Aluminum prices are rising

Aluminum prices have risen this week. According to the Commodity Market Analysis System of Business Society, the average price of aluminum ingots in the East China market on May 17, 2024 was 20733.33 yuan/ton, an increase of 0.86% compared to the average market price of 20556.67 yuan/ton on May 10 last Friday.

Rising prices of raw alumina

According to the commodity market analysis system of Shengyishe, as of May 17th, the average price of alumina in the market was 3800 yuan/ton, and on May 10th, the average price of alumina in the market was 3616 yuan/ton, an increase of 5.07% compared to last week.

The rapid increase in alumina prices has provided strong cost support for aluminum ingot prices.

Expected conversion of terminal demand for the new real estate policy

Real estate benefits: 5 consecutive new policies:

1. The central bank plans to establish a re loan for affordable housing with a scale of 300 billion yuan, which can be extended four times

The People’s Bank of China announced on May 17th that it plans to establish re loans for affordable housing. The scale of the re loan is 300 billion yuan, with an interest rate of 1.75% and a term of 1 year, which can be extended four times. The distribution targets include 21 national banks, including China Development Bank, policy banks, state-owned commercial banks, Postal Savings Bank, and joint-stock commercial banks. Banks, in accordance with the principles of independent decision-making and risk-taking, issue loans to local state-owned enterprises selected by urban governments to purchase completed but unsold commercial housing for use as affordable housing. The People’s Bank of China will issue re loans based on 60% of the loan principal, which can drive bank loans of 500 billion yuan.

2. Two departments: The down payment for the first house loan shall not be less than 15%, and the down payment for the second house loan shall not be less than 25%

The People’s Bank of China and the State Administration for Financial Supervision and Administration: For residential households who purchase commercial housing with loans, the minimum down payment ratio for commercial personal housing loans for the first housing is adjusted to not less than 15%, and the minimum down payment ratio for commercial personal housing loans for second housing is adjusted to not less than 25%. On this basis, the provincial branches of the People’s Bank of China and the dispatched agencies of the State Administration for Financial Supervision and Administration independently determine the minimum down payment ratio for commercial personal housing loans for first and second homes in each city under their jurisdiction in accordance with the requirements of urban government regulation and the principle of implementing policies based on the city.

3. Central Bank: Cancel the lower limit of interest rates for first and second home commercial loans

The central bank has issued a notice on adjusting the interest rate policy for commercial personal housing loans. 1、 Cancel the lower limit of commercial personal housing loan interest rates for first and second homes at the national level. 2、 The provincial branches of the People’s Bank of China, in accordance with the principle of implementing policies based on the city, guide the pricing and self-discipline mechanism of market interest rates at each provincial level. Based on the real estate market situation in each city within their jurisdiction and local government regulatory requirements, they independently determine whether to set the lower limit and lower limit level (if any) of commercial personal housing loan interest rates in each city within their jurisdiction. 3、 Banking and financial institutions should reasonably determine the specific interest rate level for each loan based on the lower limit of interest rates determined by the self-discipline mechanism of market interest rate pricing at each provincial level (if any), combined with factors such as the operating conditions of the institution and customer risk conditions. If there is any inconsistency between the previous relevant regulations and this notice, this notice shall prevail.

4. Central Bank: Lowering Provident Fund Loan Interest Rate by 0.25 percentage points

Central Bank: Starting from May 18, 2024, the interest rate for personal housing provident fund loans will be lowered by 0.25 percentage points. The interest rates for personal housing provident fund loans for first homes under 5 years (including 5 years) and over 5 years will be adjusted to 2.35% and 2.85%, respectively. The interest rates for personal housing provident fund loans for second homes under 5 years (including 5 years) and over 5 years will be adjusted to not less than 2.775% and 3.325%, respectively.

5. The government may, at its discretion, purchase some commercial housing at a reasonable price

The national video conference on effectively ensuring the delivery of housing was held in Beijing on the 17th. The attendees pointed out that real estate is related to the vital interests of the people and the overall economic and social development. At present, efforts should be made to classify and promote the disposal of unsold but difficult to deliver commercial housing projects under construction, fully support the financing and completion delivery of projects that should be continued, and protect the legitimate rights and interests of homebuyers. Local governments should take practical measures and appropriately dispose of idle residential land that has been sold through methods such as recovery and acquisition, in order to help financially disadvantaged real estate enterprises overcome difficulties. In cities with a large inventory of commercial housing, the government may need to place an order and purchase some commercial housing at a reasonable price as affordable housing. We must continue to do a good job in preventing and disposing of debt risks in real estate enterprises, and solidly promote the construction of affordable housing, urban village renovation, and the construction of public infrastructure for both emergency and emergency use.

Macro sentiment drives non-ferrous metals to stop falling and rebound

The non farm payroll data in the United States in April fell short of expectations, while other economic data showed a weakening of inflation expectations in the United States, and the Federal Reserve’s biased stance led the market to regain expectations of interest rate cuts. The number of initial jobless claims in the United States announced on Thursday exceeded expectations and rebounded, reaching a new high since August 2023. The US dollar weakened, and the non-ferrous metal sector rebounded.

