According to the Commodity Market Analysis System of Business Society, from August 28th to September 4th, the domestic butadiene market price increased from 7618 yuan/ton to 8063 yuan/ton, with a price increase of 5.84% during the cycle. The price increased by 9.32% month on month and decreased by 8.48% year-on-year. The downstream synthetic rubber market has strengthened, and the demand side has been boosted. At the same time, the strong rise in prices in the week and outside has brought a significant boost to the mentality of merchants in offering.

On the cost side, in terms of crude oil: International crude oil futures have significantly increased, and OPEC+, an oil producing country, is rumored to have extended production cuts. The market expects an additional 1 million barrels of production reduction from Saudi Arabia to continue until October, and supply tightening is expected to continue to ferment and boost the oil market. As of the close on September 1st, the settlement price of the Brent crude oil futures main contract was at $88.55 per barrel, an increase of $1.72 or 2.0%.

In terms of naphtha, the domestic naphtha market has experienced high volatility. The high level of the crude oil market has a clear guiding effect on the naphtha market. At present, there is sufficient supply in the local refining naphtha market, and a small amount of ethylene cracking in the terminal direction is in demand. Refineries are actively shipping butadiene, which is influenced by favorable factors in terms of cost.

On the supply side, the main production enterprises, Sinopec, and various sales companies have maintained a price increase of 500 yuan/ton to 8100 yuan/ton for butadiene. The short-term supply side of butadiene is affected by a bullish trend.

On the demand side, supported by favorable raw materials, and driven by an increase in the operating rate of the tire industry, the downstream synthetic rubber product market continues to rise. As of September 4th, except for some closed orders and not reporting, the overall offer of domestic butadiene and styrene merchants in the Business Society has increased to 13400~13600 yuan/ton, a significant increase compared to the beginning of the month; The benchmark price of butadiene rubber is 11970.00 yuan/ton. The demand for butadiene is influenced by favorable factors.

On September 1st, the closing price of the Asian butadiene outer market was closed due to a public holiday in Singapore. The external price of butadiene in Europe remained stable: FOB Rotterdam closed at $545-555 per ton; FD Northwest Europe closed at 620-630 euros per ton.

In the future market forecast, the recent rise in external market prices and downstream rubber market has boosted the mentality of some merchants in the face of news; On the other hand, there is ample supply and relatively high inventory, resulting in insufficient follow-up of downstream inquiries. Butadiene analysts from Business Society predict that the domestic butadiene market is entering a stage of consolidation and volatility.

Price trend

In August, the domestic PA6 market fluctuated and saw narrow adjustments in spot prices. According to data monitoring from Business News Agency, as of August 31st, the mixed benchmark price of PA6 in China was 14050 yuan/ton, an increase or decrease of+0.36% compared to the average price level at the beginning of the month.

Cause analysis

In terms of raw materials:

From the above figure, it can be seen that the market price of caprolactam rose first and then fell this month. In the early days, crude oil led to an increase in pure benzene, strengthening cost support, and boosting the cost of caprolactam. In addition, due to the maintenance of some enterprise equipment and the tightening of market spot prices, caprolactam has risen under the dual benefits. In the second half of the month, some maintenance devices were restored, and downstream follow-up was slow, resulting in poor demand performance. Under loose supply conditions, the spot price of caprolactam began to decline. However, the overall fundamentals are improving, and it is expected that the price of caprolactam will stabilize in the short term, with a stronger consolidation trend, which can still provide support for the PA6 market.

On the supply side:

This month, the load of production enterprises has generally remained stable, with an average operating rate of around 76% in China. The market supply is relatively flat compared to the previous period, and the inventory position has slightly increased. The supplier’s support for spot goods is average, and the factory price is cautious.

In terms of demand: In the downstream sector, the load of the weaving and spinning industries has been adjusted slightly, and the overall load position is relatively stable. The actual delivery is average, and the flow of goods is relatively slow. The terminal stocking atmosphere is wait-and-see, and overall support for the demand side of PA6 slicing is poor.

Future Market Forecast

The PA6 market fluctuated narrowly in August. Caprolactam prices rose first and then adjusted, and PA6 cost side support was moderate. The domestic polymerization plant has stable load, stable and abundant production. In terms of demand, it is average, but there has been no improvement in downstream stocking enthusiasm. It is expected that the PA6 market will maintain consolidation and operation in the short term.

