Domestic price trend of xylene:

 

According to the Commodity Market Analysis System of the Business Society, the price trend has increased this week. As of the weekend, the factory price of xylene in China was 9300 yuan/ton, an increase of 2.20% from the beginning of the week’s price of 9100 yuan/ton, and a year-on-year increase of 5.68%.

 

The domestic supply of paraxylene is normal, with a domestic PX operating rate of over 70%. However, during the maintenance of some paraxylene units, spot supply is relatively normal, and PX external prices have risen due to the rise in crude oil. As of the 7th, the closing prices in Asia were 1081-1083 yuan/ton FOB Korea and 1106-1108 US dollars/ton CFR China. Recently, the operating rate of PX devices in Asia has been mainly fluctuating. Overall, the operating rate of xylene devices in the Asian region is around 70%. The supply of PX goods in the Asian region has not changed much, and due to the rise in crude oil prices, the domestic xylene market price has risen.

 

This week’s crude oil price trend has risen, with the settlement price of the main contract for WTI crude oil futures in the United States reaching $86.87 per barrel as of the 7th, and the settlement price of the main contract for Brent crude oil futures reaching $89.92 per barrel. Recently, there have been rumors of OPEC+extending production cuts in oil producing countries. The market expects an additional 1 million barrels of production reduction in Saudi Arabia to continue until December, while Russia’s crude oil production reduction will continue until December. Supply tightening is expected to continue to ferment and boost the oil market; In addition, the weakening of the US dollar has led to a rebound in oil market valuations and the potential impact of storms in the US Gulf on energy supply. Positive factors support international oil prices, which has affected the upward trend of the domestic xylene market.

 

This week, the downstream PTA market price fluctuated at a high level, with an average PTA market price of around 6200 yuan/ton as of the 8th. The price has not changed much this week. PTA supply has slightly increased, with PTA operating rates maintaining around 83% this week. PTA factory inventory has slightly declined, and PTA market prices remain high. The peak season of textile demand is approaching, and the market still has expectations for demand. However, the procurement of terminal textile enterprises has not shown the enthusiastic situation before the peak season, especially in the context of uncertain export demand for textile clothing. The actual boost still needs to be observed. The downstream PTA market has a high price, while PX prices have slightly increased.

 

Chen Ling, an analyst at Business Society PX, believes that the current long short game in the crude oil market has led to a strong trend in crude oil prices in the short term, while the downstream PTA market remains at a high level. In addition, the peak season for textile demand is approaching, but the demand for textile exports is uncertain. Overall, it is expected that the price trend in the xylene market will remain stable in the later stage.

 

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According to the Commodity Market Analysis System of the Business Society, as of September 7th, the average price quoted by epichlorohydrin enterprises was 8275.00 yuan/ton, an increase of 0.61% compared to September 1st and a decrease of 28.04% compared to the same period last year.

 

Since September, the market for epichlorohydrin has been operating steadily. Recently, the price of raw material glycerol has been mainly stable, while the price of raw material propylene is high. The cost support is strong, and the industry’s capacity utilization rate is below 50%. At the beginning of the month, the supply side is tight, supporting manufacturers’ price mentality. Downstream companies mainly need to follow up, with a strong cautious wait-and-see attitude. On the 7th, the mainstream negotiations in the Shandong epichlorohydrin market were around 8200-8400 yuan/ton.

 

Upstream propylene, according to the Commodity Market Analysis System of Business Society, on September 6th, the reference price for propylene was 7288.25, an increase of 2.46% compared to September 1st (7113.25).

 

Downstream epoxy resin, according to the Commodity Market Analysis System of Business Society, the reference price of epoxy resin on September 6th was 14366.67, a decrease of 0.69% compared to September 1st (14466.67).

 

Analysts from Business Society’s epichlorohydrin believe that cost support is still present, and factory inventory is currently not under pressure. However, supply is expected to increase, and downstream companies are cautious in following up. It is expected that the epichlorohydrin market may operate at a high level in the short term, and more attention still needs to be paid to changes in the supply side of the market.

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According to monitoring data from Business Society, as of September 6, 2023, the reference price of n-butanol in the Shandong region of China was 9833 yuan/ton. Compared with September 1 (the reference price of n-butanol was 9800 yuan/ton), the price was reduced by 33 yuan/ton, a decrease of 0.34%.

 

From the data monitoring chart of the Business Society, it can be seen that in early September (9.1-9.6), the overall market situation of n-butanol in the Shandong region of China showed a slight increase and then a decline. In the first three days of the month, the n-butanol market in Shandong region remained stable and consolidated overall, with relatively calm supply and demand on the market. On the 4th, prices in some low-end markets in Shandong region slightly increased, while low prices on the market decreased. On the 5th, downstream demand and stocking basically ended, with an increase in n-butanol on-site supply and loose supply and demand support. The n-butanol market started a slight downward trend, and the overall market price was lowered by about 100 yuan/ton. As of September 6th, the domestic Shandong n-butanol market price reference was around 9600-10000 yuan/ton.

