After the holiday, zinc prices fluctuated slightly and fell

According to the Commodity Market Analysis System of Shengyishe, as of January 8th, the zinc price was 21392 yuan/ton, a decrease of 0.91% from the zinc price of 21588 yuan/ton on January 1st. The processing cost of zinc concentrate has decreased, and the inventory of zinc ingots in ports has increased. After the New Year’s Day holiday, zinc prices have slightly fluctuated and fallen.

The processing cost of zinc concentrate has decreased

From the trend chart of zinc concentrate processing fees, it can be seen that after the New Year’s Day holiday, zinc concentrate processing fees continue to decline, with a decrease of 100-300 yuan/ton in zinc concentrate processing fees in different regions, a decrease in zinc concentrate processing fees, and a decrease in the enthusiasm of zinc smelting enterprises to start production.

Increase in zinc concentrate port inventory

From the trend chart of zinc concentrate port inventory, it can be seen that the post holiday zinc concentrate port inventory has increased. On January 5th, the total zinc concentrate port inventory was 394000 tons, an increase of 58000 tons from 336000 tons before the holiday. The inventory of zinc concentrate in ports has increased, and the supply of zinc in the market is sufficient.

Increase in zinc ingot inventory

From the domestic zinc ingot social inventory statistics table, it can be seen that after the holiday, domestic zinc ingot inventory first decreased and then increased, and overall zinc ingot inventory was relatively low. The zinc market supply was sufficient, and the support for the increase in zinc prices was insufficient.

Future Market Forecast

According to data analysts from Business Society, after the New Year’s Day holiday, zinc ingot inventory and an increase in zinc concentrate port inventory result in sufficient supply of zinc in the market; However, the recovery of demand in the zinc market is limited. The processing cost of zinc concentrate has decreased, and the enthusiasm of zinc smelting enterprises to start production has decreased. In addition, the turmoil around the Red Sea has affected the supply of zinc in the market; Expected strong fluctuations and consolidation in zinc prices in the future.

Price trend

According to the Commodity Market Analysis System of Business Society, most vitamin products have been on a downward trend in 2023. Taking vitamin A, vitamin C, and vitamin E as examples, the price trend in 2023 has been falling repeatedly. Large domestic and foreign factories have been forced to stop production and reduce production due to severe profit losses, and downstream industries have been sluggish for a long time. The pessimistic atmosphere on the market is shrouded, and the search for price support points has been fruitless, resulting in a decline throughout the year.

According to the price monitoring of Business Society, the price of vitamin C in 2023 decreased from 27.33 yuan/kg at the beginning of the year to 19.33 yuan/kg at the end of the year, with a year-on-year decline of 29.27%. The largest decline occurred on December 6th, with a decline of 32.93%. Subsequently, the market situation saw a turning point and a slight rebound.

According to the price monitoring of Business Society, the price of vitamin A in 2023 decreased from 104.5 yuan/kg at the beginning of the year to 75.5 yuan/kg at the end of the year, a decrease of 27.75% for the whole year, as of the end of 2023. The vitamin A market has yet to show a stop in decline signal.

According to the price monitoring of Business Society, the price of vitamin E in 2023 has dropped from 82.67 yuan/kg at the beginning of the year to 64 yuan/kg at the end of the year, a decrease of 22.58% for the whole year. As of the end of 2023, the price of vitamin E has fallen to a historical low point.

Tight supply side

From the perspective of maintenance and production stoppage, the overall vitamin market supply will tighten in 2023, especially during the peak summer maintenance season when large factories undergo centralized maintenance. However, this has not effectively boosted the vitamin market. Although there have been news of price increases on the news surface, the actual transaction focus still shows a downward trend.

The demand side continues to be weak

The main downstream industries of vitamins include feed, food and beverage, cosmetics, and medicine. Feed additives account for the largest proportion of the overall demand for vitamins, and the industry generally believes that over 70% of vitamin consumption is used in this field.

