Aluminum prices fluctuated sideways in May

According to the Commodity Market Analysis System of Business Society, the average price of domestic aluminum ingots in the East China market on May 30, 2023 was 18363.33 yuan/ton, a decrease of 0.69% compared to the aluminum price of 18490 yuan/ton at the beginning of the month (May 1).

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 17500 to 19500 yuan/ton.

Macro factors

In May, the Federal Reserve raised interest rates by 25BP, pushing them up to 5-5.25%, a new high in recent years; A preliminary agreement was reached on the 27th of the US debt ceiling negotiation. Although the FOMC of the Federal Reserve said that the interest rate increase was gradually coming to an end, it still needed time to verify and observe whether the Federal Reserve started to cut interest rates.

2. In May, the Markit manufacturing PMI index in the United States recorded 48.5, a decrease compared to April. In April, the core CPI in the United States increased by 5.5% year-on-year, while the PCE price index increased by 4.7% year-on-year, higher than expected and previous 4.6%; The eurozone manufacturing index PMI further declined to 44.6, and the core CPI of the eurozone increased by 5.6% year-on-year in April. Economic data from Europe and the United States performed poorly, with inflation improving less than expected.

On the domestic side, the year-on-year growth rate of domestic CPI in April was the lowest level since February 2021, and PPI data fell simultaneously. The RMB exchange rate broke the 7 integer mark in May. After the May Day holiday, the growth rate of industrial product consumption and production continued to slow down.

Fundamental factors

On the demand side, terminal consumption is weak, and real estate investment and new construction data are poor. In May, consumption gradually became flat, while in April, the operating rate of aluminum companies slightly declined. The operating rate of aluminum companies continued to decline on a weekly basis, with weaker orders for building profiles and photovoltaics. The operating rate of alloys, cables, and aluminum foil remained stable, but new orders for enterprises declined.

On the supply side, in May 2023, the production of electrolytic aluminum was approximately 3.43 million tons (estimated), and the daily chemical production was approximately 110600 tons, with an average daily production continuing to increase. In April, China’s primary aluminum production was 3.3149 million tons, with an average daily production of 110500 tons; Compared to March 2023, the daily production increased by 109400 tons. At present, the electrolytic aluminum industry has built a production capacity of 47.649 million tons, with an operating capacity of 40.397 million tons and an operating rate of 84.78%. Recently, we have been paying attention to the electricity situation and stability performance in Yunnan during the high water period in June, and the pace of resuming production in Yunnan is approaching.

Inventory data: Domestic inventory has significantly declined; Data shows that as of May 29th, the mainstream market of domestic electrolytic aluminum ingots had a social inventory of 573000 tons, which was 798000 tons compared to April 27th, and 225000 tons were removed from stock.

Future market forecast

From the supply side perspective, production slightly increased in May, and inventory data shows a clear trend of inventory depletion in the electrolytic aluminum industry. The main game point currently lies in the actual supply and demand changes in the later stage. It is expected that aluminum prices will mainly fluctuate around 18500 yuan/ton in the short term, and we will be watching downstream consumption intensity in the near future.

Price trend chart of sodium pyrosulfite in China

According to the Commodity Market Analysis System of Business Society, the price of domestic sodium metabisulfite continued to decline in May. The average price of industrial grade sodium metabisulfite on May 1st was 2350.00 yuan/ton, and on May 29th it was 2250.00 yuan/ton, a decrease of 4.26% during the month.

In April, the price of domestic soda ash fell by 3.99%, while the price of sulfur significantly decreased by 32.55%. The upstream raw material cost continued to decline weakly, and the cost continued to decline. The downstream trading entities had a strong wait-and-see attitude, and the overall procurement was relatively cautious. In May, manufacturers successively lowered the ex factory price of sodium metabisulfite, driving the overall weak downward trend of the domestic market price of sodium metabisulfite.

As of May 29, the price of domestic soda ash had dropped significantly by 16.6% in the month, and the price of sulfur had rebounded from the bottom, with an overall increase of 8.33% in the month. On the whole, the cost of upstream raw materials of sodium metabisulfite was still at a low level, and the continued decline of the cost would further suppress the price of domestic sodium metabisulfite market in the future.

