Price trends:

According to the data of the business associations’list, the domestic ABS market was in a narrow fluctuation in August, and the price was stable temporarily. As of August 29, the mainstream offer price of general-purpose ABS was about 1290.00 yuan/ton, up 0.78% from the beginning of the month.

2. Analysis of influencing factors:

Industry chain: ABS upstream, in early August by international oil prices, pure benzene continued to fall, styrene market prices continued to fall, a larger decline. In addition, the external news continued to be negative, domestic enterprises stepped up inventory, most enterprises reduced prices and promotions, merchants have a higher intention to deliver goods, let profits go single. In the middle of the year, the news of the easing of Sino-US trade affected the on-site environment temporarily. The price of most domestic enterprises has been revised back, and the demand of the downstream main body remains at a low level, so the purchasing strategy of just-in-demand has been adopted. At the end of the month, the international crude oil market continued to improve, the overall oil price shocks up, the US dollar rose, giving styrene cost support. After the whole Styrene Market rebounded, it maintained a high level, while the profit margin of the production enterprises decreased slightly, because the prices of pure styrene and ethylene began to rise. At present, the domestic production plant is relatively stable, the production and marketing of enterprises are stable, and the spot supply is still tight. It is expected that the price of styrene will rise slightly with the cost rising in the near future.

This month, the domestic butadiene market rose, the external market was high, the domestic manufacturers had no obvious inventory pressure, and the state-owned synthetic rubber plant operated steadily. In the downstream of East China’s new output supply contract, there is no spot inflow into the trade link for the time being, and Sinopec’s internal supply is relatively tight, butadiene market performance is relatively strong.

In August, the spot supply of acrylonitrile-related products was slightly tighter, downstream demand maintained just demand, and supply and demand in the field basically balanced. Downstream rubber market is weak, some private enterprises parking. However, the acrylonitrile inventory has been reduced to a low level, and the mindset of the operators is stable. In recent years, domestic acrylonitrile quotation is relatively stable, the market is flat and tidy; ABS upstream support is still acceptable, downstream household appliances industry demand is weak, the market as a whole is short of gas. Domestic ABS shock adjustment in August.

3. Future market forecast:

Business analysts believe that: August domestic ABS offer narrow shock adjustment. Upstream three materials on the cost side support the cost side is still acceptable, and the mid-term Sino-US talks to ease the release of news are positive. However, in the context of imbalance between supply and demand, downstream purchasing is negative, and the mindset of the traders is more wait-and-see. Bad market trading drags down ABS market, and bearish bulls pull each other. It is expected that the recent ABS offer trend will continue to shake the whole market.

Since this year, the shadow of economic and trade frictions and the slowdown of global economic growth have always dominated the sentiment of the crude oil market. The fluctuation of international oil prices makes it difficult to make a major breakthrough. Institutions predict that U.S. crude oil exports are expected to grow further, and the global crude oil market may continue to oversupply.

Increased U.S. oil export capacity

CNBC reports that Citigroup’s commodities research team predicts that the new pipeline will help break through the bottleneck of shale oil transportation in the United States, further increase U.S. crude oil exports and further highlight the contradiction of oversupply in the global crude oil market. With the help of the new pipeline, by the end of this year, U.S. oil exports will increase from the current 3 million barrels per day to 4 million barrels per day, and another 1 million barrels per day next year. Last year, U.S. exports grew by 970,000 barrels per day over the previous year.

According to reports, starting this month, Plains All American Pipeline LP, a U.S. oil and gas pipeline transportation, marketing and storage company, launched a new pipeline, Cactus II, to deliver 670,000 barrels of crude oil produced in the Permian basin, the core area of U.S. shale oil, to the Gulf of Mexico. This means that the Permian basin pipeline transportation problem, which has long plagued American shale oil producers, has begun to be solved.

Citigroup believes that commercial use of the new pipeline will help break through the bottleneck of oil transportation in the Permian basin. “Within six to eight months, the United States will produce 4 million barrels a day, much more than the entire North Sea,” said Morse, head of global commodity research at Citigroup. Crude oil will be shipped everywhere, and if U.S. production reaches 6 million barrels a day in three years, it will become a global benchmark. Local production is expected to double to about 8 million barrels per day by 2023.