Taking live pigs as an example, since 2021, the pig cycle has entered a downward channel, and pig breeding enterprises are facing dual pressures of declining pig prices and rising feed costs, resulting in deteriorating profitability, cash flow situation, and increased debt burden. Since 2021, the output of live pigs has increased rapidly. Although the growth rate of pig output slowed down from the end of September 2022 to 2023, the situation of overcapacity continued, and pig prices fluctuated at low levels. Since 2021, the oversupply of pig production capacity has driven pig prices into a rapid downward trend.

The export market is relatively stable

According to customs data, the export volume of vitamin A in China was 466.8 tons in November 2023, a year-on-year increase of 14% and a month on month decrease of 11.4%. The total domestic VA exports from January to November 2023 were 4543.36 tons, a year-on-year increase of 28.5%.

According to customs data, the export volume of vitamin E in China was 7743.99 tons in November 2023, a year-on-year decrease of 1.41% and a month on month increase of 27.4%. From January to November 2023, China’s total export volume of vitamin E was 75900 tons, a year-on-year increase of 7%.

Future Market Forecast

In 2023, the vitamin market will continue to be affected by weak demand, with prices falling nearly 30%, exceeding expectations. Looking ahead to 2024, the downstream breeding industry will continue to operate with a focus on reducing production capacity. After pig prices fluctuate at a low level, there is a possibility of an upward trend in the pig cycle. The cost of breeding pigs and piglets has decreased, and the efficiency of breeding has improved. As a result, the extent of losses for pig breeding enterprises has narrowed or is expected to achieve profitability. At the same time, the market prices of vitamin A, vitamin C, and vitamin E have basically bottomed out, and manufacturers have a strong willingness to raise prices to reverse the poor performance situation. So after a period of consolidation and operation in 2024, the market for vitamins is expected to see a real rebound.

Price trend

In December, the domestic ABS market saw a negative decline, with many spot prices of various brands decreasing. According to the Commodity Market Analysis System of Business Society, as of December 31st, the average price of ABS sample products was 10662.5 yuan/ton, with a decrease of -4.26% from the average price level at the beginning of the month.

Cause analysis

In terms of supply: In the early stage, the domestic ABS industry had a high load, and due to supply pressure, some enterprises had a reduced load. At the beginning of the month, the operating rate of ABS aggregation enterprises was 75%, and the current industry load has decreased to around 71%. The production of the enterprise is relatively stable, but due to some new contract orders and some enterprises reducing their burden in the latter half of the year, the inventory situation has improved narrowly. However, the improvement of the company’s loss situation is limited, and the supply pressure is still high. The supply side’s drag on the spot market continues.

In terms of raw materials, the overall trend of ABS upstream three materials in December was poor, with a large fluctuation in the acrylonitrile market, and the overall price almost returned to the level at the beginning of the month. The price of raw material propylene has weakened, and the cost support for acrylonitrile has weakened; The demand for acrylonitrile support is gradually weakening; However, the production of acrylonitrile itself has increased, and in December, the fundamentals of acrylonitrile were dynamically balanced, with prices fluctuating and consolidating.

The domestic butadiene market saw a significant decline in December. In the first half of the year, there were sporadic returns of maintenance equipment, and there was an expected arrival of cargo at the port, leading to an increase in supply and creating a bearish drag on the market atmosphere. Major production enterprises significantly lowered their factory quotes. Downstream construction has not shown significant improvement, and there is a lack of positive news on the demand side. The domestic market price of butadiene has sharply declined. After the market bottoms out, it will begin to recover at the end of the month, but considering the demand side, there may be resistance to subsequent increases.

From the figure below, it can be seen that the market price of styrene in December first fell and then rose. The market fell for three weeks and rose for a week, with the decline exceeding the increase. The main reason for the decline is the decline in international oil prices, poor cost support, a stalemate between supply and demand of styrene, slow transactions, and a continuous decline in the market. After the market bottomed out, it rebounded, but the magnitude was small and the upward trend was weak.

In terms of demand: In December, the main ABS terminals, including downstream factories in the home appliance industry, continued to have poor stocking enthusiasm, mainly focusing on digesting existing inventory. Enterprises tend to maintain production in their procurement operations, making it difficult to increase demand. Mid stream traders tend to have a wait-and-see attitude and a low willingness to purchase goods. The slow circulation of spot goods creates a drag on the market.

