On July 5th, the domestic liquid ammonia market rose, with a daily increase of 2.45% in the main production area of Shandong, according to the Commodity Market Analysis System of Business Society. The main reason is the tight supply, which has a positive impact.

Some devices in the northern region have entered the maintenance period, and the operating rate of enterprises has decreased. The superimposed import sources have significantly decreased compared to the previous month. The market atmosphere has significantly improved compared to the previous week, and the exploratory nature of dealer offers has increased. However, due to the small changes in the downstream urea market, downstream agricultural demand for fertilizer preparation is coming to an end, indicating that this increase is mostly driven by suppliers. At present, the mainstream quotation in Shandong region is between 2700-2900 yuan/ton.

Prediction: It is expected that the tight supply trend of liquid ammonia in the near future will not be maintained for too long, as demand has not improved, and the retreat of agricultural demand will quell the contradiction of supply shortage. It is expected that there is not much upward space for liquid ammonia in the future.

1、 Price trend

According to the Commodity Market Analysis System of Business Society, the reference average price of 85% hot process phosphoric acid in China on June 1st was 6220 yuan/ton. On June 30th, the reference average price of 85% hot process phosphoric acid in China was 6300 yuan/ton. This month, the domestic hot process phosphoric acid price increased by 1.29%.

According to the Commodity Market Analysis System of Business Society, the reference average price of 85% wet process phosphoric acid in China was 5983 yuan/ton on June 1st, and 6200 yuan/ton on June 30th. This month, the domestic wet process phosphoric acid price increased by 3.62%.

2、 Market analysis

This month, the price of phosphoric acid in the market fluctuated and fluctuated. In early June, the price of raw material yellow phosphorus increased, cost support strengthened, and the increase in raw material prices boosted the upward trend of the phosphoric acid market. In mid June, the price of raw material yellow phosphorus decreased, and cost support weakened. Downstream stocking willingness is not strong, market trading is poor, and transactions are relatively low. The market price of phosphoric acid has been lowered. In late June, the raw material yellow phosphorus was operating steadily and steadily, with acceptable cost support. Phosphoric acid companies mainly raised prices, and prices fluctuated and increased. As of June 30, the ex factory quotation of 85% thermal phosphoric acid in Sichuan was about 6200 yuan/ton, that of 85% thermal phosphoric acid in Yunnan was about 6300 yuan/ton, and that of 85% thermal phosphoric acid in Hubei was about 6200 yuan/ton. The domestic market quotation for 85% wet process phosphoric acid is around 6000-6700 yuan/ton.

The raw material phosphate rock market has shown a weak decline overall in the domestic phosphate rock market this month. Starting from the beginning of the month, due to the weak downstream demand for phosphate ore, the overall shipment of phosphate ore has slowed down, and the mentality of the industry is average. Some mining companies have started to lower the price of phosphate ore shipments, with a decrease of around 20-30 yuan/ton. Due to the impact of shipments, some mining enterprises have added average new orders, so there is some pressure on the supply side, and the support provided by the supply side to the market is gradually loosening. In the later stages, the phosphorus ore market continues to move downward in the supply-demand game, with a 30% grade phosphate ore price reduction of around 40-60/ton.

Market situation of raw material yellow phosphorus. In June, the market price of yellow phosphorus first rose and then fell, with the overall increase being the main trend. In the early part of this month, manufacturers mainly placed preliminary orders, but there was not much inventory on the market and they were reluctant to sell at low prices, resulting in an overall increase in the market situation. In the middle of the month, the overall market trading situation of yellow phosphorus was light, and the start of construction in the yellow phosphorus market was still at a low level. Some enterprises postponed driving, and market transactions were limited, with prices slightly falling. At present, most of the yellow phosphorus production enterprises are reducing their production load in the latter half of the year, with stable prices as the main focus. Downstream procurement is based on demand and can be taken as needed. As of now, the quotation in Sichuan region is around 22800-23000 yuan/ton, and the actual transaction is subject to negotiation.