At present, the inventory of domestic sodium metabisulfite manufacturers is about 30%. In addition, the current domestic market price of sodium metabisulfite is at a lower level than that in previous years, the low processing profit of enterprises and the relatively low inventory of sodium metabisulfite market price play a certain role in supporting the bottom.

Analysts from the business community believe that the price of upstream raw materials continues to decline in a weak way, and the cost continues to fall under the low pressure system. It is expected that the domestic sodium metabisulfite market price will still have some room to fall in June. Supported by the relatively low inventory of enterprises, the overall decline of the sodium metabisulfite market price in June is limited.

This week (May 22-26, 2023), downstream demand for viscose staple fibers was average, while upstream raw materials remained strong and stable. Factories showed strong willingness to back up prices, while viscose staple fiber prices remained stable. The overall market performance remained calm. Downstream people’s cotton yarn is still lukewarm and sluggish, with weak market demand and mainly relying on demand orders, resulting in stable prices.

According to the Commodity Market Analysis System of Business Society, the center of gravity of viscose staple fiber prices has slightly shifted upwards. As of May 26th, the factory quotation for 1.2D * 38mm viscose staple fiber in China is 13360 yuan/ton, which is the same as last week’s price.

In terms of cost: The production cost of viscose staple fibers has not changed much, and the raw materials are maintained, with limited cost support. The price center of raw material dissolved pulp remains stable, with the domestic market mainly maintaining stability. Downstream procurement is based on demand, and businesses often execute early orders, with stable shipments being the main focus.

Downstream cotton yarn market

Human cotton yarn is relatively stable, with average transactions and prices basically maintained. However, some enterprises have reduced prices and promotions under inventory pressure. According to the analysis system of the commodity market of the Business Society, as of May 21, the average ex factory price of human cotton yarn (30S, ring spinning, first-class product) was 17566 yuan/ton, and the price remained unchanged.

Future Market Forecast

Recently, the market performance of viscose staple fibers has been calm, with companies still focusing on executing orders and firm offers. It is difficult for terminal demand to show significant improvement in the short term, with downstream procurement being the main focus. The market has once again entered a wait-and-see period of adjustment, focusing on downstream demand. Analysts from Business Society predict that the short-term market for viscose staple fibers and rayon yarn will remain stable.

According to the commodity market analysis system of the business community, the price index of the domestic rare earth market rose slightly, and the domestic medium and heavy rare earth market recovered slightly. On May 18, the rare earth index was 442 points, 56.11% lower than the cycle’s highest point of 1007 (2022-02-24), and 63.10% higher than the lowest point of 271 on September 13, 2015. (Note: The cycle refers to the period from December 1st, 2011 to the present)

The prices of domestic dysprosium oxide, dysprosium iron alloy, terbium oxide, and metallic terbium have slightly rebounded. As of the 19th, the price of dysprosium oxide was 2.055 million yuan/ton, an increase of 7.87% compared to the beginning of the month; The price of dysprosium iron alloy was 1.99 million yuan/ton, an increase of 6.13% compared to the beginning of the month; The price of dysprosium metal is 2.63 million yuan/ton, with a stable price trend; The price of terbium series in China has mainly increased, with terbium oxide prices reaching 8.2 million yuan/ton and metal terbium prices reaching 10.3 million yuan/ton.

In mid May, the heavy rare earth market rebounded slightly, and the recent inquiries increased. In addition, the price of rare earth in the early period has declined for a long time. Affected by the small increase in demand, the domestic market price of heavy rare earth rebounded. The domestic medium and heavy rare earth market is relatively active in terms of inquiry and quotation, with a slight increase in trading volume. However, downstream demand is still weak, metal factory orders are relatively scarce, and magnetic material factories mainly consume existing inventory. In addition, with an increase in rare earth mines from Southeast Asia, the supply of rare earth is sufficient, and the pessimism in the rare earth market remains heavy.

