Aluminum prices moved down in October

According to the Commodity Market Analysis System of Business Society, on October 30, 2023, the average price of domestic aluminum ingots in the East China market was 19163.33 yuan/ton, a daily increase of 1.277%, and a decrease of 3.49% compared to the aluminum price of 19856.67 yuan/ton at the beginning of the month (October 1).

In the long term, the current price is in a sideways range after a high decline. Since May, the price has been fluctuating below 19000 yuan/ton, breaking through 19000 yuan/ton at the end of August. In September, aluminum prices first fell and then rose, and in October, the center of gravity of aluminum prices returned to around 19000 yuan/ton.

Overview of Fundamentals

Loose supply

Supply side: Recently, a certain electrolytic aluminum enterprise in Inner Mongolia has added 200000 tons of production capacity and is gradually entering the production cycle. It is expected to reach full production by December. Electrolytic aluminum enterprises in the southwest region are basically resuming production, and we will pay attention to whether the precipitation in the southwest region in November will once again interfere with production. At present, the wave of resuming production has basically ended, and the overall supply is relatively loose. However, there are recent news on the market that Yunnan will reduce production.

The demand side rebounded month on month and decreased year-on-year

In terms of demand: Last week, the operating rate of domestic aluminum downstream processing leading enterprises increased by 1.2 percentage points compared to the week before the holiday to 64.5%, a decrease of 2.7 percentage points compared to the same period last year.

Due to the entry of cables into the industry’s centralized delivery period, the terminal pickup volume has significantly increased, driving a significant increase in operating rates; The operating rates of aluminum strip and aluminum foil plates have slightly increased; The recycled aluminum alloy sector is mainly due to the resumption of normal production and a rebound in operating levels after the holiday, but actual demand has not significantly increased yet. However, only the operating rate of the profile sector has declined, especially the construction profile sector is relatively weak.

Narrow fluctuation in cost

Cost side: The spot market for alumina continues to rise due to supply side production cuts. The prices of coal at ports and pitheads have shown a downward trend, and the mainstream self owned power plants in Shandong have once again lowered their coal procurement prices for November. The immediate full cost of electrolytic aluminum is around 16231 yuan/ton, a month on month increase of 33 yuan/ton. The recent pressure on coal prices has to some extent limited the expected increase in future electricity costs for electrolytic aluminum. In addition, the expected decrease in procurement prices for auxiliary materials such as pre baked anodes in November is expected to hedge against a slight increase in alumina, and it is expected that the short-term domestic electrolytic aluminum cost will mainly fluctuate within a narrow range.

Inventory increased month on month

In terms of social inventory, following the start of destocking in the second half of July, inventory is relatively low. As of October 30th, the social inventory of mainstream electrolytic aluminum ingots in China was 612000 tons, with a cumulative inventory of 57000 tons compared to October 7th. Based on year-on-year data, it is close to the 636000 tons in the same period of last year’s post holiday history and still at a low level in the same period of the past five years.

Future market forecast

Electrolytic aluminum production enterprises mainly maintain stable production and have large operating capacity. Currently, there is a surplus of aluminum ingot inventory after the holiday, and the supply of aluminum ingots is sufficient to suppress aluminum prices. However, the demand in the downstream peak season is partially fulfilled, with strong cost support and narrowed downward space. It is expected that in the short term, the probability of aluminum price fluctuations and sideways operation will increase.

According to monitoring data from Business Society, as of October 27, 2023, the factory price of domestically produced industrial grade dimethyl carbonate was set at 4200 yuan/ton. Compared with October 1 (the reference price of dimethyl carbonate was 4333 yuan/ton), the price was reduced by 133 yuan/ton, a decrease of 3.08%.

In October, the domestic dimethyl carbonate market as a whole showed weak volatility and a downward trend. In early October, after returning from the Double Festival, the overall performance of the domestic dimethyl carbonate market was poor. Downstream demand was weak, and the trading atmosphere on the market was cold. There were few new orders and transactions. The shipment of dimethyl carbonate was hindered, and inventory continued to accumulate. Some dimethyl carbonate factories and suppliers began to reduce profits and shipments, and subsequently lowered the price of dimethyl carbonate by 100-200 yuan/ton. On October 15th, The domestic market price of dimethyl carbonate is around 4100-4300 yuan/ton, and the lower end price is around 3950-4000 yuan/ton.