Over the past decade, U.S. oil production has more than doubled. The United States has become the largest oil producer, and its oil production has now approached a historic high. According to the U.S. Energy Intelligence Agency (EIA), U.S. crude oil production remained at 12.3 million barrels per day as of the week of 15 this month, only 100,000 barrels per day less than the highest level in history.

Prior to this, the lack of infrastructure needed to transport crude oil from Dezhou Oilfield to export ports and enter the world market has restricted U.S. crude oil exports and global crude oil supply. Now the problem has been solved. With the construction of crude oil pipelines, the U.S. crude oil export capacity will also be enhanced. The entire Gulf Coast, Texas and Louisiana are expanding their unloading facilities, and shipping facilities are expanding along the Gulf Coast. Citigroup expects the U.S. export capacity to expand to 6 million barrels a day, or even higher.

OPEC’s output cuts were offset

In the international crude oil market, on the one hand, the Organization of Petroleum Exporting Countries (OPEC) continued to reduce production, which promoted oil prices to strengthen. On the other hand, the rising production of shale oil in the United States, the anticipated decline in global demand and the strong US dollar hindered oil prices to rise. The two forces have gone from strength to strength, which has become the main force behind the large fluctuations in international oil prices since this year.

Owing to trade frictions, increasing downside risks in the global economy and difficulties in boosting crude oil demand, OPEC still insists on production reduction measures, and the output and output reduction of oil producing countries in July exceed the expectations of the reduction agreement. According to the OPEC Technical Committee, the reduction rate in July was 159%, OPEC’s compliance rate in July was 156%, and non-OPEC members’reduction rate was 166%.

Once the supply of U.S. crude oil to the international crude oil market increases, it will greatly offset OPEC’s output cuts. At the same time, the new oil supply from the United States has also put OPEC in a dilemma. Francisco Blanch, head of commodities and derivatives research at Bank of America, said OPEC’s market share had fallen by 1% annually over the past seven years.

For Saudi Arabia eager to achieve budget balance, the process of achieving global oil market balance is too slow. Analysts believe that Saudi Arabia will increase output cuts and reduce exports in the future, while the continued decline in production in Iran and Venezuela will accelerate the process. As for non-OPEC countries such as Russia, the possibility of continuing to cooperate with OPEC is due to the anticipated economic slowdown, resulting in pressure to reduce production. But with Russia’s recently announced break-even oil price target of less than $50, and the recent slight rebound in Russian exports, the market speculates that Russia may be divided on the way to cooperate with Saudi Arabia to reduce production.

Market Equilibrium is Temporarily Difficult to Realize

U.S. light crude oil futures prices have fallen back from a one-year high of $75 a barrel in October 2018. Oil prices have been volatile, falling to a low of $42 on Christmas Eve last year, and have since recovered, now in the middle of $50. Brent crude oil futures hovered around $60 a barrel this month.

Some analysts pointed out that the crude oil price trend still needs to pay attention to the implementation of OPEC’s production reduction plan, changes in supply and demand in the crude oil market and the trend of the US dollar.

Joint Organisation Data Initiative (JODI) data show that since the third quarter of 2014, the decline in oil consumption has reached the highest level. The last time demand fell at this level was between 2014 and 2015, when oil prices plunged because of falling consumption, increased production of shale oil in the United States and Saudi Arabia’s refusal to cut production.

When the international crude oil market balances has always been a problem that puzzles the market. At present, it seems that this goal has not been achieved. Once oversupply reappears, the balance of the crude oil market will be delayed and oil prices will be difficult to boost.

Energy analyst John Kemp predicts that if U.S. crude oil production slows down and OPEC continues to cut production, the balance will not be achieved until mid-2020. He believes that only by suppressing shale oil production growth through sustained low oil prices can consumption be effectively promoted in order to achieve market balance.

Citigroup is also not optimistic about the future of crude oil. Citigroup believes that demand will fall even without a recession, given the increased likelihood of global GDP falling. There will be too many problems in the next two to three years, and oil prices will be challenged in the next two to three years.

According to Prussian Energy Information Report, the latest data released by the General Administration of Customs on Monday showed that China’s gasoline exports rebounded 56.1% in July from a year earlier to about 1.56 million metric tons, better than the 18% increase in June.

