Price trend

Recently, the domestic POM market has stopped falling and stabilized, with spot prices hitting bottom and rebounding narrowly. According to the Commodity Market Analysis System of Shengyishe, as of April 24th, the mixed price of domestic POM was 12650 yuan/ton, a decrease of -3.62% from the price level at the beginning of the month.

Cause analysis

In terms of raw materials:

The domestic methanol market has recently seen a narrow rise, and the current fundamental contradiction is not significant. The construction of enterprise facilities is at a high level, and downstream enterprises have a certain resistance to high prices. But the social inventory position is relatively low, and the market atmosphere in the early stage is still good. At present, the supply and demand are relatively balanced, and it is expected that the short-term domestic methanol market price consolidation will be the main focus.

In terms of supply:

Recently, the operating rate of domestic POM enterprises has declined, and the overall load has decreased by about 9%, with a rate of 71%. The synchronous reduction in production has partially digested the inventory position of the enterprise. Some manufacturers have implemented price adjustments, coupled with rising external prices, overall supply pressure has eased, and supply side support for POM spot has increased.

In terms of demand:

Recently, the inventory situation of downstream POM enterprises in China has been average, and most of them just need to pick up goods to maintain production. The consumption level continues to maintain the previous weak trend, and the main logic of factories is still to digest inventory. As the end of the month approaches, traders are engaging in profit giving and order taking operations, making it difficult to maintain a smooth trading atmosphere on the exchange. Overall, the demand side has poor support for POM spot prices.

Future Market Forecast

The recent trend of the POM market has stopped falling and stabilized, followed by consolidation and operation. The operating rate of domestic polymerization plants has decreased, and there is still an expectation of a decline. The pressure on the supply side has been alleviated to some extent, and manufacturers may raise prices or rebound narrowly. Downstream consumer follow-up remains weak, with no significant release of pre holiday stocking. The current supply and demand of POM are intertwined, and it is expected that the short-term market may remain stagnant.

Price trend

Recently, the domestic PA6 market has continued to decline, with most spot prices being lowered. According to data monitoring from Business Society, as of April 23, the domestic benchmark price of PA6 mixture was 14712.50 yuan/ton, with a price level increase or decrease of -0.42% compared to the beginning of the month.

Cause analysis

In terms of raw materials:

From the above chart, it can be seen that the market price of caprolactam has recently weakened. The price of raw material pure benzene remains stable and firm, with cost support affecting the sideways trend. In terms of supply, some maintenance companies in the early stage have resumed work and returned, leading to an increase in production and increased supply pressure. The caprolactam market has sufficient supply, limited downstream demand, and weak market trading. The cost support of caprolactam for PA6 has weakened.

In terms of supply: Recently, there has been a high-level adjustment in the load of PA6 production enterprises, with an average operating rate of around 82%, and the production level has remained flat compared to the previous horizontal trend. As the end of the month approaches, the market has abundant supply of goods, and the overall support from suppliers for PA6 spot goods is average.

In terms of demand: In the downstream sector, the recent production in the main downstream industries has remained stable. The operating rate of spinning is around 85%, and the weaving load is stable at 72%. Although the overall situation has remained stable compared to the previous period, the holiday is approaching and some stocking needs are being released. However, due to the gradual decline in PA6 prices, downstream enterprises have a more cautious attitude towards the decline. On exchange trading has rebounded in caution, and there is still some support for the demand side of PA6.

Future Market Forecast

Recently, the PA6 market has weakened. The price of caprolactam has weakened, weakening the cost support for PA6. The load of domestic polymerization plants is stable and small, and terminal enterprises are in urgent need of stocking up. Some May Day reserve warehouse demand is gradually being released. Overall, the current market is plagued by long and short positions, and it is expected that the PA6 market may enter a consolidation phase in the short term.

1、 Price trend

According to the Commodity Market Analysis System of Business Society, as of April 22, the reference average price of 85% thermal phosphoric acid in China was 6660 yuan/ton, which is 6560 yuan/ton compared to the reference average price on April 15. This week, the domestic price of thermal phosphoric acid increased by 1.52%.