In late October, the dimethyl carbonate market fluctuated. As the early market fell to a low point and downstream bargains were replenished, the market ushered in a period of positive demand. The dimethyl carbonate market also stopped falling and slightly increased, with an increase of 50-100 yuan/ton. However, it was difficult for the demand side to continue supporting the dimethyl carbonate market. After a short period of stock preparation, the on market trading of dimethyl carbonate returned to calm, and the market situation also weakened again. On October 27th, the domestic market price of dimethyl carbonate was around 4000-4300 yuan/ton, while the lower price was around 3900 yuan/ton.

Analysis of Future Market Trends

At present, the downstream polycarbonate of dimethyl carbonate is performing mediocrely, and there is still a wait-and-see sentiment on the market. It is mainly important to be cautious when stocking up. The dimethyl carbonate data analyst from the business company believes that in the short term, the market for dimethyl carbonate will mainly adjust and operate within a narrow range, and the specific trend needs to pay more attention to changes in supply and demand news.

According to the monitoring of the Commodity Market Analysis System of the Business Society, the prices of industrial grade and battery grade lithium carbonate have stopped rising this week and are now undergoing a correction. On October 26th, the average domestic mixed price of industrial grade lithium carbonate was 160600 yuan/ton, a decrease of 4.18% compared to the average price of 167600 yuan/ton on October 22nd. On October 26th, the average domestic mixed price of battery grade lithium carbonate was 173000 yuan/ton, a decrease of 4% compared to the average price of 180200 yuan/ton on October 22nd.

By observing market changes, it can be seen that after a wave of recovery in lithium carbonate prices last week, spot prices have once again stopped rising and retreated this week, and lithium carbonate futures prices have also continued to decline. On the supply side, after the price rebound, some lithium salt factories have marginal resumption of production. In addition, a certain salt lake in Qinghai may plan to concentrate sales again in the near future, the available supply of goods in the spot market is not as tight as expected, and the subsequent state of de inventory has also slowed down, further putting pressure on prices.

In terms of demand, the current terminal demand is still sluggish, and there is no significant improvement in the demand for lithium salt procurement in downstream positive electrodes, hexafluoride, and other links. There are few zero order transactions in the market, and some traders are under inventory pressure and want to exchange at low prices, resulting in significantly lower quotations. And some salt factories have also wavered in their attitude towards favoring prices, with some manufacturers’ quotations declining and the focus of market quotations and transactions declining. At present, the market still maintains an unprepared and unaffordable attitude towards high priced lithium salts, leading to a gradual decline in market focus and a downward trend in lithium salt prices.

The price of lithium hydroxide is showing a downward trend. Affected by the correction in lithium carbonate prices, the price of lithium hydroxide is following the downward trend. However, the current downstream demand is still weak, mainly in demand procurement, and there are few zero transactions, so the price continues to decline.

The downstream price of lithium iron phosphate has slightly decreased, with insufficient downstream demand and a cold purchasing atmosphere. The upstream cost side support is weak, and the overall market negotiation focus is low. Manufacturers mainly supply contract customers, and the number of new orders is limited.

In terms of futures, on October 26th, the opening price of the LC2401 contract for lithium carbonate futures on the Guangzhou Futures Exchange was 150350 yuan/ton, with a maximum price of 152600 yuan/ton, a daily decrease of 1.66%, with 3711000 transactions and 84140 positions.

Analysts from Business Society Lithium Carbonate believe that the current stalemate in the upstream and downstream of the industry chain is still ongoing, with few transactions in the downstream. The pessimism in the spot market has intensified. Against the backdrop of continued oversupply in the current market, prices continue to decline, and it is expected that lithium carbonate prices will experience weak fluctuations in the short term.

