Market analysis for this week

According to the Commodity Market Analysis System of Shengyishe, as of the 31st, the average price of magnesium ingots in the domestic market was 20600 yuan/ton, a decrease of 1.12% compared to the previous week. This week, magnesium ingot prices have been weak and downward, due to the continued weak downstream demand, coupled with some factories resuming work and slightly increasing production, magnesium prices have been suppressed.

In terms of supply and demand

The supply and demand sides continue to engage in a game, with enterprises in the main production areas gradually resuming production and market supply continuously increasing. However, downstream demand has not improved, and domestic market transactions are sluggish. The foreign market has entered traditional holidays, resulting in a decrease in orders. In addition, due to the recent increase in sea freight rates, foreign orders have been reduced.

In terms of raw materials

This week, the market price of ferrosilicon in Ningxia is around 6550-6700 yuan/ton, with an average market price of 6661.43 yuan/ton. The spot price of ferrosilicon is operating weakly. Currently, there is sufficient inventory of ferrosilicon, and it is difficult to release it in the pre holiday end market. Steel mills still have the willingness to purchase at lower prices, and it is expected that the price of ferrosilicon may fluctuate weakly. The price of orchid charcoal remains stable, with Shenmu orchid charcoal small materials priced at around 1080-1160 yuan/ton. Currently, orchid charcoal enterprises mainly consume inventory while maintaining their own profits, and production often continues at low loads. It is expected that the short-term price will stabilize, and there is some cost support for magnesium plants.

Future Market Forecast

The short-term supply of magnesium in the market is more than expected, and the overall market is not optimistic. However, the current magnesium price factory profits are close to the bottom, and there is limited room for further reduction in magnesium prices. It is expected that the price of magnesium ingots will remain stable.

According to the Commodity Market Analysis System of Business Society, the recent trend of domestic natural rubber spot prices has continued. The spot rubber market in China was around 12880 yuan/ton on December 28th and around 12380 yuan/ton on December 18th, with an increase of 4.04%.

Recently, the overall price of natural rubber has risen, with the Shanghai rubber 05 contract rising from around 13600 yuan/ton to around 13900 yuan/ton. Currently, Thailand imports latex barrels at around 12200-12400 yuan/ton, bulk at around 11000-11200 yuan/ton, Vietnam imports latex bulk at around 10200-10300 yuan/ton, and domestically produced latex bulk at around 10100-10300 yuan/ton.

On the supply side: Thailand is currently in the peak season for rubber cutting, but local areas are experiencing floods and limited raw material output; Some production areas in Vietnam have entered a period of reduced production, and factories are gradually entering a reserve period; Domestic Hainan production areas have gradually entered the hydrocarbon cutting period; The Yunnan production area has entered a period of complete cessation of harvesting. Before the new year, the processing plant’s enthusiasm for rubber collection and production increased, supporting the natural rubber market. As of December 24th, the total inventory of Tianjiao bonded and general trade in Qingdao area was 664600 tons, a decrease of 4000 tons from the previous period and a decrease of 0.59% month on month. Qingdao Free Trade Zone continues to reduce inventory, and the rate of total inventory reduction has slowed down.

Demand side: Recently, there has been a slight adjustment in the production of all steel tires, with weak demand for rubber. It is understood that as of late December 2023, the operating load of all steel tires in rubber tire enterprises in Shandong region was 5.7%; The operating load of semi steel tires in domestic rubber tire enterprises is 7.2%.

Import and export: According to data released by the General Administration of Customs of China, China imported a total of 685000 tons of natural and synthetic rubber (including latex) in November, a year-on-year decrease of 7.2%. From January to November, China imported a total of 7.229 million tons of natural and synthetic rubber (including latex), a year-on-year increase of 9.6%. The export volume of rubber tires from China in November was 760000 tons, a year-on-year increase of 34.6%; The export amount was 13416.33 million yuan, a year-on-year increase of 30.3%. From January to November, the cumulative export volume of rubber tires from China was 8.12 million tons, a year-on-year increase of 16.4%; The export amount was 142716.27 million yuan, a year-on-year increase of 19.5%.

Market forecast: In the near future, domestic and foreign raw material output will be limited, and Yunnan region will enter a comprehensive shutdown period. Some production areas in Thailand, Vietnam, and Hainan will enter a shutdown period due to weather and other reasons; Half steel tire enterprises have sufficient foreign trade orders, high operating rates, and limited support for the rubber market; Recently, some companies have been stocking up before the holiday, and coupled with the increasing sentiment of buying up instead of falling downstream, it is expected that the natural rubber spot market will maintain a high consolidation trend in the near future.

1、 Price trend

According to the monitoring of the commodity market analysis system of Shengyishe, the market price of isopropanol first rose and then fell in December, and overall, the market price of isopropanol fell. On December 1st, the average price of isopropanol in China was 8100 yuan/ton, while on December 27th, the average price was 7890 yuan/ton. The price dropped by 2.59% during the month.