Some analysts believe that after the full commissioning of Hengli Petrochemical (Dalian) Refinery with an annual output of 20 million metric tons, China’s domestic market demand is weak, prompting state-owned refineries to export more gasoline.

Customs data show that China exported 998,000 metric tons of gasoline in June, which was lower than expected. It is also believed to have led to a sharp increase in exports in July.

However, Klper, a data intelligence provider, said China shipped and exported 1425,000 tons of gasoline in June, based on vessel tracking information.

Compared with the same period last year, exports increased by 74.5% year-on-year.

In July, China’s exports to Africa, Nigeria, Mexico and Ecuador, the Middle East, the United Arab Emirates and Oman totaled 504,000 metric tons, accounting for 32.3% of the total exports in that month.

By contrast, exports to these countries totaled 198,000 metric tons in June, accounting for 22.2% of total exports.

Among these countries, exports to Nigeria were 167,000 metric tons, an increase of 177.8% over the previous month, while exports to Mexico increased 315.8% to 138,000 metric tons in July.

Apart from these five destinations, the rest are traditional Asian receivers.

The first 200,000 barrels of crude oil exported from Kenya were shipped from Mombasa on the same day, marking Kenya becoming the first oil exporter in East Africa, according to President Uhuru Kenyatta of Kenya in the port city of Mombasa, Xinhua News Agency reported.

Kenyatta said the first 200,000 barrels of low-sulfur crude oil exported were worth 1.2 billion shillings ($12 million) and were priced higher than market expectations.

Kenya’s Deputy Minister of oil and minerals, Andrew Kamau, had previously said that Kenya planned to export 400,000 barrels of crude oil this year. The first batch of 200,000 barrels of crude oil was exported in the third quarter of this year, and the second batch was carried out at the end of the year.

Kenya is currently implementing an Early Oil Exploitation Plan. Kamau said Kenya is scheduled to produce 2,000 barrels of crude oil a day. Kenya will transport crude oil through other transportation facilities before the completion of the oil pipeline from Rockichar to Lamu Harbour in Kenya.

Kenya’s oil exploration began in 2012. According to data disclosed by exploration companies, Kenya’s proven oil reserves are currently estimated at about 750 million barrels.

Price Trend

The average price of phosphoric acid was 5833.33 yuan/ton on August 13, 5066.67 yuan/ton on August 27 and 13.14% in 15 days, up 14.22% compared with the same period last year.

II. Market Analysis

Products: In the first half of August, the price of phosphoric acid market was high and stable. In the second half of the month, major enterprises began to reduce their quotations. As of August 27, the average price of 85% industrial purified water phosphoric acid market was about 5066.67 yuan/ton. Hubei Xingfa Group quoted 6000 yuan/ton. Sichuan Shifang Kanglong quoted 4600 yuan/ton. Oufuda Prefecture quoted 4800 yuan/ton and North China quoted 4600 yuan/ton. Beijing Airlines Xinghongda quoted 5400 yuan/ton, Guangxi Mingli Group quoted 5200 yuan/ton, Qianrui Chemical Industry quoted 4500 yuan/ton, prices fell sharply everywhere, and the market returned to rationality.

This year’s market is different from previous years. In general, during the flood season, yellow phosphorus enterprises start construction at a high level, supply is sufficient and prices are at a low level. This year, due to environmental protection and other factors, some enterprises stop production and the market of conductive phosphoric acid is rising. With the upstream Yellow Phosphorus market price pressure drops, the market center of gravity moves downward. In addition, Yunnan yellow phosphorus plant starts construction one after another, the market supply increases, and the price of yellow phosphorus keeps falling, thus driving the hot process phosphoric acid market. The terminal is mainly just needed, because the high-end price of thermal phosphoric acid can not be recognized downstream, the market is flat, phosphoric acid prices continue to decline. At present, the industry is off-season, phosphoric acid in the case of weak supply and demand, pressure to reduce prices, downstream users actively replenish, open pre-holiday stock mode. Recently, some yellow phosphorus enterprises will stop production and rectify, the market supply is tight, the price rises slightly, but phosphoric acid enterprises are still waiting and watching, rational price control, although there is a small increase, but the overall market consolidation is in the majority.