2、 Market analysis

The domestic phosphoric acid market prices have risen this week. The price of raw material yellow phosphorus has been raised, providing good cost support. The price of thermal phosphoric acid has followed the upward trend of raw materials. Wet process phosphoric acid spot supply is tight, market demand is stable, downstream purchases are made on demand, and the market tends to stabilize after an increase. As of April 22nd, the market price for 85% thermal phosphoric acid in Hubei region is around 6600-7000 yuan/ton. The domestic market quotation for 85% wet process phosphoric acid is around 6250-6800 yuan/ton.

In terms of raw material yellow phosphorus. The price of yellow phosphorus in the market has stabilized after rising this week. At present, the trading situation in the yellow phosphorus field is good, and downstream procurement is more active. The supply of goods is relatively tight, and manufacturers have a strong mentality of price support. As of April 22, the reference price for the yellow phosphorus market is around 23593 yuan/ton, and the actual transaction is negotiable.

3、 Future Market Forecast

Business Society’s phosphoric acid analyst believes that the phosphoric acid market has been operating well recently. The price of raw material yellow phosphorus is strong, with good cost support and a balanced market supply and demand. It is expected that the short-term phosphoric acid market will remain stable with an upward trend.

Overall increase in aluminum prices in April

Aluminum prices rose overall in April and slightly declined this week. According to the Commodity Market Analysis System of Business Society, the average price of aluminum ingots in the East China market on April 20, 2024 was 20360 yuan/ton, an increase of 4.14% compared to the average market price of 19550 yuan/ton at the beginning of the month; Compared to last Friday (4.12), the average price of aluminum ingots in the East China market was 20570 yuan/ton, a decrease of 1.02%.

This week, aluminum prices have fluctuated and fallen mainly due to the impact of news sentiment in the early stage (the UK and the US have imposed sanctions on Russian metals, including aluminum, which accounts for a relatively high proportion of LME deliverable inventory, especially copper and aluminum, and there may be some panic in the market). As a result, aluminum prices have strengthened. After the rise of aluminum prices, the market has gradually begun to digest the news, coupled with increased expectations of delayed macro interest rate cuts this week, dragging down the market’s continued upward trend.

Fundamental Overview:

1. Inventory changes

As of April 18th, the social inventory of domestic electrolytic aluminum ingots was 844000 tons, a decrease of 10000 tons compared to the same period last week.

As of April 18th, LME aluminum inventory decreased by 4600 tons compared to the previous trading day and 15400 tons compared to the same period last week.

2. Production data of the industrial chain in the first quarter

According to data from the National Bureau of Statistics, the cumulative production of electrolytic aluminum in China from January to March 2024 was 10.694 million tons, a year-on-year increase of 6.8%. Among them, in March 2024, China’s electrolytic aluminum production reached 3.585 million tons, a year-on-year increase of 7.4%.

Raw material end: From January to March 2024, China’s cumulative production of alumina reached 20.166 million tons, a year-on-year increase of 2.8%. Among them, in March 2024, China’s alumina production reached 6.776 million tons, a year-on-year increase of 0.5%.

Downstream end: From January to March 2024, China’s cumulative aluminum production reached 15.685 million tons, a year-on-year increase of 13.5%. Among them, the aluminum production in March 2024 was 6.03 million tons, a year-on-year increase of 8.4%.

3. Import and export data of the industrial chain in the first quarter

The latest data from the General Administration of Customs shows that from January to March 2024, China exported 1.48 million tons of un forged aluminum and aluminum materials, a year-on-year increase of 7.4%; Among them, in March, China exported 510000 tons of un forged and rolled aluminum and aluminum materials, a year-on-year increase of 3.1%.

In terms of imports, from January to March 2024, China’s cumulative imports of unwrought aluminum and aluminum materials reached 1.1 million tons, an increase of 92.3% year-on-year; In March, the import volume of unwrought aluminum and aluminum materials was 380000 tons, an increase of 89.8% year-on-year.

4. Terminal demand data for the first quarter

According to statistics from the China Association of Automobile Manufacturers, China’s automobile production and sales reached 6.606 million and 6.72 million units respectively from January to March 2024, with year-on-year growth of 6.4% and 10.6%. Among them, the production and sales of automobiles in March reached 2.687 million and 2.694 million respectively, with a month on month increase of 78.4% and 70.2%, and a year-on-year increase of 4% and 9.9%, respectively.