In December, the market price of isopropanol first rose and then fell, and overall, the market price of isopropanol fell. In the first ten days, the market for isopropanol was good, and downstream enterprises inquired more, so procurement was relatively cautious. Overall, the market trading is acceptable, and the manufacturer’s quotation is relatively firm and upward. In the middle of the month, the market situation was light and trading sentiment was average, while the isopropanol market fluctuated and fell. In the latter half of the year, the market price of isopropanol fell, and the overall trading sentiment in the market was poor. Downstream procurement is cautious, with on-demand orders being the main focus. Many businesses maintain a wait-and-see attitude, with few inquiries and slow shipments. As of now, the majority of isopropanol market quotations in Shandong region are around 7500-7800 yuan/ton; The majority of isopropanol prices in the Jiangsu and Zhejiang regions are around 7900-8200 yuan/ton.

In terms of raw material acetone, overall in December, the domestic acetone market prices fell. On December 1st, the average price of acetone was 7062.5 yuan/ton, and on December 27th, the average price was 6990 yuan/ton. The price for the month decreased by 1.03%. At present, the overall purchasing power of the downstream is limited, and the market focus is downward. It is expected that the domestic acetone market will be weak in the short term.

In terms of propylene, according to the commodity market analysis system of Business Society, the domestic propylene (Shandong) market fluctuated and fell in December. At the beginning of December, the market average was 7105.75 yuan/ton, with an average price of 6965.75 yuan/ton on December 27th, a monthly decrease of 1.97%. Currently, due to the influence of downstream polypropylene, market demand is weak and prices have slightly decreased. The propylene analyst from the Chemical Branch of Shengyishe believes that in the short term, there is an increasing trend in propylene supply, and the demand side is stable first. We closely monitor changes in the news side and anticipate a possible decline in the propylene market in the future.

3、 Future Market Forecast

An isopropanol analyst from the Chemical Branch of Shengyishe believes that the overall decline in raw material acetone in December is mainly due to the fluctuation of propylene, and cost support is slightly weak. As the end of the month approaches, downstream and traders remain cautious, resulting in poor market transactions. It is expected that the isopropanol market will operate weakly in the short term.

According to the Commodity Market Analysis System of Business Society, the spot market price of gold on December 26, 2023 was 480.64 yuan/gram, an increase of 1.30% compared to the spot market price of gold at the beginning of this month (December 1), which was 474.48 yuan/gram.

According to the Commodity Market Analysis System of Business Society, the average price of silver in the market on December 25, 2023 was 6060 yuan/kg, a decrease of 1.83% compared to the average price of 6173 yuan/kg in the silver market at the beginning of this month (December 1).

From November 2022 to early February 2023, precious metal prices significantly increased. From March to the end of April, due to the impact of the US banking crisis, precious metal prices once again entered a period of skyrocketing. Silver prices began to fall in May, while gold remained relatively strong. In June, gold prices hit a high level and silver prices began to rise. After July, gold prices became stronger. In mid to late September, precious metal prices were affected by news from the Federal Reserve, leading to a high level correction. In October, due to geopolitical factors, the risk aversion sentiment rose and continued to rise. In early November, the high range was weak and fluctuated horizontally. At the end of the month, precious metal prices resumed, and silver saw a stronger monthly increase than gold. Silver prices slightly declined in December, while gold prices remained relatively strong

At present, the price of precious metals has been fluctuating in the high range after reaching a new decade high in the early stage. Under the high inflation and high interest rate hikes we anticipated earlier, 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 have increased their holdings of gold reserves, which has also provided some support for gold prices. It is reported that in the third quarter of 2023, central banks and other institutions of various countries increased their holdings of gold by 337.1 tons, an increase of 93% compared to the previous quarter.

The recent release of US GDP and inflation data in the third quarter has strengthened the possibility of aggressive interest rate cuts when the cooling level is deeper than expected. The Federal Reserve’s expectation of interest rate cuts in 2024 has increased, which is beneficial for precious metal prices. In the short term, it is expected that precious metals will operate stronger.

Cobalt prices have fluctuated and risen this week

According to the cobalt market analysis system of Business Society, as of December 25th, the cobalt price was 217300 yuan/ton, an increase of 1.31% compared to December 18th, when the cobalt price was 214500 yuan/ton. The non-ferrous sector has seen a simultaneous rise in prices, with international cobalt prices stopping their decline and rising. This week, cobalt prices have fluctuated and risen.

The market for the non-ferrous sector is on the rise

According to the commodity market analysis system of Business Society, the basic non-ferrous index fluctuated and rose in December, with a rebound in macroeconomic conditions and a rebound in metal prices, which is beneficial for the cobalt metal market.

International cobalt prices stop falling and rise

According to the trend chart of MB cobalt price, it can be seen that the price of MB cobalt fluctuated and fell in December. However, over the weekend, the price of MB cobalt stopped falling and rebounded slightly, while the international cobalt price stopped falling and rebounded. The international cobalt market has shown a trend of recovery, which is beneficial for the domestic cobalt market.

Overview and Outlook

According to Bai Jiaxin, a data analyst at Business Society, the non-ferrous sector is generally on the rise, macroeconomic conditions are favorable, and the international cobalt market is recovering, which is beneficial for the domestic cobalt market. Expected cobalt prices to fluctuate and consolidate in the future.