Future Market Forecast

The overall performance of ABS upstream materials in December was poor, with weak support for the cost side of ABS. The petrochemical plant has seen a narrow decline in its high operating level, with limited improvement in supply pressure. The demand side consumption is poor, and merchants have weak confidence in the future market. The position of spot inventory may increase after the holiday, and the prospects for improving the supply-demand imbalance in the market are not good. The ABS market may still have downward momentum, and it is recommended to closely monitor the adjustment of supply side production capacity.

According to the Commodity Analysis System of Business Society, the domestic market for maleic anhydride continued to rise in late December. As of December 31, the average market price of n-butane oxidation maleic anhydride remained at 7860.00 yuan/ton, an increase of 5.08% from the price of 7480.00 yuan/ton on December 21.

In terms of supply: In late December, the factory mainly executed preliminary orders, and the stock was tight. However, at the end of the month, downstream wait-and-see sentiment was strong, and chasing higher prices was cautious. As of December 31st, the factory price of solid anhydride in Shandong region is around 7700-7800 yuan/ton, and the factory price of liquid anhydride is around 7600-7700 yuan/ton.

Upstream aspect: In late December, the market for hydrogenated benzene rose, while the overall styrene market rose. The pure benzene hydrogenated benzene market followed suit, with most crude benzene auction prices slightly rising, and the overall industry chain rising.

In late December, the international crude oil market fluctuated, the naphtha market fluctuated and declined, and the recent market for n-butane fluctuated and declined. As of December 31, the price in Shandong was around 5100-5200 yuan/ton.

Downstream: In late December, the unsaturated resin market continued to rise due to the continuous rise in raw materials. However, towards the end of the year, downstream demand for resin was weak, and overall market trading was average, with cautious operations.

Business Society’s maleic anhydride product analyst believes that currently, the upstream hydrogenation benzene market of maleic anhydride is rising, and the cost of maleic anhydride is supported; Downstream unsaturated resin transactions are limited, and the market often follows the trend of entering the market; At present, the prices of the main factories of maleic anhydride remain stable, with the execution of preliminary orders being the main focus. The price of maleic anhydride is high, and downstream purchasing sentiment is average. It is expected that the maleic anhydride market will mainly consolidate at high levels after the holiday.

According to the Commodity Analysis System of Business Society, the domestic hydrochloric acid market prices fluctuated and fell in December. The price of hydrochloric acid dropped from 125 yuan/ton at the beginning of the month to 112.50 yuan/ton at the end of the month, a decrease of 10%, and the price at the end of the month decreased by 35.34% year-on-year.

On December 27th, the hydrochloric acid commodity index was 29.61, unchanged from yesterday, a decrease of 78.53% from the highest point in the cycle of 137.89 points (2021-10-26), and an increase of 64.68% from the lowest point of 17.98 points on September 5th, 2012. (Note: The cycle refers to the period from September 1st, 2011 to present)

From the supply side perspective, the domestic hydrochloric acid market has experienced a significant decline this month, with low inventory from manufacturers.

Cost side: Liquid chlorine prices rise first and then fall

From a cost perspective, the upstream liquid chlorine market for hydrochloric acid experienced a significant decline in December, with an overall decrease of 250 yuan/ton. Insufficient cost support.

Demand side: Downstream demand weakens

In December, the market for polyaluminum chloride fluctuated and rose, with market prices rising from 1760 yuan/ton at the beginning of the month to 1777.50 yuan/ton at the end of the month, an increase of 0.99%, and a year-on-year decrease of 12.33% at the end of the month. In December, the market situation of ammonium chloride significantly declined, with market prices dropping from 727.50 yuan/ton at the beginning of the month to 662.50 yuan/ton at the end of the month, a decrease of 8.93%, and a year-on-year decrease of 42.14% at the end of the month. The downstream market situation has significantly declined, and downstream manufacturers have weakened their enthusiasm for purchasing hydrochloric acid.