In August, the natural rubber market in China showed a “V” shaped fluctuation trend. Among them, the prominent upward trend of the Shanghai Rubber 01 contract is from around 12800 yuan/ton to around 13330 yuan/ton, with an upward range of about 500 yuan/ton.

According to the Commodity Market Analysis System of the Business Society, the market trend of natural rubber this month was initially downward and then upward, with a turning point around August 15th. The spot rubber market price in China’s natural rubber market was around 12010 yuan/ton on the first day of this month, and then decreased to around 11760 yuan/ton. It then continued to fluctuate and rise to around 12090 yuan/ton. Although the monthly increase was only 0.67%, the maximum amplitude of the half month market was around 2.77%.

Factors affecting this month:

1. The weather in the production area affects the production of new rubber more before and less after

On the supply side, in terms of new rubber production, during the peak season of global new rubber production, in the first half of the month, although the supply of new rubber continued to decline due to latex prices, which suppressed the enthusiasm of rubber farmers to cut rubber, the weather conditions were good, and the increase in new rubber production was relatively significant; High spot inventory, downstream on-demand procurement; Although the import volume of ports in China has decreased, due to the lack of significant growth in downstream demand and consumption, the production and inventory supply of new rubber continue to be high, and prices are under pressure, leading to a downward trend in the market. In the second half of the month, firstly, the main production areas such as Thailand and Vietnam are affected by rainfall, resulting in a reduction in production. Secondly, the expected impact of the recent increase in demand in the product industry has led to an improvement in the enthusiasm of rubber farmers for cutting rubber compared to the previous period; Once again, in the previous stage, traders’ imports decreased, and the pressure on rubber imports slowed down to a certain extent. In terms of inventory, the entry speed of spot inventory has slowed down, and the arrival volume of dark glue at the port has decreased. Driven by the improvement in the production of products in the Qingdao Free Trade Zone’s spot glue warehouse, the speed of destocking has accelerated.

2. The demand is gradually increasing, and the peak season is expected to increase

On the demand side, although the “Golden Nine” is getting closer, downstream product enterprises just need to continue to improve. The domestic sales of tires continued to be insufficient this month, but the demand for foreign trade gradually increased. The demand for domestic travel and logistics industries continued to release, downstream consumption continued to increase, and the operating rate of product factories continued to be high. The natural rubber market continues to rise slightly, and the sentiment of “buying up rather than buying down” in the market is still relatively obvious. The traditional consumption peak season of “Golden Nine Silver Ten” is approaching, and driven by frequent national policies and measures to promote automobile consumption, tire companies have a certain stock demand. With the rebound in demand for latex products and the increase in raw material prices, natural rubber procurement is more active than in the previous stage, but the amplitude is not very prominent.

3. Further Transmission of Rotational Storage News Enhances Market Atmosphere

The news spread in the second half of this month when there was another round of storage news in the market, leading to a brief increase in bullish sentiment during the period, which also led to a volatile and upward trend in the natural rubber market. The recent investment atmosphere in the rubber market has improved.

Future Market Forecast:

Regarding the future market, recent rainfall in Southeast Asia has had a significant impact on the production of new rubber, and the supply of new rubber has slowed down. The current export situation of tire enterprises is good, and factories are operating at a high level. The “Golden Nine Silver Ten” consumption peak season is approaching, and the natural rubber market has some positive demand support. Analysis suggests that natural rubber, which has been at a low market level for a long time, may experience fluctuations and upward trends in the future market driven by the aforementioned factors. However, the demand situation is only showing a positive trend and has not entered a stage of significant increase, so it is inevitable to experience further fluctuations.

Aluminum prices exceeded 19000 yuan/ton in August

According to the Commodity Market Analysis System of Business Society, the average price of domestic aluminum ingots in the East China market on August 30, 2023 was 19043.33 yuan/ton, an increase of 0.56% compared to the previous trading day, and an increase of 3.42% compared to the aluminum price of 18596.67 yuan/ton at 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, it has exceeded 19000 yuan/ton for the first time.

