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.

Price trend

According to the Commodity Market Analysis System of Business Society, sulfur prices in East China have slightly increased this week. On August 27th, sulfur prices were at 1070.00 yuan/ton, and at the beginning of the week, sulfur prices were at 1063.33 yuan/ton, an increase of 0.63%, an increase of 25.39% compared to the beginning of the month.

The domestic sulfur market is consolidating and operating, with high and firm prices. The demand for phosphate fertilizer in the end market is improving, downstream trading is active, and there is good support for sulfur procurement. Refinery supply is normal, and enterprise shipments are smooth. Some manufacturers have raised their prices based on their own inventory situation, and sulfur prices are generally stable. As of the 27th, the mainstream price of solid sulfur in refineries in Shandong region is around 1080-1130 yuan/ton; The mainstream price of liquid sulfur is between 1000-1160 yuan/ton.

Downstream market of the industrial chain

The downstream sulfuric acid price remained stable, with the average domestic sulfuric acid price on August 27th at 266.00 yuan/ton, which was at the same level as the price of 266.00 yuan/ton at the beginning of the week. The demand for phosphate fertilizer is strong, and the downstream market is improving, supporting the demand for sulfuric acid. Acid companies have no inventory pressure, actively shipping, and prices are high and firm. Coupled with the support of raw material sulfur costs, the sulfuric acid market is stable and wait-and-see.

The market for monoammonium phosphate remained strong and rising. On August 27th, the average market price of 55% powdered monoammonium was 2916.67 yuan/ton. At the beginning of the week, the average market price of 55% powdered monoammonium was 2866.67 yuan/ton, with a price increase of 1.74%. The phosphate fertilizer market is improving, and there are sufficient orders for monoammonium phosphate to be shipped. Most manufacturers have suspended quotations and stopped receiving orders, resulting in tight market supply. Traders are reluctant to sell, but prices are rising. Coupled with favorable cost support, the focus of monoammonium phosphate factory trading continues to rise.

Future Market Forecast

Business Society sulfur analysts believe that the operation of sulfur refinery units is normal, market supply is stable, downstream phosphate fertilizer market is improving, demand continues to be positive, refinery shipments are smooth, and it is expected that the short-term sulfur market will continue to be strong. In the future, specific attention will be paid to downstream follow-up.

According to the monitoring of the Commodity Market Analysis System of the Business Society, the price of potassium sulfate with a 50% content at the beginning of this week was 3316 yuan/ton, and the price of potassium sulfate with a 50% content at the end of this week was 3333 yuan/ton, a decrease of 0.50% in price.

The domestic market price of potassium sulfate also continues to rise with the price of potassium chloride, and the number of inquiries for granular potassium sulfate in the northern market has significantly increased. Currently, Mannheim potassium sulfate manufacturers have a large number of pending orders in the early stage, and some factories have continued to accept orders until mid to late September. Currently, the factory price of 50% Mannheim potassium sulfate powder is mostly between 3250 and 3400 yuan/ton, and the factory price of 52% Mannheim potassium sulfate powder is mostly between 3400 and 3600 yuan/ton.

The overall supply of domestic potassium fertilizer sources is relatively tight, with raw material prices continuing to rise and nitrogen fertilizer prices fluctuating. The procurement of raw materials by downstream compound fertilizer factories is slightly difficult, and most factories maintain a “use and collect” model for potassium fertilizer, with cautious factory operations.

Prediction: The domestic potassium fertilizer market is facing tight supply, and it is expected that the market price may mainly show a slight upward trend.

According to data monitored by Business Society, as of August 24th, the price of high-quality power type lithium iron phosphate is 89000 yuan/ton, which is mainly stable compared to the same period last week. Currently, the mainstream price is around 89000 yuan/ton, mainly for contract customers, and new orders are not accepted.

This week, the stable operation of lithium iron phosphate is the main focus. Last week, the price for the same period was 89000 yuan/ton. Currently, the mainstream price is around 89000 yuan/ton, and the overall market is weak and downward. Downstream replenishment is on demand, while upstream lithium carbonate is stable and weak. The cost support for lithium iron phosphate is weak. In the short term, lithium carbonate will maintain its previous trend, and manufacturers will only supply old customers with goods, while new customers will not take orders.

Chemical Commodity Index: On August 23, the chemical index stood at 896 points, an increase of 1 point compared to yesterday, a decrease of 36.00% from the cycle’s highest point of 1400 points (2021-10-23), and an increase of 49.83% from the lowest point of 598 points on April 8, 2020. (Note: The cycle refers to the period from December 1st, 2011 to the present).

Analysts from Business Society believe that the lithium iron phosphate market will operate steadily and weakly in the short term.