Graph.100ppi.com

Industry chain: The market continues to operate steadily, and intra-venue trading is still relatively light. The overall focus of the yellow phosphorus market is upward, and the current market trading atmosphere is good. Due to environmental factors, the starting rate of yellow phosphorus is not high, and the price upward trend is strong. Up to the 22nd, Yunnan yellow phosphorus mainstream quotation is 15 500-16 000 yuan/ton. The mainstream quotation in Sichuan is about 15 500 yuan per ton. The main transaction price of yellow phosphorus in Guizhou is about 15 300 yuan/ton. The downstream phosphate enterprises do not purchase much, and the end users are generally enthusiastic about purchasing. The market demand of autumn fertilizer is not good, the enthusiasm of downstream compound fertilizer enterprises is not high, the price of ammonium market is stable or downward in the short term, and the disadvantage of diammonium market is sorted out, turning to the weak domestic market.

Industry: According to the price monitoring of business associations, in the 33rd week of 2019 (8.19-8.23), the price of phosphorus chemical industry rose or fell by 0 commodities, 2 commodities fell, and 3 commodities rose or fell by 0. The main commodities falling were phosphoric acid (-3.23%) and diammonium phosphate (-0.93%). In the 33rd week of 2019 (8.19-8.23), there were 1 commodity rising in the list of fertilizer prices, 3 commodities falling, and 5 commodities rising or falling to 0. The main commodities rising were liquid ammonia (0.31%) and falling were ammonium sulfate (-1.54%), diammonium phosphate (-0.93%) and potassium sulfate (-0.81%).

3. Future Market Forecast

Phosphoric acid analyst of business cooperative chemical branch thinks: with the market demand of yellow phosphorus getting better and the overall focus going up, phosphoric acid enterprises may increase along with the increase of cost, but the increase is limited. People in the industry are watching the market and most are bullish. It is expected that phosphoric acid future market will still be dominated by consolidation.

I. Overall Trend

In recent March, the trend of three major PE varieties in the domestic market has shown a volatile downward trend. According to the monitoring of business associations, as of August 26, the ex-factory price of LLDPE 7042 in East China had dropped to about 7400 yuan/ton; the ex-factory price of LDPE 2426H had dropped to about 8300 yuan/ton; the ex-factory price of HDPE 5000S had dropped to about 8416.67 yuan/ton; the decline ranged from 100 to 600 yuan/ton.

II. Market Analysis

PE spot market has experienced three setbacks in recent March, falling as a whole. At the beginning of June, due to the off-season demand downstream and the continuous downward trend of linear futures, the market delivery was not smooth and petrochemical stocks accumulated. Most petrochemical enterprises in the region lowered the ex-factory price of PE, which affected the market atmosphere. Traders were pessimistic. The spot market continued to be flat as a whole, and prices were continuously lowered. In mid-June, with the ease of the international economic environment and the arrival of the equipment maintenance season, the market supply has decreased, playing a certain supporting role, and prices have stabilized.

At the end of June, futures rebounded after the fall and continued to rise, coupled with a sharp rise in crude oil, which boosted the spot market. Petrochemical raised the ex-factory price, PE market rose after falling. Traders report high trend, downstream and middlemen purchase part, the speed of consumption of goods is accelerating, replenishing warehouses into the market, the market trading atmosphere improved, and prices rose slightly.

But the prospects are not long, PE spot market fell again in mid-July. Futures trading continued to tumble downward, falling below the 8000 threshold. The market pressure mentality is obvious, downstream enterprises’wait-and-see atmosphere is aggravated, and their enthusiasm for entering the market is declining. Futures continued to decline, market trading was weak, distributors’delivery pressure increased, and the bullish outlook on the future market increased. Petrochemical enterprises have gradually accumulated inventories and factory prices have been lowered. Market cost has lost support and prices have continued to fall. At present, Petrochemical stocks have declined slightly, but the speed is slow, traders are pessimistic, accompanied by underreporting, mainly shipments. The downstream enterprises are weak in receiving goods, purchasing more on demand, running in low inventory, and the overall delivery atmosphere of the spot market continues to be light.

