The high price of precious metals in June was sideways, rising first and then falling later within the month

In June, the price of precious metals was at a high level, with a trend of first rising and then falling during the month. According to the commodity market analysis system of the business community, the price of gold in the Spot market will be 448.60 yuan/g on June 30, 2023, down 0.24% from 449.70 yuan/g in the Spot market at the beginning of the month (June 1); Compared to the high of 452.34 yuan/g on June 13th, it decreased by 0.83%.

Silver fell back to the beginning of the month

According to the commodity market analysis system of the business community, the average silver market price will be 5432.33 yuan/kg on June 30, 2023, down 0.25% from 5446 yuan/kg at the beginning of the month (June 1); Compared to the high point of the month (June 13th) of 5647 yuan/kg, it decreased by 3.80%.

Summary of Price Trends of Precious Metals and Crude Oil

In the early stage, the correlation between precious metals and crude oil trends is strong. After the second half of 2022, precious metal prices have bottomed out and stabilized, and the magnitude of macro factors affecting them has begun to show differentiation. The trend of precious metals and crude oil began to converge in late March, but after mid April, the trend began to diverge again. Mainly due to the increased impact of risk aversion on the rise of precious metal prices.

Comparison of precious metal gold and silver price trends in the past year

In 2022, the rise and fall trends of precious metal gold and silver have converged, but the decline in silver was deeper from April to August, and the recent recovery has been more significant. In December, silver continued its strong trend last month, and gold began to consolidate at high levels. In 2023, precious metal gold and silver have consolidated at high levels, with a slight decline in February. Since March, precious metal prices have started to rise. Silver prices began to decline in May, while gold remained relatively strong. In June, gold prices reached a high level and silver prices began to rise.

Policy Fundamentals Data

The US GDP growth rate in the first quarter has significantly increased to 2%, forcing the market to suggest to the Federal Reserve a target pricing of raising interest rates twice this year. As of this morning, the market has priced the Federal Reserve to raise interest rates by at most about 35 basis points this year, compared to around 30 basis points yesterday. In addition, the core PCE price index in the United States recorded an annualized quarterly rate of 4.9% in the first quarter, better than the expected 5.00%. Last week, the number of initial claims for unemployment benefits in the United States hit its largest decline since October 2021. The monthly rate of the US completed home contract sales index for May was -2.7%, lower than the expected -0.50%. The economic data improved again, boosting the U.S. Dollar Index, making the market believe that the probability of the Federal Reserve raising interest rates is further enhanced, to a certain extent, precious metals. However, based on recent statements from Federal Reserve officials, Federal Reserve Chairman Powell stated that continuing to slow down is meaningful and does not rule out the possibility of continuous interest rate hikes. The risk of doing too much is smaller than doing too little. Next year’s FOMC voting committee and Atlanta Federal Reserve Chairman Bostek stated on Thursday that the need for further interest rate hikes in the coming months is not absolutely ruled out, and there is a possibility of two consecutive interest rate hikes, without seeing the urgency of interest rate hikes as seen by Powell. The baseline is that there will be no further interest rate hikes, but there will be no interest rate cuts in 2024.

The high price of precious metals has fallen, and the probability of sideways fluctuations in precious metal prices in July is high

At present, the price of precious metals has been fluctuating in the high range after hitting a 10-year high in the early stage. In the early stage, we expected that under the high inflation and high interest rate hikes, the pace of overseas economic recession may lead to a relatively strong sense of risk aversion, which is currently reflected in prices. Some central banks around the world increased their holdings of Gold reserve, which also formed some support for gold prices.

However, Federal Reserve officials downplayed the possibility of interest rate cuts within the year, suggesting that there are still two expected rate hikes within the year, which will suppress precious metal prices for a certain period of time. At present, the price of precious metals is at a high level, and the probability of entering a sideways market fluctuation is increasing. It is expected that the price fluctuation of precious metals in July will be mainly weak and consolidation will continue to be bullish in the medium to long term.

According to the monitoring of the Commodity Market Analysis System of the Business Society, the domestic price of LLDPE (7042) was 8014 yuan/ton on June 1, and the average price on June 29 was 8035 yuan/ton. During this period, the quotation increased by 0.27%.

According to the monitoring of the Commodity Market Analysis System of the Business Society, the average ex factory price of LDPE (2426H) was 8120 yuan/ton on June 1, and 8600 yuan/ton on June 29, with a rise of 5.91% during the period.

According to the monitoring of the Commodity Market Analysis System of the Business Society, the average ex factory price of HDPE (5000S) was 8937 yuan/ton on June 1st, and the average price on June 29th was 9087 yuan/ton, with a 1.68% increase in quotation during this period.

In June, polyethylene prices experienced varying degrees of increase, with a significant increase in LDPE prices, a slight increase in LLDPE fluctuations, and a slight increase in HDPE prices. The suspension of interest rate hikes by the Federal Reserve in June and the news of domestic interest rate cuts have boosted macroeconomic sentiment, providing some support for polyethylene prices. The rise in crude oil prices at the beginning of the month is positive for the polyethylene market. In June, equipment maintenance was concentrated, resulting in an increase in maintenance losses. Market supply pressure was not significant, and production enterprises and traders continued to increase their prices, with LDPE prices rising significantly. Agricultural film is in the off-season of demand, and order follow-up is limited. In terms of pipes, factory orders are gradually decreasing, and the factory’s enthusiasm for receiving goods is not high. The market is mainly focused on procurement on demand.

At present, polyethylene demand is in the off-season, and enterprise parking and maintenance plans are relatively concentrated. July is still the off-season for polyethylene demand, and it is expected that polyethylene may fluctuate weakly.