 

Aftermarket analysis of n-butanol

 

At present, the trading atmosphere of n-butanol on the market is quiet, and downstream demand is mainly cautious. The overall market is weak and mainly organized and operated. Business Society’s n-butanol data analyst predicts that in the short term, the domestic Shandong region’s n-butanol market will mainly adjust and operate in a narrow range. The specific trend still needs to pay more attention to specific news changes on the supply and demand side.

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According to the Commodity Market Analysis System of the Business Society, the asphalt market is fluctuating and rising. From August 29th to September 5th, the price of asphalt in Shandong region increased from 3726 yuan/ton to 3779 yuan/ton, an increase of 1.43%, a month on month decrease of 0.79%, and a year-on-year decrease of 15.58%. The market trend of asphalt varies slightly among different regions, with some regions experiencing a tightening of spot resources and the market rising; Some regions are affected by cloudy and rainy weather, resulting in slightly weak demand and a decline in the market. The short-term domestic asphalt market is mainly characterized by fluctuations and consolidation.

 

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On the supply side, the main production enterprises have stabilized production, driving an overall increase in supply in the area. The comprehensive operating rate of the asphalt industry has increased month on month, with negative impacts on the supply side.

 

On the cost side, in terms of crude oil, the international crude oil price is fluctuating and rising, and the expectation of supply tightening continues to ferment and boost the oil market. As of September 4th, the settlement price of the Brent crude oil futures main contract was at $88.55 per barrel, an increase of $0.45 or 0.51%.

 

On the demand side, the demand for asphalt in the market is relatively flat, with varying demand in different regions. The market has slowly recovered in the early stages of demand, and demand in some regions has gradually increased. However, some regions are still difficult to show significant improvement due to the impact of rainfall. The demand side of the asphalt market has a relatively stable impact.

 

As of the close of September 5th, the oil asphalt futures market has risen. The main asphalt contract 2311 opened at 3800 yuan/ton, with a maximum price of 3921 yuan/ton and a minimum price of 3796 yuan/ton. It closed at 3991 yuan/ton in the end, an increase of 84 yuan/ton or 2.21% compared to the previous trading day. The trading volume is 541168 lots, the position is 295029 lots, and the daily increase is 42406.

 

In the future, it is predicted that the strong operation of international crude oil will boost the sentiment of asphalt procurement, while the overall supply will remain stable and slightly increase. Downstream demand may be affected by rainfall due to typhoons, which may be hindered. Business Society asphalt analysts predict that the short-term domestic asphalt market will be mainly volatile and organized.

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According to data monitored by Business Society, as of August 31st, the price of high-quality power type lithium iron phosphate was 80000 yuan/ton, a decrease of 15.34% compared to the same period last month. Currently, the mainstream price is around 80000 yuan/ton, with a price of 94500 yuan/ton in early August and 80000 yuan/ton at the end of August. The overall market supply and demand balance is limited, with limited new customer transactions and contract customers being the main customers.

 

In August, the price of lithium iron phosphate mainly experienced a narrow downward trend, with a slight decrease in price. At the beginning of August, the price was 94500 yuan/ton, and as of the end of August, the price was 80000 yuan/ton. Downstream restocking was on demand, and the willingness to stock up was average. Upstream lithium carbonate operated in a narrow range and was weak. Currently, the demand for lithium carbonate in the market is abundant and there is no price in the market. In the short term, lithium carbonate is weak and operating under pressure.

 

Commodity index: On August 29, the chemical index stood at 921 points, an increase of 4 points compared to yesterday, a decrease of 34.21% from the highest point in the cycle of 1400 points (2021-10-23), and an increase of 54.01% from the lowest point of 598 points on April 8, 2020. (Note: The cycle refers to the period from December 1st, 2011 to the present)

 

Analysts from Business Society believe that the lithium iron phosphate market will operate steadily and weakly in the short term.

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Cobalt prices fluctuated and fell in August

 

According to the Commodity Market Analysis System of Business Society, as of August 31, the cobalt price was 249200 yuan/ton, a decrease of 12.65% compared to the cobalt price of 285300 yuan/ton on August 1. The arrival of cobalt raw materials in Hong Kong has decreased, the supply of cobalt in the market has decreased, the sales of new energy vehicles have decreased, the sales of mobile phones have decreased, the demand for cobalt in the market has decreased, and the supply and demand in the cobalt market are weak. Cobalt prices fluctuated and fell in August.