According to statistics, the production and sales of new energy vehicles completed 640000 and 636000 units respectively in April, a year-on-year increase of 1.1 times. The sales of new energy vehicles accounted for 29.5% of the total sales of new vehicles. From January to April, the total production and sales of new energy vehicles reached 2.291 million and 2.222 million, respectively, with a year-on-year increase of 42.8%. The sales of new energy vehicles accounted for 27% of the total sales of new vehicles. 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 in April remained generally flat, with imports increasing by 52.3% compared to the previous month. From January to April 2023, a total of 16411.2 tons of rare earth commodities were exported, a year-on-year decrease of 4.1%; From January to April, imported rare earth commodities reached 59643.8 tons, a year-on-year increase of 41.9%. The increase of China’s imports of rare earth commodities has correspondingly suppressed the price rise of domestic medium and heavy rare earth markets.

Future forecast: The supply of rare earth production enterprises is normal in the near future, and the downstream demand has not changed much. It is expected that the price of heavy rare earth market will fluctuate and rise mainly in the short term. In the medium and long term, there is a lack of primary and renewable supply sources. 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 conditioners, consumer electronics, the global demand for rare earth permanent magnets is expected to continue to grow.

Price trend chart of sodium pyrosulfite in China

According to the Commodity Market Analysis System of Business Society, the overall price of domestic sodium metabisulfite remained stable and advanced this week. The average price of industrial grade sodium metabisulfite at the beginning of the week was 2266.67 yuan/ton, and the average price at the weekend was 2266.67 yuan/ton, indicating a stable and advanced overall trend.

This week, the domestic sodium metabisulfite market performed fairly well. The market price of industrial grade sodium metabisulfite ranged from 2200-2500 yuan/ton, and most prices were concentrated around 2200-2350 yuan/ton. The inventory of the enterprise is about 30%, mainly to complete old customer orders. (The above prices refer to external quotations from mainstream domestic enterprises, and some enterprises that have not been quoted are temporarily excluded from their scope. The prices are for reference only and are not related to the manufacturer’s final pricing. For more information, please contact each manufacturer for consultation.).

As of May 19, the price of domestic soda ash continued to be weak, falling by 7.17% in the month, and the price of sulfur continued to rise, rising by 9.26% in the month. The overall price of raw materials rose and fell with each other. Downstream trade entities had a strong wait-and-see attitude. In general, the overall price of upstream raw materials was falling, and the fluctuating and declining cost would suppress the future market price of sodium metabisulfite to some extent.

Future Market Forecast

Analysts from the business community believe that the cost of raw materials has fluctuated and declined. Under the pressure of cost, the domestic market price of sodium metabisulfite will continue to be under pressure and weak in the short term.

According to the Commodity Market Analysis System of Business Society, the mainstream price of styrene in Shandong has been fluctuating and declining recently. At the beginning of the week, the average price of styrene in Shandong was 7981.67/ton, while on the weekend, the average price of styrene in Shandong was 7760.00 yuan/ton, a decrease of 2.78%. The price has decreased by 24.38% compared to the same period last year.

styrene

Recently, the styrene market price has continued to decline. From the above chart, it can be seen that the price of styrene has been mainly declining in the past two months, and prices have continued to decline this week. The international crude oil price has fallen, the pure benzene market has weakened, and cost support is poor. Downstream markets are mostly in the off-season, mainly in demand. Domestic styrene supply is relatively abundant, and spot transactions are poor. The styrene market has fluctuated and declined.

In terms of raw materials, the price of pure benzene has slightly decreased this week. On May 15th, the price of pure benzene was 6703-7120 yuan/ton (average price 6911 yuan/ton). On Friday (May 19th), the price of pure benzene was 6603-6880 yuan/ton (average price 6741/ton), a decrease of 5.18% compared to last week and a decrease of 25.73% compared to the same period last year. Downstream buying rose and entered the market, with high volume trading. Some refineries in Shandong have maintained a shipping mentality, with a slight decline in prices. Some refineries have low inventory levels, and their prices remain stable. During the day, downstream and traders actively purchased, with high volume transactions and prices ranging from 6580 to 6650 yuan/ton.

In terms of downstream, the three major downstream markets of styrene have seen varying fluctuations. At the beginning of this week, the average price of PS was 9566.67 yuan/ton, which was stable and a decrease of 10.43% compared to the same period last year. The trading atmosphere of PS is sluggish, and it is expected that in the short term, the domestic PS (polystyrene) price may mainly fluctuate and weaken.

