Aluminum price stops falling and stabilizes

 

According to data from Business News Agency, on March 27, 2023, the average price of domestic aluminum ingots in the East China market was 18416.67 yuan/ton, with a daily increase of 0.44%. Compared to the beginning of the month (March 1), the aluminum price was 18416.67 yuan/ton, which was flat. After recovering in January, aluminum prices fell in mid February. After the Federal Reserve raised interest rates in March, aluminum prices stopped falling and stabilized.

 

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In the long term, the current price has retreated significantly, increasing by 5.54% compared to the recent recovery starting point (July 14, 2022), where the average market price of aluminum ingots was 17450 yuan/ton. The recent high aluminum price occurred on December 5th, with the average aluminum ingot market price of 19536.67 yuan/ton, a decrease of 5.73%.

 

Overview of fundamentals

 

1. High inventory levels showed month-on-month inventory removal performance

 

As of March 23, the domestic mainstream social inventory was 1.218 million tons, compared to 1.076 million tons of social inventory at the beginning of February (February 2), with a cumulative inventory of 142000 tons; Compared to the social inventory of 1427000 tons at the beginning of March (March 2), 209000 tons were removed from the warehouse.

 

2. Gradual digestion of macro pressure

 

With the relative decline of macro panic sentiment and the implementation of the Federal Reserve’s interest rate hike in March, macro negative factors in the early stage gradually digested.

 

3. List of import and export data

 

According to customs data, in January-February, China imported about 150000 tons of aluminum ingots, an increase of 92800 tons year-on-year. The total export of aluminum ingots was about 3700 tons, a year-on-year decrease of 27000.

 

4. Domestic supply side

 

Guangxi and Sichuan regions have a small amount of electrolytic aluminum production capacity, while Gansu, Guizhou, and Inner Mongolia have a small amount of new production capacity.

 

After three rounds of production restriction, the production capacity in Guizhou has decreased by 760000 tons compared to the end of November. A new round of production reduction in Yunnan has been in place, with a total reduction of about 780000 tons of production capacity until the end of the dry season in May.

 

Aftermarket forecast

 

From the perspective of supply side, recent production reductions in Yunnan-Guizhou region and inventory data show that the social inventory of electrolytic aluminum is still relatively high, but there is a trend of destocking. In the short term, electrolytic aluminum will be suppressed and alleviated by macro factors. It is expected that the aluminum price will stop falling and stabilize, and the future market will be dominated by strong shocks. In the near future, it is expected to wait and see the strength of downstream consumption.

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Zinc prices fluctuated and consolidated this week

 

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According to data monitoring by the Business News Agency, as of March 24th, the zinc price was 22506 yuan/ton, a slight increase of 0.18% compared to the fluctuation of 22466 yuan/ton on March 17th; Compared to the zinc price of 23346 yuan/ton on March 1, the decrease was 3.60%. Optimistic expectations of market demand coexisted with sluggish sentiment, and zinc prices fluctuated and consolidated this week.

 

Non ferrous metals confidence index

 

The confidence index of nonferrous metal enterprises in the first quarter of 2023 was 49.8, up 1.4 points from the previous quarter. The confidence index rebounded again after two consecutive quarters of decline, approaching the critical point of 50. In the first quarter of 2023, the confidence index of nonferrous metal enterprises showed a steady increase, but it has not fully recovered to above the critical point of 50. The overall operating environment of the industry and the restoration of enterprise confidence require a certain period of time. Limited support for zinc market gains.

 

Supply and demand of international zinc market

 

According to data released by the Kazakhstan Bureau of Statistics, Kazakhstan’s refined zinc production in January-February fell 14.2% year-on-year. The output of the international zinc market has decreased, the supply of zinc is insufficient, and the upward momentum of the zinc market has increased.

 

According to data released by the European Automobile Manufacturers Association, new car registrations increased by 12% in February to 902775 vehicles, the seventh consecutive month of growth. The increase in car registration and demand for zinc in the market has led to a strong upward momentum in zinc prices in the future.

 

US Treasury Secretary soothes the market, and the three major US stock indexes collectively closed higher

 

U.S. Treasury Secretary Janet Yellen plans to tell lawmakers at a congressional hearing on Thursday that the U.S. federal government will be prepared to take further measures to protect depositors’ deposits when necessary. Yellen has changed her mouth to appease the market. The three major indexes of U.S. stocks collectively closed higher, the Nasdaq Composite Index rose 1%, the price of short-term U.S. treasury bond bonds rose, crude oil futures fell 1%, and gold futures rose more than 2%. Stimulated by the positive news, the commodity market is expected to recover, with the London zinc price surging in the evening, and the upward momentum of the zinc market has increased.

 

Aftermarket Forecast

 

Data analysts from the Business News Agency believe that the demand in the international zinc market has rebounded and the supply has declined. The recent zinc market has some positive support, but the economic recovery is less than expected, with limited support for the rise of the zinc market. The US Treasury Secretary reassured the market that the commodity market was positive, but expectations of economic weakness remained, and support for zinc price increases was difficult to sustain. It is expected that the zinc market will fluctuate and consolidate in the future.