 

The import volume of cobalt raw materials has decreased

 

According to the latest data from Customs website, the total import volume of cobalt raw materials in China was 6700 tons of metal tons in July 2023, a decrease of 24% month on month and 33% year on year. From January to July 2023, the total import volume of cobalt raw materials in China was 63500 tons of metal tons, an increase of 39% year-on-year. In May, South Africa was affected by hurricanes and rainstorm, and its transportation capacity was tight. The overall shipment of cobalt raw materials was delayed. Most of the cobalt raw materials arrived at the port from July to August, and the number of cobalt raw materials arrived at the port in June was reduced. The number of cobalt raw materials arrived at the port in July was significantly reduced. In August, the number of cobalt raw materials arrived at the port was warmer, but it was still reduced on a year-on-year basis. In July, the import volume of cobalt raw materials in China decreased both month on month, resulting in a decrease in cobalt market supply.

 

According to the financial report data disclosed by Luoyang Molybdenum Industry at the first half of 2023 performance briefing, the production of KFM cobalt metal in the first half of the year was 9264 tons. In the first quarter, KFM produced 102 tons of cobalt. The average annual design production capacity of the KFM project is 30000 tons of cobalt metal. In 2023, KFM production guidelines are 24000 to 30000 tons of cobalt. The cobalt metal production of Luoyang Molybdenum Industry increased significantly in the second quarter. With the stable operation of the KFM project, the cobalt metal production of Luoyang Molybdenum Industry is expected to increase in the second half of the year, and the supply of cobalt in the future market is expected to rise significantly.

 

Declining demand in cobalt market

 

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According to data released by the China Association of Automobile Manufacturers, in July, the sales of new energy vehicles in China reached 780000 units, a year-on-year increase of 31.6% and a month on month decrease of 3.23%. July is the off-season of the traditional car market, and the pace of production and sales has slowed down. The overall market performance is relatively flat, with a year-on-year decline. New energy vehicles and automobile exports continue to develop well, but sales have slightly decreased compared to June month on month. The sales of new energy vehicles have declined, and the demand for cobalt in the market has declined.

 

According to data released by the China Automotive Power Battery Industry Innovation Alliance, in terms of production, in July, China’s power battery production totaled 61.0 GWh, a year-on-year increase of 28.9% and a month on month increase of 1.5%. Among them, the production of ternary batteries was 20.4GWh, an increase of 17.2% year-on-year and 15.2% month on month; In terms of loading volume, in July, China’s power battery loading volume was 32.2GWh, a year-on-year increase of 33.3% and a month on month decrease of 2.0%. The installed capacity of ternary batteries was 10.6GWh, an increase of 7.4% year-on-year and 4.8% month on month. In July, the production and loading of ternary batteries showed varying degrees of increase compared to the same month on month, and the increase in ternary batteries was significantly higher than that of power batteries. The demand for ternary batteries rebounded, and the support for cobalt demand from ternary batteries still exists.

According to data released by the China Academy of Information and Communications Technology, in June 2023, the shipment volume of mobile phones in the domestic market was 22.149 million units, a year-on-year decrease of 20.9%. From January to June 2023, the total shipment volume of mobile phones in the domestic market was 130 million units, a year-on-year decrease of 4.8%. The domestic shipment volume has decreased, and the demand for cobalt in the market has declined.

 

According to a research report released by Canalys, in the second quarter of 2023, the shipment volume of smartphones in Southeast Asia decreased by 15% year-on-year to 20.9 million units, setting a new low since 2014. The global smartphone shipment volume in the first quarter of 2023 was approximately 269.8 billion units, a year-on-year decrease of 13%; In the second quarter, the global smartphone shipment volume was approximately 258.2 billion units, a year-on-year decrease of 10%. Global mobile phone shipments have decreased, but the slowdown in shipments in the second quarter has strengthened expectations for a rebound in the future mobile phone market.

 

According to a report released by IDC, it is estimated that global smartphone shipments in 2023 will reach 1.15 billion units, a year-on-year decrease of 4.7%, reaching a new low in a decade. Although IDC has lowered its smartphone shipments in 2023, it is predicted that there will be a recovery in 2024, achieving a year-on-year growth of 4.5%. The introduction of national policies to stimulate electronic product consumption has led to an improvement in the “severe cold” situation of the smartphone market in the first half of 2023, and multiple smartphone manufacturers have raised their shipping volume targets. The public opinion of “the recovery of the mobile phone market” is gradually fermenting, and the future mobile phone market may “drive the cold and recover”.