The probability of aluminum price fluctuations in the future increases

At present, there is not much explicit inventory of aluminum ingots in China, and the post holiday inventory situation is better than market expectations. There is expected to be an increase in supply, but due to the relatively high domestic aluminum prices, the import window is closed, and the surge in LME inventory has little impact on the domestic market. The inventory of aluminum ingots and rods in mainstream consumer areas has been slightly depleted, with good consumption expectations. In the short term, a relative balance between supply and demand has been formed, and it is expected that the probability of future market fluctuations will increase.

According to the Commodity Market Analysis System of Business Society, as of May 15th, the average price of melamine enterprises was 7025.00 yuan/ton, which is basically unchanged compared to last Wednesday’s price.

Recently, the melamine market has been steadily consolidating and operating. At this stage, the price of raw material urea has risen, and the cost pressure on melamine production enterprises continues to increase. However, due to weak domestic downstream demand, the difficulty of raising prices has increased. On the demand side, downstream buyers only followed up with a moderate amount of demand, and the market atmosphere for new orders was flat, with some export orders still supported. On the supply side, some devices fluctuate, and the industry’s production is at a high level. Cost support is strong, but overall supply and demand support is insufficient, resulting in a stalemate in the melamine market atmosphere.

Raw material urea:

According to the commodity market analysis system of Shengyishe, the reference price for urea on May 15th was 2467.50, an increase of 1.3% compared to May 1st (2435.83). Recently, due to the strong impact of raw material urea prices, the cost of melamine in the market has been under pressure.

Future Market Forecast:

The melamine analyst from Business Society believes that the current market cost and demand game is a strong wait-and-see atmosphere, and it is expected that the melamine market will stabilize slightly in the short term. More attention needs to be paid to changes in raw material prices.

1、 Price trend

According to the monitoring of the commodity market analysis system of Shengyishe, sodium hypophosphate has been running smoothly this month. As of May 16th, the mainstream price of sodium hypophosphate (2123, 99% content) in China was 14733.33 yuan/ton, which is the same as last month. The mainstream price of sodium hypophosphate (2123102% content) is 20533.33 yuan/ton, which is unchanged from the previous month.

2、 Market analysis

Cost side:

On May 16th, the price of yellow phosphorus in the market slightly declined. The benchmark price of yellow phosphorus in Shengyishe was 22760 yuan/ton, a decrease of 36 yuan from last week, a decrease of 0.15%, and a decrease of 833 yuan, a decrease of 3.67% from May 1st. Currently, the trading situation in the yellow phosphorus market is average, and downstream inquiries are more active. Purchasing is mainly driven by price pressure. Currently, many manufacturers do not provide external quotations, and negotiations are the main focus. Overall, the transaction in the market is still acceptable.

3、 Future Market Forecast

The recent market trend of sodium phosphate has been sideways. From a cost perspective, the market price of raw material yellow phosphorus has slightly declined this week, indicating a bearish performance on the cost side. From the perspective of supply and demand, the main downstream flame retardants have average market trading volume

The terminal new energy vehicle market has recently shown some fluctuations in April. In April’s sales data, there was a slight decline in sales compared to the previous month. This phenomenon is mainly attributed to the instability of prices, which makes many potential consumers appear more cautious and cautious in their car purchase decisions. Due to the slowdown in sales, enterprises are facing pressure from a backlog of finished product inventory. In response to this challenge, some automotive companies have begun to adjust their production control and raw material procurement strategies to optimize inventory and cost control.

The weakening of cost support combined with sluggish terminal demand is expected to lead to a weak consolidation of the sodium hypophosphate market in the near future.

Price increase of new pentanediol enterprises

According to the Commodity Market Analysis System of Shengyishe, as of May 15th, the price of new pentanediol was quoted at 10100 yuan/ton, an increase of 1.34% compared to the price of 9966.67 yuan/ton quoted on May 1st. In May, prices of new pentanediol enterprises increased. The rising cost of raw materials and the tightening of market supply have increased the driving force for the price increase of new pentanediol.

The price of raw material isobutyraldehyde first fell and then rose

According to the Commodity Market Analysis System of Shengyishe, as of May 15th, the domestic quotation for isobutyraldehyde was 8050 yuan/ton, which decreased first and then increased compared to May 7th’s isobutyraldehyde price of 7975 yuan/ton, with an increase of 0.94%; The price of isobutyraldehyde has increased by 2.88% compared to 7825 yuan/ton on May 11th; Compared to May 1st, the price of isobutyraldehyde increased by 5.23% to 7650 yuan/ton. After the holiday, the price of isobutyraldehyde rose sharply, but downstream demand support was limited, and the price of isobutyraldehyde fell from a high level. However, as the price of isobutyraldehyde fell, manufacturers’ willingness to ship decreased, the supply of isobutyraldehyde tightened, and the price of isobutyraldehyde rebounded and rose.

