month. Under cost pressure, the spot price of Caprolactam increases with the cost. The supply side gradually recovered, and the spot market of Caprolactam increased. The demand side of Cyclohexanone is favorable.

In the future market forecast, pure benzene will operate at a high level, with good cost support. The downstream will follow up as required. Cyclohexanone analysts from the business society predict that the short-term domestic Cyclohexanone market will operate at a high level.

Aluminum prices moved down on July 26th

According to the Commodity Market Analysis System of Business Society, the average price of domestic aluminum ingots in the East China market was 18346.67 yuan/ton on July 26, 2023, with a daily increase of 0.05%.

In the long term, the current price is in the sideways range after a high price decline, and has been fluctuating in the range of 18200 to 18600 yuan/ton.

Overview of Fundamentals

Supply side: During the rainy season in southwestern China, with the lifting of power load restrictions in Yunnan, it is expected that 1 to 1.3 million tons of production capacity will resume production. As Yunnan continues to promote the resumption process, the impact of power restrictions in Sichuan is temporarily limited, and there are expectations of an increase in domestic electrolytic aluminum supply.

On the demand side: The overall consumption trend continues in the off-season, and the weekly operating rate of downstream processing enterprises is expected to decrease month on month. It is likely that there will be no significant improvement near the off-season in the future. The overall weakness of terminal real estate is still weak, but there is support for the completion end of the short-term insured delivery policy, with weak data on new construction projects, and stronger demand for aluminum downstream in the near term than in the long term; Looking forward to the growth of new energy vehicles, photovoltaic, and ultra-high voltage industries in the later stage.

High probability of aluminum price crossing

Aluminum ingot inventory is still at a historical low level, and Yunnan production is expected to release. From a cost perspective, in terms of alumina, due to the resumption of electrolytic aluminum production capacity in Yunnan and the news that local alumina production capacity will be reduced due to mine reclamation in Henan, the short-term volatility of alumina prices is relatively strong, and the cost support is slightly strengthened. Short term supply pressure may become prominent at the end of July, and it is expected that the social inventory of aluminum ingots will accumulate in July. Short term aluminum prices will move sideways around the 18300 price range.

According to data monitored by Business Society, as of July 25th, the average price of domestic industrial grade premium cyclohexane was 6400 yuan/ton, which is stable compared to the same period last week. The overall market supply and demand are balanced, and shipments are currently slow.

This week, the market price of cyclohexane has been operating in a narrow range, with the mainstream price around 6600 yuan/ton. Compared to the same period last week, the price has remained stable, with mainstream manufacturers maintaining a quotation range of around 6400 yuan/ton. The operating rate is stable, and downstream demand procurement is the main focus. The negotiation atmosphere is flat.

Chemical Index: On July 24th, the chemical index stood at 828 points, an increase of 2 points compared to yesterday, a decrease of 40.86% from the highest point in the cycle of 1400 points (2021-10-23), and an increase of 38.46% from the lowest point of 598 points on April 8th, 2020. (Note: The cycle refers to the period from December 1st, 2011 to the present)

Cyclohexane analysts from Business Society believe that in the short term, the stable operation of the cyclohexane market is the main trend, with a narrow range being weak.

Acetic anhydride prices fluctuated and consolidated this week

According to the Commodity Market Analysis System of the Business Society, as of July 24th, the price of acetic anhydride was 5187.50 yuan/ton, which has stabilized compared to the fluctuation of 5187.50 yuan/ton on July 16th last weekend; The price of acetic anhydride increased by 3.75% compared to 5000 yuan/ton on July 1st. The price of raw material acetic acid has decreased, the cost of acetic anhydride has decreased, the production of acetic anhydride manufacturers has stabilized, the supply of acetic anhydride has stabilized, and the price of acetic anhydride has fluctuated and stabilized.

Acetic acid prices rose first and then fell this week

According to the market analysis system of acetic acid products in the Business Society, as of July 24th, the price of acetic acid was 3133.33 yuan/ton, a decrease of 2.08% compared to the 3200 yuan/ton price on July 16th last weekend; Compared to July 1st, the price of acetic acid increased by 8.67% to 2883.33 yuan/ton. Acetic acid enterprises have recovered, the supply of acetic acid has increased, and demand has stabilized. The price of acetic acid has first increased and then decreased, and the cost of acetic anhydride has decreased. In the future, the downward pressure on acetic anhydride will increase.

Future prospects

Analysts from the Business Society Acetic Anhydride Data believe that in terms of cost, acetic acid companies have resumed production, with a slight increase in acetic acid supply, while demand side production has remained stable, resulting in a decline in the overall acetic acid market; In terms of production, some acetic anhydride manufacturers have temporarily stabilized, and the supply of acetic anhydride is stabilizing. However, downstream production has temporarily stabilized, and demand is stable. There is still momentum for the rise of acetic anhydride. Overall, the cost of acetic anhydride has decreased and the supply is stabilizing. It is expected that the price of acetic anhydride will fluctuate and weaken in the future.

