Trend analysis

According to the monitoring data of the business community, the copper price in October showed a wide fluctuation trend. The copper price was 62670 yuan/ton at the beginning of the month, and rose to 64638.33 yuan/ton at the end of the month, with an overall increase of 3.14% and a year-on-year decrease of 8.62%.

According to the current chart of the business community, in October, the spot price of copper was higher than the futures price. The main contract was the expected price two months later. Near the end of the month, the main basis difference became smaller, which was good for buying hedging.

According to LME inventory, LME copper inventory rose first and then fell in October, higher than that in September.

Macro: In October, the European Central Bank raised three major interest rates by 75 basis points. The Federal Reserve announced its September interest rate resolution as scheduled, raising interest rates by another 75 basis points. The US reported that the CPI in September was the focus of the financial market. The CPI rose 8.2% in September, down 0.1 percentage points from the previous month.

On the supply side: the risk of supply disturbance still exists. LME discussed the possibility of banning Russian metal trading, and this is the focus of LME annual meeting. The supply of copper concentrate is loose, and the processing cost of spot concentrate continues to increase, which has now exceeded 80 dollars, slightly better than the 70-75 dollars in the first half of the year. The new production capacity was put into operation. The domestic refined copper output in September was 909000 tons, up 6% month on month and 13% year on year. The supply pressure gradually increased in the later period.

Demand: In September, more than 1.5 trillion yuan of infrastructure projects were intensively started, infrastructure investment was further boosted, and infrastructure in the fourth quarter is expected to enter a new round of construction strengthening stage. The investment in electricity and new energy vehicles continued to grow at a high speed, especially in solar and wind power; Household appliances remained flat on the whole, with a slight positive increase in the output of air conditioners; The real estate continued to grow negatively, and there was no sign of stabilization.

To sum up, the weak US economic data boosted the expectation that the Federal Reserve would slow down its interest rate hike position, and the dollar index fell to a new low in nearly a month, improving the macro atmosphere. The supply of copper concentrate in China is becoming increasingly loose, and downstream enterprises are still afraid of high prices, further limiting the rise of copper prices. November is the traditional slack season in China, and the demand may be limited. However, the possibility that LME may ban Russian metals greatly supports copper prices. It is expected that copper prices in November will continue to operate mainly in a wide range of shocks.

Domestic price trend:

It can be seen from the trend chart of paraxylene that the price of paraxylene rose in October. As of the end of the month, the domestic ex factory price of paraxylene was 9300 yuan/ton, 3.33% higher than the price of 9000 yuan/ton at the beginning of the month, up 27.40% year on year.

In October, the supply of paraxylene was normal, the domestic PX operating rate was more than 60%, the 600000 ton unit of Sinochem Hongrun Petrochemical was operating stably, the unit of Yangzi Petrochemical was operating stably, the unit of Pengzhou Petrochemical was operating stably, the PX unit of Yangzi Petrochemical was operating normally, the unit of Jinling Petrochemical was operating stably, the unit of Qingdao Lidong was operating at full load, the unit of Qilu Petrochemical was operating stably, the unit of Urumqi Petrochemical was operating at about 50%, and the domestic paraxylene supply was normal, The commencement of overseas units was normal, and the domestic price of paraxylene rose slightly. In October, the international crude oil price rose sharply, while the PX external market price declined slightly. As of the 28th, the closing price was 943-945 US dollars/ton FOB South Korea and 961-963 US dollars/ton CFR China. Recently, the operating rate of PX units in Asia has maintained. On the whole, the operating rate of paraxylene units in Asia is less than 60%. The supply of PX goods in Asia is normal, and the domestic paraxylene market has risen slightly.

In October, the international crude oil price rose by 10.58%. As of the end of the month, the settlement price of the main contract of WTI crude oil futures in the United States was 87.90 dollars/barrel, and the settlement price of the main contract of Brent crude oil futures was 95.77 dollars/barrel. During the National Day, the 33rd Ministerial Conference of OPEC+decided to reduce OPEC+’s total average daily output of crude oil by 2 million barrels from the required daily output level in August 2022. Affected by the news of production reduction, the price of crude oil market rose sharply. As the negative pressure on the economy was difficult to ease, the World Bank and the IMF (International Monetary Fund) warned that the risk of global economic recession was growing. The IMF lowered its economic growth forecast for next year, and crude oil prices fell back, As of the 25th, the settlement price of the main contract of WTI crude oil futures in the United States had been reported at 85.32 dollars/barrel, and the settlement price of the main contract of Brent crude oil futures had been reported at 93.52 dollars/barrel. The oil price plays a game around the factors of slowing demand and tight supply, maintaining range shocks. In addition, the US Energy Information Administration (EIA) inventory data showed that the US crude oil inventory surged last week, with crude oil inventory increasing by about 4.5 million barrels, gasoline inventory decreasing by about 2.3 million barrels, and distillate oil inventory increasing by about 600000 barrels. On the whole, the price of crude oil rose and the price of paraxylene rose.

In October, the domestic PTA spot market declined significantly, and the average price in the East China market was 5700 yuan/ton by the end of the month, down 10.63% from the beginning of the month. PTA maintenance and production reduction capacity decreased compared with last month. With the restart and resumption of production of large factories, the industrial load has increased significantly to 76%, and the supply has increased. However, due to the low actual inventory on the market, the overlapping epidemic situation has reduced the logistics efficiency, and the PTA market has declined. The weak terminal demand led to the further accumulation of the inventory of the polyester factory. As of the end of the month, the inventory of the polyester factory was about 31-38 days. Therefore, the raw materials were purchased as needed. With the approaching end of the winter stocking season, the current operating rate of looms in Jiangsu and Zhejiang has dropped to around 65%, which is likely to continue to reduce the load. The polyester industry also has a strong expectation of load reduction. On the whole, the downstream PTA price fell sharply, which was bad for the domestic paraxylene market, while the domestic paraxylene market price rose slightly.

Chen Ling, a PX analyst at the business agency, believes that the current supply side of the crude oil market will continue to play a game against the demand side. Downstream demand is poor, the improvement of terminal orders is limited, polyester inventory pressure rises, profits are compressed again, and PTA prices are declining. In general, it is expected that the market price of paraxylene will decline in the later period.