For downstream enterprises, the demand for film materials continued to be weak in June, with limited accumulation of manufacturer orders, a small amount of low start-up, increased demand for sunlight film compared with the earlier period, and the demand for plastic film ended, and the manufacturer gradually turned to shutdown. In July, the demand for functional membranes has been followed up. The production of large and medium-sized enterprises is general, and that of small enterprises is poor. The overall start-up rate is 3-40%, the demand is in the off-season, and the manufacturers are mostly in the state of shutdown. In August, the production of functional film enterprises changed little, orders increased slightly, sunlight film was in the peak season of demand, the production of manufacturers was relatively stable, the start-up rate was 5-80%. The demand for plastic film continues to be weak, and is still mostly in a state of shutdown. Although the peak season of greenhouse film started slowly, the intensity was not as expected, and the number of terminal orders did not increase significantly.

Import and export: In June 2019, PE exports totaled about 186,000 tons. Among them, LLDPE export volume was 0.75 million tons, which was 3.85% lower than that of last month; HDPE export volume was 0.91 million tons, which was 37.67% lower than that of last month; LDPE export volume was 0.22 million tons, which was 31.0% lower than that of last month.

3. Future Market Forecast

Business societies data analysts believe that although the current demand for agricultural film, pipe and other industries has recovered, but not as expected, the demand side slowly improved, continue to short the market. International oil prices and linear futures both fell, to a certain extent, depressed the enthusiasm of the industry to enter the market. In addition, Petrochemical continued to reduce the ex-factory price, the market cost support weakened. Some manufacturers are still in maintenance status, to a certain extent, favorable to the surrounding market, but the peak season of agricultural film started slowly, there is some room for recovery. It is expected that market consolidation or weak consolidation will dominate in the short term.

On August 26, the hydrofluoric acid commodity index was 101.18, which was the same as yesterday. It was 27.95% lower than the peak of 140.43 points in the cycle (2018-02-21), and 88.80% higher than the low of 53.59 points on November 30, 2016. (Note: Period refers to 2011-09-01 to date).

According to statistics, the price trend of domestic hydrofluoric acid market is temporarily stable on August 26. Up to now, the domestic market price of hydrofluoric acid is 11150 yuan/ton, and the domestic start-up rate of hydrofluoric acid is about 60%. Enterprises reflect that the supply of hydrofluoric acid on-site is sufficient at present, and the recent on-site purchasing situation is general. Recently, due to poor downstream demand, some of hydrofluoric acid are available. Acid manufacturers slightly cut prices, hydrofluoric acid market prices fell. At present, the mainstream of hydrofluoric acid negotiations in the southern region is about 10,000-11,000 yuan/ton, while the price of hydrofluoric acid in the northern market is 10,500-11,500 yuan/ton. Domestic hydrofluoric acid market price declined, spot supply is normal, but the demand situation is poor, hydrofluoric acid market price trend maintained temporary stability.

Upstream fluorite prices remained low, up to 26th, the price of fluorite was 3062.5 yuan/ton. The low price of upstream raw materials had a negative impact on the hydrofluoric acid market. The market price of hydrofluoric acid was affected by the lower price of raw materials fluorite. The downstream refrigerant product plant starts at a low level. The demand for upstream fluorite and hydrofluoric acid is poor. Recent downstream refrigerant trading market is general, and the price of hydrofluoric acid products fluctuates. Recent downstream refrigerant market trading market is general, domestic refrigerant R22 market shocks down, from the market supply point of view, the production enterprise device is stable, but the pressure of goods is too high, inventory expansion appears to a certain extent, the enterprise aims to make profits to deliver goods. The downstream weakness continues, the peak season of refrigerants has passed, and demand has only decreased but not increased. The price of domestic large enterprises has maintained the level of 16,000-18,000 yuan/ton. Domestic market price trend of R134a shocks, production enterprises equipment start-up rate remains low, refrigerant market demand is general, manufacturers mainly export. However, the price of on-site transactions does not change much. Businessmen purchase on demand. At the end of the peak season, the downstream demand of terminals decreases but does not increase. The downstream demand is not good, and the price trend of hydrofluoric acid market is low. However, the on-site transaction price does not change much. Businessmen purchase on demand. Recently, due to the normal supply of goods and poor downstream demand, the market price of hydrofluoric acid has declined.