Looking at the future: In mid to early January, the hydrochloric acid market may experience slight fluctuations and declines. The upstream liquid chlorine price has dropped significantly, with insufficient cost support. The downstream ammonium chloride market has experienced a significant decline, and downstream purchasing enthusiasm has weakened. Analysts from Business Society believ

e that the recent market for hydrochloric acid may experience a slight fluctuation and decline.

Recently (12.18-12.27), the market for trichloromethane has slightly increased. According to data from Business Society, as of December 27th, the price of trichloromethane bulk water in Shandong Province was 2070 yuan/ton, an increase of 3.50% from 2000 yuan/ton on December 18th. The price of raw material methanol fluctuates narrowly, the price of liquid chlorine continues to decline, and the cost center of trichloromethane shifts downwards; Downstream enterprises with a small amount of stock and low inventory of trichloromethane enterprises have led to a slight increase in the trichloromethane market.

Recently (12.18-12.27), domestic methane chloride production fluctuated narrowly.

Recently (12.18-12.27), the price of raw material methanol fluctuated narrowly, and the price of liquid chlorine continued to decline, resulting in weak cost support for trichloromethane. According to the commodity market analysis system of Shengyishe, as of December 27th, the spot price of methanol was 2447 yuan/ton, a decrease of 0.14% from 2450 yuan/ton on December 18th, and the highest point in the cycle was 2505 yuan/ton. As of December 27th, the acceptance price of liquid chlorine tank trucks in Shandong region is around -100 yuan/ton, continuing to decline.

In the off-season, there is only a small amount of demand for refrigerants at the terminal. Currently, some refrigerant companies have stocked up in small quantities, supporting a slight recovery in demand for trichloromethane. However, in the medium to long term, the overall support for the demand for trichloromethane will weaken.

The methane chloride data analyst from Business Society believes that a small amount of stocking provides some support for trichloromethane, but cost support weakens, and it is expected that the trichloromethane market will narrow and consolidate in the later stage.

Overview of ethylene oxide prices in December

In December, the price of ethylene oxide remained stable. According to data from Business Society, as of December 26th, the average price of ethylene oxide in the domestic market was 6400 yuan/ton; From a regional perspective, the epoxy ethane market in East China is priced at 6400 yuan/ton externally; The listed price of ethylene oxide in the South China market is 6500 yuan/ton; The listed price of epoxy ethane in North China is 6400 yuan/ton; The listed price of epoxy ethane in the central China market is 6400 yuan/ton; The listed price of ethylene oxide in Northeast China is 6300-6350 yuan/ton.

Overview of the ethylene oxide industry chain

The utilization rate of the main downstream polycarboxylate water reducing agent monomer production capacity has not changed much, and the demand for ethylene oxide is relatively stable. The rest of the downstream production is mainly stable, with general short-term price support.

Raw material end

The price of raw material ethylene has begun to show a weak market consolidation, and the cost of ethylene oxide is generally supported. As of December 22nd, the estimated CFR China price for ethylene in the port is around 850-860 US dollars per ton. The price of ethylene in Northeast Asia has stabilized at $850/ton, while CFR China’s price has dropped by $10/ton to $860/ton. Domestic ethylene transaction prices have fallen by 450 yuan/ton to 6800 yuan/ton. The cost pressure on ethylene oxide enterprises has slightly decreased.

Supply side

The shutdown of the Lianyungang plant has led to a tightening of supply in some areas, which has not yet affected prices.

The price of ethylene oxide may remain weakly stable in December

The demand for downstream products of ethylene oxide remains stable, and recently, ethylene oxide has been operating steadily. Next week, the Jiangsu Sirbang plant may restart, and the increment is limited nationwide. The main downstream industries have not undergone significant changes in production, with stable orders being the main focus. It is expected that the price of ethylene oxide will remain weak and stable in the short term.

Aluminum prices slightly rebounded in December

According to the Commodity Market Analysis System of Business Society, the average price of domestic aluminum ingots in the East China market on December 25, 2023 was 19083.33 yuan/ton, an increase of 2.20% compared to the aluminum price of 18673.33 yuan/ton at the beginning of the month (December 1).