Short term upward momentum

The price of raw material alumina is strong, and the mainstream inventory of aluminum ingots is low in the same period of the past five years, with relatively strong downstream demand.

Fundamentals remain unchanged

Enhanced raw material benefits:

1. The continuous production restrictions in the Sanmenxia area of Henan Province, as well as the increase in overseas bauxite prices, have jointly exacerbated the problem of tight supply of bauxite. The cost of alumina has increased, and the price of alumina has remained 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. 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: Starting from the second half of July, the inventory will continue to be depleted. As of August 24th, the mainstream areas of domestic electrolytic aluminum ingots have a social inventory of 444000 tons, which is 506000 tons compared to July 31st, and 62000 tons have been destocked.

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

On the demand side: Downstream demand has slightly declined and overall maintained a relatively good level. The operating rate of domestic aluminum downstream processing leading enterprises decreased by 0.3 percentage points compared to last week to 63.7%, a decrease of two percentage points compared to the same period last year. From a segmented perspective, the construction of profiles, aluminum foil, and recycled alloy sectors has all experienced a downward trend; The recycled alloy sector has also been downgraded due to insufficient orders; In terms of profiles, although downstream demand in the photovoltaic sector is improving, it is difficult to reverse the pattern of weak operating rates caused by the decline in the construction profile sector.

The price of aluminum fluoride fluctuates and falls

According to the Commodity Market Analysis System of the Business Society, as of August 29th, the domestic quotation for aluminum fluoride was 9425 yuan/ton, a decrease of 1.57% compared to the price of 9575 yuan/ton on August 1st. In August, the demand for aluminum fluoride was sluggish, and the downstream price pressure was severe. The price of aluminum fluoride fell. However, as aluminum fluoride enterprises began to decline, the supply of aluminum fluoride tightened, and the price of aluminum fluoride stabilized. As the prices of raw materials such as fluorite and hydrofluoric acid continued to rise in late August, the cost support for aluminum fluoride increased. In September, the price of aluminum fluoride changed from stable to rising.

The price of raw material hydrofluoric acid fluctuated and increased in August

According to the Commodity Market Analysis System of the Business Society, as of August 29th, the price of hydrofluoric acid was 9766.67 yuan/ton, an increase of 2.99% compared to the price of 9483.33 yuan/ton on August 1st. The price of raw material fluorite has increased, the price of sulfuric acid has skyrocketed, and the cost support for hydrofluoric acid has increased; Recently, some hydrofluoric acid units have been shut down, and there has been little change in the spot supply of hydrofluoric acid; Downstream refrigerants are purchased on demand, but the trend of hydrofluoric acid rise is strong in the future due to the close proximity of gold and silver. Cost support, with increased support for future increases in aluminum fluoride prices.

The price of raw material fluorite increased in August

According to the Commodity Market Analysis System of the Business Society, as of August 29th, the price of fluorite was 3168.75 yuan/ton, an increase of 3.68% compared to the price of 3056.25 yuan/ton on August 1st. The operating rate of fluorite enterprises remains low, and there is still tension in upstream mining. Backward mines will continue to be phased out, and new mines will be added. Mineral investigation work remains challenging. In addition, mining enterprises are facing increasingly strict safety and environmental requirements, making it more difficult to start mining. Due to the tight supply of raw materials, it is difficult to improve the construction of the fluorite market in the short term. The focus of spot negotiations has strengthened, and downstream enterprises have followed up on demand. The support for the future rise of fluorite has increased, and the cost has supported the rise of aluminum fluoride prices.

Market Overview and Forecast

Analysts from the fluoride aluminum industry at the Business Society believe that in August, the demand for fluoride aluminum was sluggish, and downstream customers pressed prices, causing fluctuations and declines in fluoride aluminum prices. However, as the supply of fluoride aluminum enterprises contracted, the price of fluoride aluminum stopped falling and stabilized; In August, the price of hydrofluoric acid fluctuated and increased, the price of fluorite fluctuated and increased, and the cost of aluminum fluoride raw materials increased. In the future, gold and silver are approaching, and demand for aluminum fluoride is expected to rebound due to rising costs. The support for aluminum fluoride’s rise is increasing, and it is expected that aluminum fluoride prices will rebound and rise in the future.