Refrigerant field turnover is poor, refrigerant industry equipment start-up rate remains low, for upstream hydrofluoric acid market demand is limited, hydrofluoric acid spot supply is sufficient, Business Analyst Chen Ling believes that the hydrofluoric acid market may continue to decline.

Price Trends of Spot Precious Metals

On August 26, 2019, the domestic precious metal price of spot gold and silver rose sharply again, opening the second sharp rise in August. Among them, the average daily increase of silver spot price was 4.70%, and the spot price of gold rose 3.54%.

Data from business associations showed that the average spot price of gold in China was 355.65 yuan/g on the 26th, up 12.57% from 315.93 yuan/g on the 1st day, and 25.18% from 284.10 yuan/g at the beginning of the year (01.01). The spot price of silver in China is 4347.33 yuan/kg, which is 12.70% higher than the spot price of 3857.33 yuan/kg on the 1st day. The spot price of silver at the beginning of the year (01.01) is 3617.67 yuan/kg, which is 20.17%.

Precious metal gold spot rally started slightly earlier than silver spot. Spot gold prices bottomed in late April in 2019, while spot silver prices bottomed in late May. According to the data of business associations, the lowest price of spot gold in a year (April 18) is 278.11 yuan/g, with an annual amplitude of 27.29%; the lowest price of spot silver in a year (May 29) is 3481.33 yuan/kg, with an annual amplitude of 23.94% (all based on the market average price on January 1 of the year).

In the first half of July, early August, and today’s sharp rise of 4-5 points, three waves of rapid and steep market, directly pushing up the price of silver. In mid-July, due to the influence of the ratio of gold to silver, the expectation of market replenishment was strengthened, and silver was praised. The two waves of “sudden” since August were mainly due to the obvious influence of “Sino-US trade policy” on both gold and silver.

A Comparison of Price Trends of Precious Metals Gold and Silver
At present, the spot price of precious metals is at the historical point in the past eight years.

On August 26, the gold commodity index was 94.49, up 3.23 points from yesterday, down 9.22% from 104.09 points in the cycle (2011-09-06) and 63.82% from 57.68 points on August 02, 2015. (Note: Period refers to 2011-09-01 to date)
On August 26, the silver commodity index was 49.58, up 2.22 points from yesterday, down 51.75% from the cyclical peak of 102.76 points (2011-09-06), and up 38.61% from the lowest point of 35.77 on December 03, 2015. (Note: Period refers to 2011-09-01 to date)
“Risk aversion” dominated by Sino-US trade policy

The US side:

1. US President Trump said on August 1 that the US will impose a 10% tariff on 300 billion US dollars imported from China from September 1 this year. The devil’s technique of extreme pressure by the US side has added enormous uncertainties to the ongoing Sino-US trade negotiations.

2. On August 5, the U.S. Treasury listed China as a “currency manipulator”. The People’s Bank of China issued a statement Tuesday saying that China deeply regrets this. This label does not conform to the so-called “exchange rate manipulator” quantitative standard formulated by the U.S. Treasury. It is a wayward unilateralism and protectionist act, which seriously undermines international rules and will have a significant impact on the global economy and finance.

3. On the evening of August 23, President Trump announced on Twitter that from October 1, the tariff on $250 billion of Chinese goods would be raised from 25% to 30%, and that the 10% tariff on $300 billion of Chinese goods would be raised to 15% from September 1.

China:

1. A press release released by the Ministry of Commerce in the early morning of August 6 shows that Chinese enterprises have suspended new purchases of American agricultural products. The State Council Tariff and Tax Commission does not exclude tariffs on imports of new US agricultural products after August 3. Chinese enterprises have suspended purchasing American agricultural products.