3、 Future Market Forecast

Phosphoric acid analysts from Business Society believe that the market for raw material yellow phosphorus has been stable recently, and the supply of goods is currently tight, leading to an increase in market inquiries. The phosphoric acid market is watching the trend of raw materials, and the market is operating at a high price. Downstream demand is weak, and market transactions are relatively low. It is expected that the short-term price of phosphoric acid will stabilize and operate mainly.

The antimony ingot market in East China will decline slightly from June 26 to July 3, 2023. The price at the beginning of last week was 81625 yuan/ton, and the price at the beginning of this week was 81250 yuan/ton, down 0.46%.

The K-bar chart of commodity prices uses the concept of a price trend K-line to reflect weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell investments based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations. From the above figure, it can be seen that the trend of the antimony ingot market was relatively stable in April, and the market has been slightly declining for four consecutive weeks since June.

This week, the price of European strategic small metal antimony has temporarily stabilized, and as of July 3rd, it was at $11850/ton, with a decrease of $100/ton. Currently, the overall market atmosphere is on the wait-and-see side.

This week, the antimony ingot market continued its previous weak trend, and prices continued to decline slightly this week, with a decrease of about 500 yuan/ton within the week. The changes in supply and demand are still limited, and the overall performance is weak in both supply and demand. The operation of the refinery has remained basically unchanged compared to last week. Although manufacturers have a certain mentality of price support, they have also relaxed their mentality in the face of long-term weak market operation. In terms of demand, sales of antimony oxide are weak, and downstream demand is generally weak, resulting in cold market trading. The overseas situation is also not optimistic. The European region is about to enter a summer break, and the price of antimony ingots in Europe continues to decline. Overseas demand is expected to decline. According to the latest export data, the export volume of antimony oxide and antimony ingots has declined, and the weakness of the overseas market has also affected the mentality of the domestic market. The market outlook for the future is not good. Overall, the current market supply and demand are weak. With the continuous decline of prices, the market’s wait-and-see mentality has become increasingly strong, and the mentality of refineries to support prices has become loose. It is expected that the market will continue to operate weakly in the future.

This week, the antimony oxide market is operating weakly, with weak downstream demand and overall soft market transactions. The demand for antimony ingots remains strong, while the intention to receive goods from upstream is weak, and on-demand procurement is maintained.

The high price of precious metals in June was sideways, rising first and then falling later within the month

In June, the price of precious metals was at a high level, with a trend of first rising and then falling during the month. According to the commodity market analysis system of the business community, the price of gold in the Spot market will be 448.60 yuan/g on June 30, 2023, down 0.24% from 449.70 yuan/g in the Spot market at the beginning of the month (June 1); Compared to the high of 452.34 yuan/g on June 13th, it decreased by 0.83%.

Silver fell back to the beginning of the month

According to the commodity market analysis system of the business community, the average silver market price will be 5432.33 yuan/kg on June 30, 2023, down 0.25% from 5446 yuan/kg at the beginning of the month (June 1); Compared to the high point of the month (June 13th) of 5647 yuan/kg, it decreased by 3.80%.

Summary of Price Trends of Precious Metals and Crude Oil

In the early stage, the correlation between precious metals and crude oil trends is strong. After the second half of 2022, precious metal prices have bottomed out and stabilized, and the magnitude of macro factors affecting them has begun to show differentiation. The trend of precious metals and crude oil began to converge in late March, but after mid April, the trend began to diverge again. Mainly due to the increased impact of risk aversion on the rise of precious metal prices.

Comparison of precious metal gold and silver price trends in the past year

In 2022, the rise and fall trends of precious metal gold and silver have converged, but the decline in silver was deeper from April to August, and the recent recovery has been more significant. In December, silver continued its strong trend last month, and gold began to consolidate at high levels. In 2023, precious metal gold and silver have consolidated at high levels, with a slight decline in February. Since March, precious metal prices have started to rise. Silver prices began to decline in May, while gold remained relatively strong. In June, gold prices reached a high level and silver prices began to rise.