1、 Price trend

According to the commodity market analysis system of the business community, the average price of domestic liquid Caprolactam was 12162 yuan/ton on July 17, and the average price of domestic liquid Caprolactam was 12237 yuan/ton on July 21. The price of Caprolactam rose 0.62% this week.

2、 Market analysis

Caprolactam market prices rose this week. This week, the price of pure benzene, the raw material, has increased, providing positive cost support. Under cost pressure, the spot price of Caprolactam increases with the cost. The supply side gradually recovered, and the spot market of Caprolactam increased. Downstream procurement is mainly based on demand, and terminal follow-up is average.

The price of raw material pure benzene has slightly increased this week. On July 17th, the price of pure benzene was 6792 yuan/ton. On Friday (July 21st), the price of pure benzene was 6901 yuan/ton, an increase of 7.89% compared to last week and a decrease of 23.53% compared to the same period last year. This week, the price of Sinopec pure benzene remained stable at 6800 yuan/ton.

3、 Future Market Forecast

Caprolactam analysts from the business community believe that the price of raw material pure benzene has risen sharply recently. Affected by the cost boost, the market trend of Caprolactam has risen, and the terminal demand has followed up on demand. The Caprolactam market is expected to rise in the short term due to favorable market factors.

According to the Commodity Market Analysis System of the Business Society, the price index of the domestic rare earth market has shown an upward trend, while the domestic heavy rare earth market has shown an upward trend. On July 17, the rare earth index reached 444 points, an increase of 3 points from yesterday, a decrease of 55.91% from the highest point of 1007 points in the cycle (2022-02-24), and an increase of 63.84% from the lowest point of 271 points on September 13, 2015. (Note: The cycle refers to the period from December 1st, 2011 to the present)

The price of Dysprosium(III) oxide, dysprosium ferroalloy and dysprosium metal in China has been rising. As of the 18th, the price of Dysprosium(III) oxide was 2.23 million yuan/ton, with an increase of 11.50% in the middle of the year; The price of dysprosium iron alloy is 2.165 million yuan/ton, with a price increase of 9.07% in the middle of the year; The price of dysprosium metal is 2.86 million yuan/ton, with a price increase of 7.52% in the middle of the year; The domestic price of terbium series is mainly increasing, with the domestic price of terbium oxide reaching 7.225 million yuan/ton and the price of metallic terbium reaching 9.05 million yuan/ton.

In the middle of the year, the prices of heavy rare earths in the market rose rapidly. Recently, there has been an increase in inquiries, coupled with a tightening of spot supply. Affected by a slight increase in demand, the domestic heavy rare earths market prices have risen. The domestic heavy rare earth market is relatively active in terms of inquiry and quotation, with a slight increase in trading volume. In addition, with the arrival of long-term cooperative orders in the middle of the month, it is difficult to find low-priced sources of heavy rare earth goods, and the quotations of holding merchants continue to rise. However, with an increase in rare earth mines from Southeast Asia and an increase in the supply of heavy rare earths, there is still a wait-and-see sentiment in the rare earth market.

According to statistics, the production and sales of new energy vehicles in June completed 784000 and 806000 units respectively, with a month on month increase of 9.9% and 12.5%, and a year-on-year increase of 32.8% and 35.2%, respectively. From January to June, the production and sales of new energy vehicles reached 3.788 million and 3.747 million respectively, with year-on-year growth of 42.4% and 44.1%, respectively. Recently, the country has accelerated the construction of charging infrastructure to better support the entry of new energy vehicles into rural areas, which is conducive to unleashing the consumption potential of rural areas, increasing the sales of new energy vehicles, and increasing the production and sales of new energy vehicles, which is beneficial for the domestic prices of medium and heavy rare earths.

After years of governance, the domestic rare earth industry has gradually formed a supply pattern with large groups as the main body and relatively concentrated raw materials. With the continuous development of the foreign rare earth industry, China’s share of rare earth production has decreased from 90% to 70%. According to statistics, China’s rare earth export data for June was 5008.9 tons, a year-on-year increase of 9.4%; From January to June 2023, a total of 26236.1 tons of rare earth commodities were exported, a year-on-year increase of 0.03%. The export volume of rare earth commodities in China increased, which correspondingly increased the market prices of heavy rare earths.

Future forecast: In the near future, the supply of rare earth production enterprises is normal, with a slight increase in downstream demand. It is expected that the prices of heavy rare earth markets will mainly rise in the short term, and there will be a lack of primary and renewable supply sources in the medium to long term. Dysprosium and terbium oxides will also face shortages. In addition, driven by emerging and traditional demands such as energy-saving motors, industrial robots, wind power, variable frequency air conditioning, and consumer electronics, the global demand for rare earth permanent magnets is expected to continue to grow.

This week (7.10-14), domestic Adipic acid stabilized and recovered. According to the commodity market analysis system of the business community, as of July 14, the weekly increase of Adipic acid was 0.67%. The market trading center has risen by around 100 yuan/ton. At present, the quotation range of Adipic acid market is 8900-9200 yuan/ton. The main reason is the combination of favorable cost and reduced supply.

Industrial chain

The figure above shows that this week, the upstream and downstream products of the Adipic acid industry chain turned red, the upstream raw material side improved significantly, and the raw materials rose across the whole line, especially the pure benzene. The main downstream product PA66 has stopped falling and stabilized, with demand for a rebound in prices.