Towards September 1, the United States imposed a 10% tariff on China’s $300 billion commodities, forcing China to take legitimate counter-measures. On the afternoon of August 23, China announced a tariff increase of 5% to 10% on US $75 billion commodities, which will be implemented in two batches starting from September 1 and December 15. In accordance with the Customs Law of the People’s Republic of China, the Foreign Trade Law of the People’s Republic of China, the Import and Export Tariff Regulations of the People’s Republic of China and other basic principles of international law, and with the approval of the State Council, the Customs and Tariff Commission of the State Council has decided to impose on 5078 items of tax originating in the United States, about $75 billion of goods The 10% and 5% tariffs will be levied in two batches starting at 12:01 on September 1 and 12:01 on December 15, 2019.
At present, the news of Sino-US trade war basically dominates the market’s “risk aversion sentiment”. Under the globally unoptimistic economic and trade situation, the allocation value of precious metals’value preservation and appreciation and anti-inflation hedging is highlighted. The price of precious metals is sensitive in both futures market and spot market after “weekend mood brewing”.

Rising expectations of monetary easing and surging demand for gold reserves by central banks

As the global recession continues, manufacturing inflation data continues to slump, global bond markets have also issued alarm signals, and central banks’easing stance has been further strengthened. The Federal Reserve’s “first drop” in 10 years triggered expectations of the start of the interest rate reduction cycle; after Australia, India, Russia, South Korea and other countries announced interest rate cuts, the ECB also expressed strong easing willingness in early August, with the New Zealand Federal Reserve unexpectedly cutting interest rates by 50 basis points on the 7th.

Meanwhile, the appetite of central banks for precious metals has risen sharply. The Central Bank of Russia has performed particularly well. According to the latest data released by the Central Bank of Russia, Russia has purchased 3.4 million ounces or 106 tons of gold this year, adding a large amount of gold every month. Gold currently accounts for 19.6% of Russia’s total reserves. According to the latest official data, the Russian Central Bank purchased 300,000 ounces or 9 tons of gold in July, 600,000 ounces in June, 200,000 ounces in May, 550,000 ounces in April, 600,000 ounces in March, 1 million ounces in February and 200,000 ounces in January. As of August 1, gold reserves totaled 71.3 million ounces or 2,218 tons, compared with 71 million ounces or 2,208 tons on July 1, with an increase of 1.6% or $101.9 billion in total value.

According to data released by the World Gold Association in August, as of June 2019, the world’s official gold reserves totaled 34,076.88 tons. Among them, the euro area (including the European Central Bank) totals 10,776.9 tons, accounting for 55.8% of its total foreign exchange reserves, and the central bank sales agreement (CBGA) signatories totals 10,901.5 tons, accounting for 52.7% of its total foreign exchange reserves.

In the first half of 2019, global central banks’net purchases amounted to 374.1 tons, up 57% year-on-year, the highest level since central banks became net buyers in 2010 (in annual terms).

World’s Top Fifteen Official Gold Reserve Data Sheets (as of June 2019)
Domestic gold reserves have also increased. According to data released by the Bureau of Investigation and Statistics of the People’s Bank of China, by the end of July, China’s gold reserves had increased by 9.95 tons to 1,936.5 tons, realizing an eight-month increase in gold reserves since December 2018.

How far can the precious metal market go?

Although the US side is preemptive and aggressive, China has always maintained relative restraint and rationality. It is reported that on the morning of August 26, Vice Premier Liu He of the State Council expressed his firm opposition to the escalation of the trade war when he attended the opening ceremony of the 2019 Chongqing Intelligent Industry Expo (China International Intelligent Industry Expo). Liu He said: “We are willing to resolve the problem through consultation and cooperation in a calm manner and resolutely oppose the escalation of the trade war. We believe that the escalation of trade war is not conducive to China, the United States and the interests of the people of the world.”

Generally speaking, unilateralism and trade protectionism are intensifying, and there are still more uncertain risks in Sino-US trade. In addition, the expectations of interest rate cuts of central banks have increased, the market hedging sentiment has risen, and the advantages of precious metal hedging, value preservation and appreciation, and anti-inflation have been favored by the market. Business analysts believe that the price of precious metals has tended to a relatively high level in the history of gold, but there is still room for a larger rise; silver has a stronger industrial attribute, and the correlation with non-ferrous plate is greater than gold. At present, the relatively low level, precious metals gold natural currency attributes lead to an obvious upward phenomenon. The future market is waiting to see the change of risk aversion enthusiasm, and it is expected that strong operation will be the main trend in the near future.