The EPS market is stable this week, and according to the analysis system of the commodity market of the Business Society, the average price of ordinary materials is 9537.50 yuan/ton. The EPS market lacks positive support, and it is expected that the domestic EPS market may be dominated by a narrow and weak trend.

Recently, the domestic ABS market has declined, and the high load situation in the ABS industry has continued. Enterprises are resuming work and maintenance, and the overall load is showing an increasing pattern. In the middle of the month, China’s ABS operating rate is close to 90%, and the overall narrow adjustment has been around 88% recently. The on-site spot supply continues to be abundant, competition intensifies, and supply side pressure is high. The inventory of domestic enterprises has increased, while the mid stream inventory has remained stagnant at a high level. Merchants are under pressure, and their prices have declined.

The price of crude oil fell on the night market, with poor cost support, but downstream demand has improved. In June, there was an increase in styrene plant maintenance, and it is expected that the short-term styrene market will fluctuate and rise mainly.

1、 Price trend

According to the Commodity Market Analysis System of the Business Society, the average factory price of ammonium sulfate in China was 880 yuan/ton on May 8th, and 850 yuan/ton on May 12th. This week, the price of ammonium sulfate decreased by 3.41%.

2、 Market analysis

The market price of ammonium sulfate fell this week. The international market for ammonium sulfate is still weak and there is currently no significant improvement. The domestic market trend is not good, and downstream purchases are made on demand, often at low prices. This week, the operating rate of coking grade ammonium sulfate enterprises remained stable, with poor market conditions and a decrease in bidding prices. The operating rate of domestic ammonium sulfate enterprises has decreased, the market supply is tight, and prices are firm. As of May 12th, the mainstream factory quotation for coking grade ammonium sulfate in Shandong is around 800 yuan/ton. The mainstream factory quotation for domestic ammonium sulfate in Shandong is around 850-890 yuan/ton.

This week, the downstream compound fertilizer market was reorganized and operated, with significant stability and minor fluctuations in the market. At present, terminal demand is gradually following up and corn fertilizer is being shipped in a centralized manner. However, the market for composite fertilizer raw materials has weakened, with insufficient cost support and unstable market mentality.

3、 Future Market Forecast

According to ammonium sulfate analysts from Business Society, the domestic ammonium sulfate market has been fluctuating and weakening recently, while foreign demand remains weak. Downstream low-priced procurement is the main focus, and market transactions are sluggish. It is expected that the ammonium sulfate market will be weak and volatile in the short term.

Price trend chart of sodium pyrosulfite in China

According to the Commodity Market Analysis System of Business Society, the price of domestic sodium metabisulfite was relatively weak this week. The average price of industrial grade sodium metabisulfite at the beginning of the week was 2283.33 yuan/ton, and the average price at the weekend was 2266.67 yuan/ton, with a decrease of 0.73% during the week.

This week, the domestic sodium metabisulfite market showed a general performance. Influenced by the slight fluctuation of upstream costs, the domestic sodium metabisulfite market price this week was stable, moderate and weak. The market price range of industrial grade sodium metabisulfite was 2200-2500 yuan/ton, and most prices were concentrated around 2200-2350 yuan/ton. The inventory of the enterprise is about 30%, and the enterprise mainly completes orders from old customers. (The above prices refer to external quotations from mainstream domestic enterprises, and some enterprises that have not been quoted are temporarily excluded from their scope. The prices are for reference only and are not related to the manufacturer’s final pricing. For more information, please contact each manufacturer for consultation.).

As of May 12th, the domestic soda ash price fell by 3.77% during the month, while the sulfur price increased by 6.02%. Overall, the raw material cost is weak and unstable, and the overall level is still relatively low. The sustained low cost will form a certain pressure on the recovery of sodium pyrosulfite in the future.

Future Market Forecast

Analysts from the business community believe that the cost is low and volatile, and the downstream purchase and sales are cautious. In the short term, the domestic market price of sodium metabisulfite will continue to fluctuate slightly at the current level.

According to the commodity market analysis system of the business community, the price trend of the domestic ammonium nitrate market was temporarily stable this week. As of the weekend, the market price of ammonium nitrate was 4340 yuan/ton, unchanged from the price of 4340 yuan/ton at the beginning of the week, down 5.65% year on year.