Policy Fundamentals Data

The US GDP growth rate in the first quarter has significantly increased to 2%, forcing the market to suggest to the Federal Reserve a target pricing of raising interest rates twice this year. As of this morning, the market has priced the Federal Reserve to raise interest rates by at most about 35 basis points this year, compared to around 30 basis points yesterday. In addition, the core PCE price index in the United States recorded an annualized quarterly rate of 4.9% in the first quarter, better than the expected 5.00%. Last week, the number of initial claims for unemployment benefits in the United States hit its largest decline since October 2021. The monthly rate of the US completed home contract sales index for May was -2.7%, lower than the expected -0.50%. The economic data improved again, boosting the U.S. Dollar Index, making the market believe that the probability of the Federal Reserve raising interest rates is further enhanced, to a certain extent, precious metals. However, based on recent statements from Federal Reserve officials, Federal Reserve Chairman Powell stated that continuing to slow down is meaningful and does not rule out the possibility of continuous interest rate hikes. The risk of doing too much is smaller than doing too little. Next year’s FOMC voting committee and Atlanta Federal Reserve Chairman Bostek stated on Thursday that the need for further interest rate hikes in the coming months is not absolutely ruled out, and there is a possibility of two consecutive interest rate hikes, without seeing the urgency of interest rate hikes as seen by Powell. The baseline is that there will be no further interest rate hikes, but there will be no interest rate cuts in 2024.

The high price of precious metals has fallen, and the probability of sideways fluctuations in precious metal prices in July is high

At present, the price of precious metals has been fluctuating in the high range after hitting a 10-year high in the early stage. In the early stage, we expected that under the high inflation and high interest rate hikes, 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 increased their holdings of Gold reserve, which also formed some support for gold prices.

However, Federal Reserve officials downplayed the possibility of interest rate cuts within the year, suggesting that there are still two expected rate hikes within the year, which will suppress precious metal prices for a certain period of time. At present, the price of precious metals is at a high level, and the probability of entering a sideways market fluctuation is increasing. It is expected that the price fluctuation of precious metals in July will be mainly weak and consolidation will continue to be bullish in the medium to long term.

According to the monitoring of the Commodity Market Analysis System of the Business Society, the domestic price of LLDPE (7042) was 8014 yuan/ton on June 1, and the average price on June 29 was 8035 yuan/ton. During this period, the quotation increased by 0.27%.

According to the monitoring of the Commodity Market Analysis System of the Business Society, the average ex factory price of LDPE (2426H) was 8120 yuan/ton on June 1, and 8600 yuan/ton on June 29, with a rise of 5.91% during the period.

According to the monitoring of the Commodity Market Analysis System of the Business Society, the average ex factory price of HDPE (5000S) was 8937 yuan/ton on June 1st, and the average price on June 29th was 9087 yuan/ton, with a 1.68% increase in quotation during this period.

In June, polyethylene prices experienced varying degrees of increase, with a significant increase in LDPE prices, a slight increase in LLDPE fluctuations, and a slight increase in HDPE prices. The suspension of interest rate hikes by the Federal Reserve in June and the news of domestic interest rate cuts have boosted macroeconomic sentiment, providing some support for polyethylene prices. The rise in crude oil prices at the beginning of the month is positive for the polyethylene market. In June, equipment maintenance was concentrated, resulting in an increase in maintenance losses. Market supply pressure was not significant, and production enterprises and traders continued to increase their prices, with LDPE prices rising significantly. Agricultural film is in the off-season of demand, and order follow-up is limited. In terms of pipes, factory orders are gradually decreasing, and the factory’s enthusiasm for receiving goods is not high. The market is mainly focused on procurement on demand.

At present, polyethylene demand is in the off-season, and enterprise parking and maintenance plans are relatively concentrated. July is still the off-season for polyethylene demand, and it is expected that polyethylene may fluctuate weakly.