Price Trend

According to the data monitored by business associations, on August 19, PET water bottle manufacturers quoted 7150 yuan/ton, and on August 23, PET water bottle manufacturers quoted 7100 yuan/ton. The overall price fell by 0.7%. This week, the price of PET continued to fall.

II. Cause Analysis

Product aspect: This week, polyester plant starts to rebound and inventory falls back. Influenced by the fall of PTA price of upstream raw materials, the spot price of PET fell with the market. The downstream enterprises are in a wait-and-see atmosphere, just need to purchase, the market turnover is general, and the price center of the manufacturer is down. Macroeconomic climate is bad, raw material end maintenance equipment is gradually restored, market supply is sufficient, market promotion is not strong, temporarily no good support, PET manufacturers yield, quotation fell, as of August 23, the mainstream price range of PET water bottle manufacturers is 6950-7100 yuan/ton.

Raw Material: Recent (August 19 – August 23) spot market price of PTA raw material has dropped slightly. Recent PTA supply side has restarted a number of devices, which has suppressed prices and insufficient cost side support. At the same time, the start-up rate of raw material ethylene glycol plant was stable, the port inventory was reduced, and the price of Lido ethylene glycol rose slightly by 1.46%, and the operation was reorganized. Material end support is general, PET prices continue to be weak consolidation, the overall decline of 3.4%, the overall market consolidation of the industrial chain is the main.

Industry: On August 23, the rubber and plastic index was 674 points, down 3 points from yesterday, down 36.42% from the highest point of 1060 points in the cycle (2012-03-14), up 17.01% from the lowest point of 576 points on December 21, 2015. (Note: Cycle refers to 2011-12-01 to date) This week, commodity market is mainly narrow consolidation, the overall trend of rubber and plastic industry is weak downward.

3. Future Market Forecast

PET analysts believe that: in the near future, there is no obvious advantage in terms of cost, insufficient cost support for the market, continued weak downstream demand, strong wait-and-see atmosphere of manufacturers, pressure drop of PET market, but the decline space is limited. It is expected that the broad fluctuation of PET market will dominate in the short term.

Price Trend

According to the monitoring data of business associations, the stable operation of soda ash this week is dominant. At the beginning of the week, the average market price in East China was 1676.67 yuan/ton from the beginning of the week to the end of the week, down 21.04% from the same period last year. On August 23, the light soda commodity index was 85.98, which was the same as yesterday. It was 27.05% lower than the peak of 117.86 points (2017-11-21) in the cycle and 36.15% higher than the low of 63.15 points on November 18, 2015. (Note: Period refers to 2011-09-01 to date)

II. Market Analysis

Products: This week, the domestic soda price maintained stable operation, the market is weak and stable, manufacturers have sufficient orders, the current domestic mainstream light soda factory price is 1520-1700 yuan/ton; domestic heavy soda mainstream to the terminal price is 1700-1850 yuan/ton, this week, the heavy soda market changes little, manufacturers shipment situation is relatively smooth, the market stock is bullish. It is expected that some manufacturers will implement the end-of-month pricing.

Industry chain: the downstream cryolite plant is running normally at present, the factory stock is sufficient and pressure-free, the ex-factory quotation is temporarily stable; the price of sodium pyrosulfite continues to run at the bottom this week, the overall market is still depressed, the cost of raw materials continues to depress, the upstream and downstream trading entities are cautious in buying and selling as a whole, and the downstream trading entities are watching. Attitude is strong, domestic sodium pyrosulfite market prices continued to operate at a low level this week. This week, the downstream glass market continued to rise, with a slight increase. The orders of downstream processing enterprises did not change significantly. There was a slight increase in the north, market demand was better, and TRADERS’enthusiasm for stock-up increased slightly.

Industry: This week the soda market reorganization operation is the main, soda manufacturers start-up load is not high, overhaul manufacturers increase, supply reduction, soda manufacturers maintain low inventory. Demand downstream is flat, and end users and some traders are generally motivated to get goods.

3. Future Market Forecast

Business analysts believe that this week, the domestic light alkali market has been running steadily, the number of maintenance manufacturers has increased, the supply of goods has decreased, and the inventory of soda manufacturers has remained low. It is expected that the soda market will run steadily in the short term, depending on the downstream market demand.