This week, the price trend of domestic ammonium nitrate market was temporarily stable, and the domestic ammonium nitrate manufacturers’ devices were operating stably. Recently, the supply of goods on the site was sufficient, and the goods on the site were generally shipped. The manufacturer’s inventory was not high. The price trend of liquid ammonia at the upstream of the terminal was slightly lower, the price of nitric acid was lower, and the price trend of ammonium nitrate was temporarily stable. Recently, the shipping market of ammonium nitrate manufacturers has been normal, and downstream purchases are on demand. Recently, downstream demand for nitro compound fertilizers has been normal, while domestic procurement in the downstream civilian explosive industry is average. Domestic ammonium nitrate manufacturers have not started production high, and the price of ammonium nitrate has been stable recently. As of now, the mainstream negotiation prices in Shaanxi region are 5300-5400 yuan/ton, Shandong region is 4500-4600 yuan/ton, and Hebei region is 4600-4700 yuan/ton.

The price of concentrated nitric acid in China has slightly declined this week, with an average price of 2400 yuan/ton as of the 12th, a decrease of 1.37% compared to the price of 2433.33 yuan/ton at the beginning of the week. Mainstream enterprises in East China offer prices ranging from 2400 to 2600 yuan/ton, while northern and central China offer prices ranging from 2200 to 2400 yuan/ton. At present, the pressure on the supply side of the concentrated nitric acid market is not decreasing, demand continues to be weak, and costs are declining. The supply of the concentrated nitric acid market is normal, and the market mainly relies on orders. The market volume is average, and industry insiders are mostly wait-and-see. The on-site price of nitric acid has slightly decreased, and the market situation of ammonium nitrate is weak and stable.

The price trend of upstream liquid ammonia has slightly declined this week. As of the weekend, the price of liquid ammonia was 3183.33 yuan/ton, a decrease of 1.55% compared to the price of 3233.33 yuan/ton at the beginning of the week. In April, the supply performance was abundant, and manufacturers’ accumulated inventory guided them to continuously lower their factory prices. In April, manufacturers’ quotations significantly declined, and there has been little change in domestic ammonia release recently. However, supply pressure still exists, and the price of liquid ammonia has slightly decreased. The low price of upstream liquid ammonia has a negative impact on the ammonium nitrate market, and the market price of ammonium nitrate is temporarily stable.

Recently, the demand of the downstream civil explosive industry is general, the price trend of liquid ammonia market fluctuates and declines, the price of nitric acid drops slightly, and the spot supply of ammonium nitrate is normal. Ammonium nitrate analysts from the business community believe that the market price of ammonium nitrate in the later period may be weak and stable.

According to data monitoring by Business Society, as of May 11, 2023, the reference average price of 30% grade phosphate ore in China was around 1066 yuan/ton. Compared with May 7, 2023 (reference price of phosphate ore is 1090 yuan/ton), the price has decreased by 24 yuan/ton, a decrease of 2.20%.

From the data monitoring chart of the Business Society, it can be seen that this week (5.7 to 5.11), the domestic phosphorus ore market as a whole was in a weak and declining trend, and the overall market focus was on a downward trend. At present, although the overall support for the supply side of phosphate rock in China is still acceptable, the overall operating rate downstream of the phosphate rock industry chain is relatively low, and the demand for phosphate rock in some regions has weakened. The overall atmosphere in phosphate rock yards is average, and some mining companies have lowered the prices of mid to high-end grade phosphate rock by around 20-50 yuan/ton. As of May 11, the market price of 30% grade phosphorus ore in China is around 1000-1100 yuan/ton, and the low price is around 980 yuan/ton. There are also differences between the specific price and factors such as the original ore specifications and powder to lump ratio, and the specific price needs to be negotiated through actual orders.

Prediction and Analysis of the Future Market Trend of Phosphate Rock

At present, the trading atmosphere in the phosphate ore field is quiet, and the downstream weakness affects the mentality of the industry. From bottom to top, the support for phosphate ore is loose. The phosphate ore data analyst of the Business Society believes that in the short term, the domestic phosphate ore market is mainly subject to narrow adjustment and operation, and the specific trend still needs to pay more attention to changes in supply and demand news.