In the long term, the current price is in a sideways range after a high level decline. Since May, it has been fluctuating below 19000 yuan/ton, and by the end of August, it has exceeded 19000 yuan/ton. In September, aluminum prices first fell and then rose. In October, the center of gravity of aluminum prices fell back to around 19000 yuan/ton and fluctuated. In November, aluminum prices were weak and began to recover after mid December, returning to the front line of 19000 yuan/ton.

Overview of Fundamentals

Supply side

In the early stage, Yunnan’s electrolytic aluminum production was reduced, with an expected scale of 1.17 million tons. Recently, heavy snowfall in the northwest region has affected transportation, and at the same time, the blizzard has affected the power supply of aluminum plants, resulting in a continuous significant decline in social inventory.

In terms of new production capacity, the remaining new production capacity of Baiyinhua in Inner Mongolia has been fully electrified, but some electrolytic cell production has not yet reached capacity;

The stable operation of domestic aluminum electrolysis plants is mainly affected by blizzard and cold wave weather. The Xinjiang region strictly implements the “2023 Implementation Plan for Emergency Peak shaving and Flexible Load Adjustment of Self owned Power Plants”. Some aluminum plants in the province have experienced peak shaving and load reduction production, but the impact on production is currently relatively small.

There is a replenishment operation on the demand side

In terms of demand: Downstream demand requires replenishment operations.

Aluminum profiles: The operating rate of leading aluminum profile enterprises is around 56%, mainly due to factors such as the off-season of industry consumption, resulting in fewer subsequent orders.

Aluminum plate with foil: The average operating rate of aluminum plate and aluminum foil is above 75%,

Aluminum cables: maintain a high operating rate of around 67%.

Explicit low inventory levels

In terms of social inventory, following the start of destocking in the second half of July, inventory is relatively low. As of December 25th, the mainstream social inventory of electrolytic aluminum ingots in China was 414000 tons, with 149000 tons of inventory removed compared to November 30th. Based on year-on-year data, it is at a low level in the same period of nearly five years.

Cost driven by alumina

The explosion at the fuel depot in the capital of Guinea has raised concerns in the market about the supply of bauxite. It is reported that Chinese alumina companies are highly dependent on Guinea’s ore, with a total of 91.104 million tons of bauxite imported from Guinea from January to November, accounting for 70.2% of the total import volume. In addition, domestically, due to the heavy pollution weather in the north, the Shandong alumina plant has been shut down for ten days. The supervision and management of mining in Shanxi region is relatively strict, and the mines in Sanmenxia area of Henan province have not yet resumed production, resulting in a shortage of ore supply in Shanxi and Henan provinces. The price of alumina is firm.

Future market forecast

The positive cost side combined with the elimination of explicit inventory is expected to have a high probability of strong aluminum price fluctuations in the short term.

1、 Price trend

According to the Commodity Market Analysis System of Business Society, as of December 22, the reference average price of 85% thermal phosphoric acid in China was 6640 yuan/ton, which is a decrease of 2.35% compared to the reference average price of 6800 yuan/ton on December 18.

According to the Commodity Market Analysis System of Shengyishe, as of December 22, the reference average price of 85% wet process phosphoric acid in China was 6516 yuan/ton, which is 6783 yuan/ton compared to the reference average price on December 18. This week, the domestic wet process phosphoric acid price decreased by 3.93%.

2、 Market analysis

The market price of phosphoric acid has fallen this week. The price of raw material yellow phosphorus has been lowered, resulting in insufficient cost support. The operating rate of phosphoric acid enterprises is stable, market demand is sluggish, and trading is weak. The company’s quotation has been lowered, and the main focus is on single negotiation, with bearish sentiment in the market. As of December 22, the factory price of 85% thermal phosphoric acid in Yunnan region is around 6800 yuan/ton, and the factory price of 85% thermal phosphoric acid in Hubei region is around 6100-6900 yuan/ton. The domestic market quotation for 85% wet process phosphoric acid is around 5500-7250 yuan/ton.