1、 Price trend

According to the Commodity Market Analysis System of the Business Society, the average market price of 55% powdered monoammonium on June 1st was 2687 yuan/ton. On June 28th, the average market price of 55% powdered monoammonium was 2550 yuan/ton, and the market price of monoammonium phosphate fell by 5.12% this month.

According to the Commodity Market Analysis System of the Business Society, the average market price of 64% diammonium chloride on June 1st was 3833 yuan/ton. On June 28th, the average market price of 64% diammonium chloride was 3737 yuan/ton. This month, the market price of diammonium phosphate decreased by 2.50%.

2、 Market analysis

The price of ammonium phosphate fluctuated and fell this month. The prices of raw phosphorus ore and sulfur have declined, resulting in insufficient cost support. At present, in the off-season of the market, downstream demand is performing poorly, market trading has decreased, and the ammonium phosphate market is operating weakly. As of June 28th, the market price of 55 powdered ammonium in Hubei region is around 2400-2500 yuan/ton, while the market price of 55 powdered ammonium in Henan region is around 2500-2600 yuan/ton, with actual negotiations being the main focus. The quotation for 64% diammonium in Shandong is around 3500-3800 yuan/ton, while the quotation for 57% diammonium in Shandong is around 2650-3000 yuan/ton. The actual transaction is negotiated.

The raw material phosphate rock market has shown a weak decline overall in the domestic phosphate rock market this month. Starting from the beginning of the month, due to the weak downstream demand for phosphate ore, the overall shipment of phosphate ore has slowed down, and the mentality of the industry is average. Some mining companies have started to lower the price of phosphate ore shipments, with a decrease of around 20-30 yuan/ton. Due to the impact of shipments, some mining enterprises have added average new orders, so there is some pressure on the supply side, and the support provided by the supply side to the market is gradually loosening. In the later stages, the phosphorus ore market continues to move downward in the supply-demand game, with a 30% grade phosphate ore price reduction of around 40-60/ton.

In terms of the raw sulfur market, the sulfur market in East China was weak this month. The on-site refinery units operated normally, the market supply was sufficient, the enterprises were active in shipping, and the downstream parties were generally motivated to enter the market. A small number of purchases were followed up as needed. The manufacturer’s shipment was not smooth, and the inventory was accumulated. In order to promote the shipment, the refinery lowered the sulfur quotation, and the focus of sulfur transactions continued to move downward.

3、 Future Market Forecast

Analysts from the Business Society believe that the recent decline in raw material prices has weakened the cost support for ammonium phosphate. The low cost coupled with weak market demand has resulted in a continued weak market operation. Under the influence of bearish factors, it is expected that the price of ammonium phosphate will be weak in the short term, with consolidation and operation being the main focus.

According to the Commodity Analysis System of Business Society, the price of caustic soda fell first and then rose this week, and the overall operation is temporarily stable. On June 20th, the average market price was 3137.5 yuan/ton, while on June 27th, the average market price was 3137.5 yuan/ton, which remained unchanged and decreased by 35.53% year-on-year. The market remained flat this week.

Upstream caustic soda

According to the Commodity Analysis System of Business Society, the overall price of caustic soda remained weak this week. On June 20th, the average market price in Shandong was 818 yuan/ton, while on June 27th, the average market price in Shandong was 792 yuan/ton, a decrease of 3.18% and a decrease of 36.74% compared to the same period last year.

Analysts from Business Society believe that the overall price of caustic soda remained stable this week, and the market trading atmosphere was average. Downstream demand has recently been procured on demand, with average enthusiasm for procurement. However, with the impact of device parking and maintenance in the northwest region, market activity has increased. However, the overall acceptance level of downstream is limited. Overall, the price of caustic soda may remain stable in the short term, depending on the demand in the downstream market.

1、 Price trend

According to the commodity market analysis system of the business community, the average price of Caprolactam in the domestic market was 12185 yuan/ton on June 1, and the average price of Caprolactam in the domestic market was 12122 yuan/ton on June 26. The price of Caprolactam in the domestic market fell 0.51% this month.

2、 Market analysis

The domestic Caprolactam market price rose first and then fell this month. In early June, the price of raw material pure benzene fluctuated slightly, and cost support was still acceptable. The spot supply of Caprolactam in the market decreased, and enterprises increased prices more often. The willingness of downstream replenishment increased, and the market price of Caprolactam was stable and good. In the middle and late June, the market price of Caprolactam fluctuated and fell. The price of raw material pure benzene has decreased, weakening cost support. The supply of Caprolactam in the market has eased, and the downstream is mainly purchased on demand.

The price of raw material pure benzene has decreased this month. In early June, the price of pure benzene fluctuated narrowly, with minor fluctuations being the main trend. In mid to late June, the price of pure benzene continued to decline. On June 26th, the price of pure benzene was 6223.83 yuan/ton, a decrease of 4.7% compared to 6530.50 yuan/ton at the beginning of the month. This month, the price of Sinopec pure benzene decreased by 300 yuan/ton to 6200 yuan/ton.

This month, the domestic market for downstream PA6 fluctuated and declined. The load of domestic polymerization plants is stable, and the supply remains sufficient. In terms of demand, it is average, and stocking tends towards low-priced sources. As of June 26th, the average factory price of PA6 in China is 13400 yuan/ton.

3、 Future Market Forecast

Caprolactam analysts from the business community believe that the price of raw material pure benzene has been stable recently, and the cost support is general. The downstream is cautious in purchasing raw materials, focusing on rigid demand. The trading of Caprolactam in the market is light, and the transaction focus is lowered. It is expected that the price of Caprolactam will weaken in the short term.