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1、 Price trend

 

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According to the monitoring data of the Business News Agency, the average factory price of domestic ammonium sulfate on March 17 was 1063 yuan/ton, and the average factory price of domestic ammonium sulfate on March 23 was 950 yuan/ton. This week, the price of ammonium sulfate fell 10.66%.

 

2、 Market analysis

 

The market price of ammonium sulfate fell sharply this week. At present, the market demand for ammonium sulfate continues to weaken, with a small amount of downstream purchases and weak new orders. The export performance of ammonium sulfate is poor, and the market situation is sluggish. This week, the bidding price of coking grade ammonium sulfate fell sharply, with domestic grade ammonium sulfate following the downward trend. As of March 23, the mainstream ex-factory quotation for coking grade ammonium sulfate in Shandong is around 870 yuan/ton. The mainstream ex-factory quotation for domestic ammonium sulfate in Shandong is 950-980 yuan/ton.

 

The price trend of downstream compound fertilizer is weak this week. The price of raw materials has declined, and the cost support for compound fertilizers has weakened. The industry is dominated by wait-and-see, with fewer transactions on the market and a light market atmosphere. It is expected that the compound fertilizer market will be weak in the short term.

 

3、 Aftermarket Forecast

 

According to ammonium sulfate analysts from the Business Agency, the domestic market for ammonium sulfate has continued to weaken recently, while the foreign market is still sluggish. Currently, the enthusiasm for downstream procurement is not high. Under the guidance of negative factors, it is expected that the ammonium sulfate market will continue to be weak in the short term, mainly due to consolidation and operation.

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From March 10 to March 17, 2023, the market price of antimony ingots in East China fell, with the price at 87250 yuan/ton last weekend and 85500 yuan/ton this weekend, down 2%.

 

The K-bar chart of commodity prices uses the concept of a price trend K-line to reflect weekly or monthly price changes in the form of a histogram. Investors can buy and sell investments based on the changes in the K-bar chart. Red indicates: rising; Green indicates a decline; The height of the K column indicates the range of fluctuation. From the above figure, it can be seen that the recent upward trend of the antimony ingot market around the Spring Festival has entered a stable period since mid March, and entered a downward channel in mid April. At the end of April, the decline slowed down, and the trend stabilized in May. In June, the price entered an upward channel. After a brief stable period in July, it fell again. After August, the market stabilized step by step, and remained flat for eight consecutive weeks. At the end of October, the price began to decline continuously. After December, the price continued to recover, with a price correction of 2% this week.

 

This week, the price of European strategic small metal antimony was slightly lowered, reaching 12300 US dollars per ton on March 17. During the week, it was continuously lowered by 300 US dollars per ton, affecting market sentiment. Currently, the overall market atmosphere is on the sidelines.

 

Since the Spring Festival, the antimony ingot market has continued to rise. After reaching a high level, the antimony ingot price has stabilized for about half a month. The overall market atmosphere is also relatively wait-and-see, and the downstream continues to have insufficient capacity to receive goods. Therefore, this week’s price correction is also a relatively normal market reaction. “Since last week, the price of small metal antimony in Europe has weakened in a narrow range, and until this week, there has been a continuous correction. This has also had a significant impact on the overall market mentality, and the overall bearish sentiment in the future is relatively strong.”. However, the convenience of supply and demand has not changed much at present, and the supply is still slightly tight and the demand is weak. In the future, the price of antimony ingots has been affected by market sentiment recently, and the overall operation is mainly weak. Due to the lack of demand support, it is expected that there is still some room for correction in the future.

 

This week, the antimony oxide market continued to decline, with the overall smooth commencement of construction. The demand for antimony ingots remained just in demand, while the intention to receive goods from upstream was weak.

 

The nonferrous index stood at 1117 points on March 18, unchanged from yesterday, down 27.37% from its cycle high of 1538 points (2021-10-18), and up 84.02% from its lowest point of 607 on November 24, 2015. (Note: The cycle refers to 2011-12-01 to now).

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According to the bulk list data of the Business Agency, as of March 21, the average quoted price of acrylic acid in East China was 7725.00 yuan/ton, a decrease of 4.04% compared to last Friday (March 17).

 

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In the recent period (3.17-3.21), the acrylic acid market is weak. Recently, the market price of raw material propylene has fallen, and cost support has weakened. In addition, the enthusiasm of downstream market inquiries and procurement is low, and the focus of acrylic acid price negotiation is low. Market transactions are mainly on demand, with a strong cautious wait-and-see mentality and a weak market atmosphere.

 

According to the bulk list data of the business news agency, the recent price of propylene in Shandong is weak. On March 20, the reference price of propylene was 7176.60, a decrease of 4.6% compared to March 1 (7522.60).

 

Acrylic acid analysts from the Business Society believe that the current cost support is limited, and downstream procurement is just needed. The market atmosphere is general. It is expected that the acrylic acid market will stabilize in the short term, and more attention needs to be paid to market news guidance.

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