1、 Trend analysis

According to monitoring data from the Business Society, copper prices first fell, then rose, and then fell in April. At the beginning of the month, copper prices were 69680 yuan/ton, and at the end of the month, copper prices fell to 67573.33 yuan/ton, with an overall decrease of 3.02% and a year-on-year decrease of 8.60%.

According to the current chart of the Business Society, copper futures prices in April were generally higher than spot prices, with the main contract being the expected price in two months, and the overall copper market in April was bearish. Towards the end of the month, the main basis has increased, which is a bearish scenario for buying and hedging.

According to LME inventory, LME copper inventory fell first and then opened in April, which corresponds to the rise and then fall of copper prices in April, and overall inventory is still at a historical low.

Macro aspect: In April, the overall overseas economic data was bleak, with the US CPI in March lower than expected and the PPI in March growing by 2.7% year-on-year, lower than expected. As the May interest rate meeting approaches and expectations for a 25 basis point rate hike continue to rise, the market is gradually starting to price the Federal Reserve’s interest rate cut to be later than market expectations.

In terms of supply: The disturbance in the supply side of raw materials has decreased, the supply of copper concentrate is loose, new domestic production capacity has been put into operation, some smelters have been overhauled but raw materials have been replenished in advance, and the overall output is still increasing. In March, China’s electrolytic copper production reached 951400 tons, an increase of 43600 tons compared to the previous month, a growth rate of 4.8%, a year-on-year increase of 12.1%, and an increase of 1900 tons compared to the expected 949500 tons. It is expected that China’s electrolytic copper production will reach 953900 tons in April. Processing fees have rebounded from a decline, and although some smelting enterprises have undergone maintenance, the supply of raw ore and cold materials is sufficient, and the smelting output remains high.

In terms of demand: March April is the traditional peak season for consumption, but the copper rod operating rate has continued to decline recently, and the overall copper material operating rate has not exceeded seasonal performance. Real estate shows a recovery, but recently there has been a decrease in home viewing. Considering lag, subsequent transactions may slow down; New energy vehicle companies have overdrawn their demand for raw materials due to subsidies for accelerating work before the recession, and the reduction in fuel prices has also suppressed some new energy consumption. The slowdown in new energy has affected the demand for copper foil and some copper rods; Air conditioning has high emissions but needs to be verified. After experiencing a sharp decline in copper prices in March and a brief surge in downstream orders, subsequent consumption was overdrawn in advance. After mid April, new orders significantly weakened, and there is a risk of further weakness in the future after entering the off-season.

Based on the above situation, in April, copper supply increased and overall demand was relatively strong, showing a sluggish peak season. High prices of copper continue to suppress demand performance, and the actual consumption power of the spot end has recovered less than in the first quarter. Downstream buying is not strong, spot trading is stagnant, and copper inventory destocking has slowed down. In May, entering the traditional consumption off-season, copper prices are expected to fluctuate weakly in May.

The price of ethylene oxide decreased in April

According to data from Business News Agency, on April 25, 2023, the average spot market price of ethylene oxide in China was 6500 yuan/ton, a decrease of 9.72% compared to the beginning of the month; Compared to the beginning of the year, the price was 6800 yuan/ton, a decrease of 4.41%.

Overview of ethylene oxide industry chain

The terminal demand is lower than expected, and the price center of the main downstream polycarboxylate water reducing agent monomer has shifted downward. The production enthusiasm of polycarboxylate water reducing agent monomer enterprises is not high, and the demand for ethylene oxide is weakened.

Future Market Forecast

The terminal demand is lower than expected, and the production capacity utilization rate of the main downstream polycarboxylate water reducing agent monomer enterprises is not high; The demand for ethylene oxide is expected to deteriorate. It is expected that in the short term, the price of ethylene oxide will continue the current trend, with weak fluctuations being the main trend.

Product name: Potassium chloride (imported)

Latest price (April 24th): 3400 yuan/ton

On April 24, the price of imported potassium chloride in the domestic market rose slightly, 50 yuan/ton or 1.49% higher than that on April 21. At present, the port’s 62% self raised price of white potassium is around 3100-3200 yuan/ton; The self raised price of 60% Dahong granules at the port is around 3100-3300 yuan/ton. Border trade accounts for 62% of Russian white potassium at around 2800-2900 yuan/ton. The arrival price of potassium chloride in domestic salt lakes is around 3100-3200 yuan/ton. The international potassium fertilizer market has slightly declined. The downstream market for potassium carbonate and potassium nitrate has recently experienced a slight decline, and the enthusiasm for downstream procurement has weakened.