This week, the market price of yellow phosphorus continued to decline, and the overall market trading situation was relatively light. The market operating rate has decreased this week, and some yellow phosphorus enterprises have suspended external quotations. However, downstream demand is poor, with low prices for procurement. Traders and downstream buyers are less proactive, and the focus of the on-site market continues to decline. Downstream procurement is more cautious, with limited new orders and a focus on rigid demand. As of now, the market price for yellow phosphorus is around 23500 yuan/ton, and the actual transaction is negotiable.

In terms of raw material phosphate ore, the overall domestic phosphate ore market has remained stable and operational this week. The overall supply side of phosphate ore is still slightly tight, and the supply side still provides some support to the market. The overall performance of downstream demand is average, with most downstream orders being for rigid needs. As of December 22nd, the domestic price of 30 grade phosphate ore is around 1020-1080 yuan/ton.

3、 Future Market Forecast

Business Society’s phosphoric acid analyst believes that the phosphoric acid market has been continuously weakening in recent days. The market trend of raw material yellow phosphorus is declining, and the cost support for phosphoric acid is insufficient. The terminal demand is limited, the market transactions are relatively low, and the mentality of downstream and distributors is unstable. It is expected that the short-term market price of phosphoric acid will continue to decline weakly.

According to the Commodity Market Analysis System of Business Society, the price of acetic acid dropped significantly in mid December. On December 20th, the average market price of acetic acid was 3150 yuan/ton, a decrease of 300 yuan/ton compared to the price of 3450 yuan/ton on December 11th, a decrease of 8.70%, and a decrease of 5.26% compared to the beginning of the month.

In mid December, the acetic acid market saw a broad decline, and the main factories in East China gradually recovered after an unexpected malfunction, leading to an increase in market supply. At the same time, the northern region was affected by rainy and snowy weather, transportation was restricted, and manufacturers accumulated inventory, resulting in a strong intention to clear inventory. However, downstream markets were affected by buying up and not buying down sentiment, resulting in weak purchasing sentiment, sluggish market trading, poor factory shipments, bearish sentiment among manufacturers, and a significant decrease in acetic acid prices. As of December 20th, the market prices of acetic acid in various regions during the month are as follows:

In mid December, the upstream raw material methanol market fluctuated and rose. As of December 20th, the average price in the domestic market was 2488.33 yuan/ton, an overall increase of 1.91% compared to the price of 2441.67 yuan/ton on December 11th. In the early stage, the expectation of methanol imports was at a high level, which suppressed market prices to some extent. Downstream purchases were made on demand, resulting in a slight decline in overall market prices; Starting from the 13th, some areas have been affected by heavy snow weather, resulting in limited transportation, increased freight costs, slowed delivery speed, and affected social inventory in consumer areas. The circulation of methanol in the region has decreased, and downstream delivery prices have continued to rise.

The downstream acetic anhydride market has experienced a significant decline. As of December 20th, the ex factory price of acetic anhydride was 5850.00 yuan/ton, a decrease of 8.41% compared to the price of 6387.50 yuan/ton on December 11th. Acetic anhydride manufacturers have resumed production, increased load, and sufficient supply in the acetic anhydride spot market. In addition, transportation is limited due to weather conditions, resulting in poor shipment of acetic anhydride and accumulation of inventory in enterprises. There is significant downward pressure. At the same time, upstream acetic acid prices have fallen, and the cost support for acetic anhydride is insufficient, leading to a continuous decline in acetic anhydride prices.

In the future market forecast, the acetic acid analyst from Shengyishe believes that the on-site maintenance of the acetic acid plant has resumed, the market supply has increased, and the negative impact on the supply side has affected downstream demand follow-up. Market transactions are limited, and the overall decline in the short term may weaken. However, considering that the current acetic acid price has fallen to a relatively low level, there is still a mentality of buying at a low price in the downstream. It is expected that the acetic acid market will consolidate and operate in the future, and specific attention will be paid to downstream procurement in the future.