Cost side: Overall favorable raw material costs

This week, crude oil continued to rise, bringing certain benefits to the domestic petrochemical market. The price of pure benzene in China has increased significantly. According to the Commodity Market Analysis System of Business Society, the weekly increase in pure benzene is nearly 5%.. The quotation of the main refinery has been significantly increased. Some ethylbenzene and Caprolactam devices in the downstream of Shandong market were started, and the demand for pure benzene was significantly increased; By the end of the week, the spot trading range in East China was 6350-6600 yuan/ton. The price of Cyclohexanone also rebounded, with a weekly increase of nearly 1%. In terms of cost, the recovery of upstream raw material market has boosted Adipic acid.

Supply side: The parking supply for enterprise equipment has been tightened

From the perspective of market supply: in terms of devices, the operating rate of Adipic acid has declined this week. About 60% will be maintained, and the prices of major manufacturers will be partially increased this week. The parking of Haili Equipment has brought benefits to market supply, and the decrease in supply has made manufacturers more effective in boosting the market. The improvement of supply is an important reason for the price of Adipic acid to recover. However, there has been little improvement on the demand side, and the upward trend has been suppressed.

On the demand side: it is difficult to form a strong boost on the demand side

The downstream of Adipic acid is relatively depressed. Terminal procurement maintains a rigid demand. Taking PA66 as an example, although prices have bottomed out and stabilized this week, there is no sign of a rebound in the market. According to the Commodity Market Analysis System of the Business Society, the increase and decrease of PA66 this week was 0. At the weekend, the market price of PA66 in Zhejiang is between 19500 to 19800 yuan/ton. In addition, some devices of Caprolactam in other downstream areas were restarted, and the demand was slightly improved. However, when TPU entered the slack season of the industry, the decrease of orders and the difficulty in improving demand were the fundamental reasons that restricted the price rebound of Adipic acid.

Future prospects

With regard to the future market, Adipic acid analysts from the business community believe that the current cost side is mostly good. On the one hand, crude oil continues to run strongly, and on the other hand, pure benzene is still in the upward phase. The factory shows a clear willingness to support the market, and the supply side will still maintain a moderately tight pattern, which will continue to support the price rise of Adipic acid. Considering the constraints on the demand side, it is expected that the increase of Adipic acid will be limited.

According to the Commodity Market Analysis System of the Business Society, the formaldehyde market in Shandong has recently risen. At the beginning of the week, the average price of formaldehyde in Shandong was 1076.67 yuan/ton, and at the end of the week, the average price of formaldehyde in Shandong was 1110.00 yuan/ton, an increase of 3.10%. The current price has decreased by 8.52% compared to last year.

formaldehyde

Recently, the price of formaldehyde in the Shandong region has been relatively stable and rising. From the above chart, it can be seen that the recent formaldehyde market has mainly fluctuated slightly, with a weekly increase or decrease of no more than 2%. This week’s market has slightly increased. As of July 14th, the mainstream market price in Shandong region is 1020-1160 yuan/ton. This week, the price of raw material methanol stabilized after rising, while downstream off-season procurement remained in demand. Formaldehyde was mainly driven by rising costs, with a slight increase in the market.

 
Upstream methanol situation: The domestic methanol market situation has been sorted out. The ex factory price of methanol in the southern region of Shandong is referenced to be around 2310-2330 yuan/ton in cash exchange, while the delivery price in Linyi is referenced to be around 2350-2360 yuan/ton in cash exchange. The local methanol factory in central Shandong offers a price of 2400-2400 yuan/ton for self delivery. The negotiated price range for methanol in the Dongying region of Shandong is 2280-2280 yuan/ton.

After the recent rise in methanol prices, it has temporarily stabilized. However, downstream sheet metal factories have had poor operating rates due to high temperatures, and their acceptance of goods is not high, resulting in poor transactions on the market. Therefore, formaldehyde analysts from the Chemical Branch of the Business Society predict that formaldehyde prices in Shandong will mainly fluctuate and fall in the near future.

According to data monitored by Business Society, as of July 12th, the average price quoted by domestic premium DMF enterprises was 4625 yuan/ton. This week, the DMF price showed a narrow and weak trend, falling by 2.12% in the week. Currently, the mainstream price is around 4600 yuan/ton.

This week, the overall market performance of DMF is mainly weak, with prices falling by 2.12% compared to the same period last week. Currently, the mainstream price range is 4600.00 yuan/ton, and the downstream procurement atmosphere is average. Upstream cost support is insufficient, shipments are slow, manufacturers are giving up profits and taking orders, and inventory is running high.

Chemical Index: On July 11th, the chemical index stood at 807 points, an increase of 1 point compared to yesterday, a decrease of 42.36% from the highest point in the cycle of 1400 points (2021-10-23), and a rise of 34.95% from the lowest point of 598 points on April 8th, 2020. (Note: The cycle refers to the period from December 1st, 2011 to the present).

DMF analysts from Business Society believe that in the short term, the DMF market will operate steadily and weakly.