1、 Price trend

According to the Commodity Market Analysis System of the Business Society, the average market price of 55% powdered ammonium phosphate in China on October 17th was 3083 yuan/ton. On October 24th, the average market price of 55% powdered ammonium phosphate in China was 3083 yuan/ton. This week, the market price of monoammonium phosphate remained stable.

According to the Commodity Market Analysis System of the Business Society, the average market price of 64% diammonium phosphate in China on October 17th was 3883 yuan/ton. On October 24th, the average market price of 64% diammonium phosphate in China was 3900 yuan/ton. This week, the market price of diammonium phosphate increased by 0.43%.

2、 Market analysis

The market price of ammonium phosphate has steadily increased this week. The high level operation of raw material phosphate rock, the increase in raw material sulfur price, and cost support are favorable. At present, negotiations are mainly focused on the monoammonium phosphate market, and the market in the Northeast region follows up as needed. The factory still has support to be provided. The demand for diammonium phosphate in the market has shown good performance, with an increase in on-site inquiries and a positive trading atmosphere. As of October 24th, the market price of 55 powdered ammonium in Hubei region is about 3100 yuan/ton, while the factory price of 55 powdered ammonium in Henan region is about 3100 yuan/ton, with actual negotiations being the main focus. The market quotation for 64% ammonium chloride in Shandong region is around 3900 yuan/ton, and the actual transaction is negotiated.

In terms of raw material sulfur. This week, the domestic sulfur market trend is dominant. As of October 24th, the reference average price of sulfur in East China is 926.67 yuan/ton.

In terms of raw phosphorus ore. This week, the overall high level consolidation of the phosphorus ore market has been operating, and there has been little change in the supply and demand side of the site. The overall supply of mid to high-end grade phosphorus ore in some regions is still tight, while downstream demand remains stable, with most of the orders already in demand and pre orders. Currently, the overall price of phosphorus ore in the site has not changed much. As of October 24th, the domestic market price of 30 grade phosphate ore is around 950-1050 yuan/ton.

3、 Future Market Forecast

Analysts from the Business Society believe that due to cost support and pending orders, the ammonium phosphate market has steadily risen in recent days. At present, the market is operating well, with manufacturers and distributors mainly offering discounts. It is expected that the short-term market price of ammonium phosphate will steadily rise.

Price trend

Recently, the domestic EVA market has experienced significant stability and slight fluctuations, with spot prices often showing sideways trends. According to the Commodity Market Analysis System of the Business Society, as of October 23, the benchmark price of EVA in China was 12733.33 yuan/ton, a price level decrease of 3.29% compared to the beginning of the month.

Cause analysis

In terms of raw materials:

The overall supply of ethylene at the raw material end is sufficient, and the supply of port inventory is stable. The cost side is unstable, and the benefits for ethylene are not obvious. Operators are often bearish about the current ethylene market;

The trading situation in the vinyl acetate industry is average, and the follow-up of on-site stocking is weak. At the same time, the weakening of upstream raw materials such as ethylene has led to a weak guidance for the vinyl acetate market, and it is expected that the market may continue to be weak. The market for EVA raw materials is weak, and support for the EVA market has declined.

On the supply side:

Recently, domestic EVA enterprises have experienced small-scale maintenance, resulting in a narrow decrease in industry operating rates of around 4% to 77%. The overall inventory pressure of the enterprise is moderate, and the supply pressure is not yet obvious. Some manufacturers have lowered their factory prices, resulting in a stalemate among traders. EVA suppliers have average support for spot goods.

In terms of demand:

The recent sluggish EVA season has not improved. The demand for photovoltaic film has been exhausted for a long time, and there is currently insufficient consumption. The demand for foam shoe materials has been weak for a long time, and the weak demand for EVA continues. Last week, companies focused on just getting goods and were cautious in their operations, without any hoarding operations. The trading volume on the market is flat, with actual orders concentrated in low-end sources, while high priced sources are more susceptible to resistance.

Future Market Forecast

Overall, the EVA market performed evenly last week. The raw material market has weakened, and the support for EVA spot is loose. There is a certain decline in industry load, and the level of supply pressure is average. At present, the EVA market is plagued by long and short positions, with prices falling at a balance point. It is expected that the EVA market may continue to remain stagnant in the short term.