In the future, domestic potassium chloride prices may fluctuate slightly and fall, with consolidation being the main trend. The import market value of potassium chloride is about 3200 yuan/ton.

According to the Commodity Market Analysis System of the Business Society, the polyaluminum chloride commodity index on April 23 was 97.30, unchanged from yesterday, a decrease of 31.79% from the cycle’s highest point of 142.64 points (2021-11-01), and an increase of 15.39% from the lowest point of 84.32 points on August 18, 2020. (Note: The cycle refers to April 1st, 2019 to present)

From the above figure, it can be seen that the market for polyaluminum chloride has been declining for more than three consecutive months and is still continuing its downward trend. According to the Commodity Market Analysis System of the Business Society, during the week of April 17-23, 2023, the solid (industrial grade, with a content of ≥ 28%) polyaluminum chloride market in China continued to fluctuate slightly and decline. On April 17, the market reported 1828.75 yuan/ton, while on April 23, the market reported 1800 yuan/ton, a weekly decrease of 1.57%. The production of water treatment enterprises in China’s main production areas is normal, with sufficient spot inventory. Downstream procurement demand continues to be weak, and market transactions are average. The market for polyaluminum chloride continues to be weak.

Raw material hydrochloric acid: According to the Commodity Market Analysis System of Business Society, the domestic hydrochloric acid market remained stable at around 198 yuan/ton from April 17th to 23rd. From the supply side, the domestic hydrochloric acid market price was temporarily stable this week, and the manufacturer’s inventory was average. From the perspective of the upstream and downstream industrial chain of hydrochloric acid, the market situation of upstream liquid chlorine has significantly declined, and cost support is insufficient; The downstream market has slightly declined, and downstream purchasing willingness has weakened. It is expected that hydrochloric acid will experience a slight fluctuation and decline in the near future.

Liquefied natural gas for production. According to the Commodity Market Analysis System of the Business Society, domestic liquefied natural gas prices remained volatile and upward from April 17th to 23rd. Among them, on April 17th, the average price of liquefied natural gas in China was 4206 yuan/ton, and on April 23rd, the average price was 4524 yuan/ton, a weekly increase of 7.56%. Recently, the domestic liquefied natural gas market has been improving, and downstream stocking demand is constantly increasing. The increase in raw gas prices has led to positive cost support and a strong bullish atmosphere in the industry. It is expected that domestic liquefied natural gas prices will continue to rise in the short term.

Future Market Forecast: The market for raw material hydrochloric acid has remained stable in the near future, with increased fuel costs and increased cost support. However, due to the current abundant stock of polyaluminum chloride in the market, downstream demand continues to be weak under the current economic situation, and market transactions continue to be weak. It is expected that the future market for polyaluminum chloride will continue to decline slightly in a stable manner.

According to the Commodity Market Analysis System of the Business Society, as of April 19th, the average price quoted by domestic industrial grade 85% formic acid enterprises was 3875.00 yuan/ton, which is unchanged compared to last Friday (April 14th).

Recently, the domestic industrial grade 85% formic acid market has remained high and stable. Recently, the price of raw material sulfuric acid has dropped, and the market for raw material methanol is relatively strong. The cost support is limited. The downstream pesticide, rubber, leather, and pharmaceutical industries purchase goods according to market demand, with rigid demand being the main focus. The focus of negotiations in the formic acid market is stable.

Upstream product: upstream sulfuric acid. On April 18, the price of domestic sulfuric acid market fell slightly, 13.33 yuan/ton, 5.03% lower than that on April 17, 79.11% lower than that on the same period last year; Upstream methanol, according to the Commodity Market Analysis System of Business Society, the reference price for methanol on April 18th was 2540.83, a decrease of 0.81% compared to April 1st (2561.67).

Business Society formic acid analysts believe that the current cost support is average, and market transactions are mainly based on demand. It is expected that the domestic industrial grade 85% formic acid market will remain stable in the short term, and more attention needs to be paid to market news guidance.