 

Overview and outlook

 

According to Bai Jiaxin, a data analyst at Business Society, the supply and demand in the cobalt market were weak in August, leading to a significant decline in cobalt prices. But as cobalt prices fall below the 250000 yuan mark and metal cobalt prices touch the cost line, cobalt smelting manufacturers have strengthened their willingness to stand up, and there is limited room for cobalt prices to fall. In terms of supply, the production of cobalt metal enterprises in Luoyang Molybdenum Industry is expected to increase significantly, and the arrival of cobalt raw materials, which have been affected by South African transportation capacity, is expected to recover, leading to a significant increase in cobalt market supply; In terms of demand, with the arrival of the traditional peak season, the sales of new energy vehicles are expected to rebound, and the installation volume of ternary batteries has increased compared to the same period last month. The favorable policies stimulate the consumption of the mobile phone market, and the demand in the cobalt market is expected to increase. Overall, the supply and demand expectations for cobalt in the future market are expected to double, and with cost support, cobalt prices may rebound from the bottom.

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Aluminum prices exceeded 19000 yuan/ton in August

 

According to the Commodity Market Analysis System of Business Society, as of August 31, 2023, the average price of domestic aluminum ingots in the East China market was 19173.33 yuan/ton, an increase of 0.68% compared to the previous trading day and 18596.67 yuan/ton, an increase of 3.10% compared to the beginning of the month (August 1).

 

In the long term, the current price is in a sideways range after a high decline, and has been fluctuating below 19000 yuan/ton since May, currently exceeding 19000 yuan/ton.

 

Positive policies

 

The Implementation Plan for Carbon Peak in the Industrial Sector of Yunnan Province shows that in order to prevent blind expansion of production capacity in the electrolytic aluminum industry, the policy of capacity replacement is strictly implemented.

 

Overview of Fundamentals

 

Enhanced raw material benefits:

 

The continuous production restrictions in the Sanmenxia area of Henan Province, coupled with the planned restart of an aluminum oxide enterprise in Inner Mongolia, involve a production capacity of approximately 500000 tons. The routine equipment maintenance work of some aluminum oxide enterprises in Shandong and southwestern regions, as well as the increase in overseas bauxite prices, have jointly exacerbated the problem of tight supply of bauxite. The cost of aluminum oxide has increased, and the price of aluminum oxide has been firm.

 

2. Steam coal is affected by news and has positive support in the short term.

 

Increased pressure on the supply side

 

Supply side: With the resumption of production by electrolytic aluminum enterprises in the southwest region, the current production capacity is at a relatively high level. At present, the resumption of production in Yunnan region has come to an end. Although the current production capacity is relatively high, the proportion of aluminum water is still high, and the supply of aluminum ingots is still tight. The production of electrolytic aluminum in July was 3.481 million tons, a year-on-year increase of 1.5%; The cumulative production from January to July was 23.618 million tons, a year-on-year increase of 2.8%. In August, with the release of production capacity in the Yunnan region, there are still expectations of production capacity growth.

 

Good inventory performance

 

In terms of social inventory, following the start of destocking in the second half of July, inventory is relatively low. As of August 28th, the mainstream social inventory of electrolytic aluminum ingots in China was 457000 tons, which was 506000 tons compared to July 31st, and 49000 tons were removed from inventory. The inventory accumulated slightly on a weekly basis, but the year-on-year data shows that it is still at a low level in the same period of the past five years.

 

Poor export data

 

Import and export: According to statistics from the General Administration of Customs of China, in July 2023, China exported 489700 tons of unwrought aluminum and aluminum products, a year-on-year decrease of 24.9%; From January to July, the cumulative export volume was 3.2964 million tons, a year-on-year decrease of 20.7%. In July, China imported 231400 tons of unwrought aluminum and aluminum products, a year-on-year increase of 20.1%; From January to July, the cumulative import volume was 1.4319 million tons, a year-on-year increase of 12.2%.

 

The demand has slightly decreased compared to the previous month, and the value is relatively good

 

The weekly operating rate of downstream processing enterprises has slightly increased compared to the previous month, and the profile sector has slightly improved.

 

Terminal demand side: In July, world car sales reached 7.15 million units, a year-on-year increase of 6%, still slightly lower than July 2018 by 2%. From January to July, world car sales reached 49.6 million units, a year-on-year increase of 10%.

Future market forecast

 

At present, the production capacity of electrolytic aluminum is operating at a high level, but the high aluminum water ratio has led to a low mainstream inventory of aluminum ingots in society, and the spot supply of aluminum ingots is relatively tight. The price of raw alumina is strong, and the relatively strong downstream demand is also supporting the upward trend of aluminum prices. It is expected that aluminum prices will experience strong fluctuations in the short term.

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