In terms of domestic infrastructure construction investment, from January to March 2023, domestic infrastructure investment increased by 8.75% year-on-year.

In terms of domestic real estate: According to statistics from the National Bureau of Statistics, from January to March 2024, the construction area of Chinese real estate development enterprises was 678.51 million square meters, a year-on-year decrease of 11.1%. Among them, the residential construction area was 47.45.8 million square meters, a decrease of 11.7%. The newly constructed area of housing is 172.83 million square meters, a decrease of 27.8%. Among them, the newly started residential construction area was 125.34 million square meters, a decrease of 28.7%. The completed area of houses is 152.59 million square meters, a decrease of 20.7%. Among them, the completed residential area was 111.48 million square meters, a decrease of 21.9%.

Recent supply and demand variables: Yunnan’s resumption of production

On the supply side: Following the release of 800000 kilowatts of electricity in Yunnan Province in March for the resumption of electrolytic aluminum production, due to the improvement of water levels in mainstream hydropower stations in Yunnan region, an additional 300000 kilowatts of electricity can be used for the resumption of electrolytic aluminum production. It is expected to increase production capacity by 200000 tons and resume production in April; Adding up the previous production capacity of 500000 tons, the Yunnan direction’s production capacity can reach 700000 tons.

Future Market Forecast

The aluminum price is likely to enter a long short stalemate stage, with an increased probability of sideways fluctuations. The long short factors are as follows:

Multiple reasons:

1. Inventory: As of April 18th, the inventory of electrolytic aluminum in the mainstream domestic market was 844000 tons, which is 910000 tons compared to the inventory of electrolytic aluminum in the mainstream domestic market on March 28th, with 66000 tons removed from stock; In the near future, the social inventory of aluminum ingots may enter a state of destocking, which will provide certain support for aluminum prices.

2. The macro trend remains unchanged, and under the expectation of the Federal Reserve’s interest rate cut, the expectation of overseas monetary easing is strengthened. The non-ferrous sector has certain financial attributes, which provides positive support for aluminum prices.

Air Force Reason:

1. Yunnan’s supply will continue to rise in the future. Recently, aluminum companies in Yunnan have resumed production ahead of schedule and have basically been implemented. The external power transmission in Yunnan Province has decreased, and the power supply in the province is abundant. The process of resuming electrolytic aluminum production is underway. There is an expectation of an increase in domestic supply.

2. The import window was temporarily closed in the early stage, and with the rise of domestic aluminum prices, the domestic spot discount situation has improved. The data shows that the year-on-year surge in overseas raw aluminum imports from January to February has had a certain impact on domestic spot prices. However, the United States and the United Kingdom have announced new trading restrictions on Russian aluminum, copper, and nickel, as sanctions will not prohibit non US individuals and entities from purchasing Russian physical copper, nickel, or aluminum. It remains to be seen whether Russian aluminum will gradually enter the domestic market.

On April 18th, the domestic glycerol market prices remained stable. According to the data monitoring system of Business Society, as of April 18th, the benchmark price of glycerol in Business Society was 4500.00 yuan/ton, an increase of 1.41% compared to the beginning of this month (4437.50 yuan/ton).

On the raw material side, multiple bearish factors suppressed the oscillation and decline of the palm oil market. The production of Malay palm oil in the external market is in a recovery period, and the futures price has fallen. The demand for many domestic catering products is sluggish, and the market for substitute soybean oil continues to decline. The bearish sentiment is suppressed, and the palm oil market is constantly falling, falling to 8000 yuan/ton. According to the monitoring of Business Society, on April 18th, the benchmark price of palm oil in Business Society was 8038.00 yuan/ton, a decrease of -2.45% compared to the beginning of this month (8240.00 yuan/ton).

The downstream market for epichlorohydrin is weak, with weak demand.

Post forecast: According to the glycerol data analyst from Business Society, the raw material soybean oil and palm oil market is oscillating and falling, and enterprises are mostly wait-and-see. In addition, the downstream chlorine market is weak and demand is sluggish. In the near future, domestic glycerol prices may remain stable, and more information needs to be paid attention to market guidance.