The price of raw material formaldehyde has increased

According to the Commodity Market Analysis System of Business Society, as of May 15th, the domestic formaldehyde quotation was 1237.50 yuan/ton, an increase of 1.02% from the formaldehyde price of 1225 yuan/ton on May 7th; Compared to May 1st, the price of formaldehyde increased by 2.06% to 1212.50 yuan/ton. In May, the price of raw material methanol increased significantly, with strong cost support. Downstream purchases remained in demand, while formaldehyde prices followed the changes in methanol. Methanol prices fell from high levels, while formaldehyde prices showed weak follow-up. Formaldehyde prices also slightly declined. Cost support weakened, while support for the price increase of new pentanediol remains.

Market Overview and Forecast

An analyst at Shengyishe believes that in terms of cost, the prices of formaldehyde and isobutyraldehyde have fluctuated and increased, while the cost of new pentanediol has increased. In terms of supply and demand, the fundamentals of new pentanediol are relatively balanced, and some new pentanediol manufacturers are closing their stocks and reluctant to sell. The support for the price increase of new pentanediol is increasing. Overall, the cost support for neopentyl glycol is increasing, neopentyl glycol manufacturers are reluctant to sell, neopentyl glycol supply is tightening, and downstream demand support is limited. It is expected that the price of neopentyl glycol will fluctuate and rise in the future.

In the first half of May, the domestic ABS market experienced a high decline, with most brands experiencing a decrease in spot prices. According to the Commodity Market Analysis System of Business Society, as of May 14th, the average price of ABS sample products was 12375 yuan/ton, a decrease of -0.80% from the price level on May 1st.

Fundamental analysis

Supply level: At the beginning of this month, the domestic ABS industry took on a low load pattern in the early stage. After a four month upward trend, the price of ABS has risen to a high level, and the profitability of aggregation enterprises has improved. In the first half of May, there were operations to increase load and expand profits, and the average operating rate of domestic ABS enterprises increased by nearly 10% to over 62%. The production has increased synchronously, and the supply of goods on site has also increased accordingly. And there are still expectations for improvement in the future, with supply side support for ABS spot gradually weakening.

Cost factor: In the past half month, the trend of ABS upstream three materials has generally turned downward. Although acrylonitrile has the advantage of rising raw material prices, the concentrated resumption of maintenance equipment has a relatively negative impact on the acrylonitrile market overall. The current spot prices are fluctuating and falling, and it is expected that the acrylonitrile market may continue to be weak.

Recently, the domestic butadiene market has remained stable with some declines. Downstream follow-up is required after the holiday, and the pressure from suppliers is not significant. However, the external market prices have weakened, and the news of low-priced transactions has stimulated the domestic market. Buyers have a lower intention to inquire about prices, and the mentality of merchants is gradually weakening. The market supply and demand are deadlocked, and it is expected that the butadiene market may be weak and consolidate.

Since May, the styrene market has continued to decline. International oil prices fluctuate in the interval, with poor cost support. The spot demand is mainly for rigid demand, while the price of styrene was previously high. Downstream resistance to high-end offers has emerged, and it is expected that styrene will mainly fluctuate and decline in the future.

In terms of demand: The main terminal demand for ABS has remained stable with a slight decrease, and the overall load of downstream factories has remained generally stable. The stocking operation is mainly focused on buying in demand. Traders are flexible in their orders, leading to an increase in low-end market offers and a decrease in the speed of goods circulation. The market momentum has weakened, and the demand side has weakened its support for the market.

Future Market Forecast

In the first half of May, domestic ABS prices fluctuated and fell. From a fundamental perspective, the center of gravity of the upstream three materials of ABS is falling, which weakens the cost support for ABS. The construction of ABS polymerization plant has significantly increased, and supply pressure is gradually increasing. The demand side’s demand logic remains unchanged, and the support for spot goods is mediocre. In summary, it is expected that the ABS market may experience a weak downward trend in the short term.

Price trend

Recently, the domestic POM market has been operating sideways, with spot prices relatively firm. According to the Commodity Market Analysis System of Shengyishe, as of May 13th, the mixed price of domestic POM was 12700 yuan/ton, which is the same as the price level on May 1st.

Cause analysis

In terms of raw materials:

The domestic methanol market is mainly experiencing a narrow upward trend. In recent times, there has been little contradiction in the fundamentals of methanol. The inventory of mainland sample enterprises is relatively low, and there is not much pressure on their shipments. In addition, some enterprises are outsourcing, resulting in a relatively high market atmosphere. The overall market is mainly strong. Downstream MTBE: After Yuhuang starts construction, it will affect next week’s production, leading to an increase in MTBE demand; Downstream chloride: After the shutdown and maintenance of mainstream factories in Shandong, the equipment returned to normal, and the demand for chloride increased; In the short term, the domestic methanol market is mainly weak and consolidating, and overall support for POM is still acceptable.

In terms of supply:

Recently, the operating rate of domestic POM enterprises has been adjusted and operated, with an overall load of around 77%, with a narrow decline. There is a maintenance plan for Shenhua Ningmei in the later stage, and there is an expectation of supply contraction. After a week of digestion, the inventory position of the aggregation plant has decreased. In addition, with the increase in imported material prices, manufacturers have strong confidence and pricing is generally firm. Overall, the pressure on the supply side is not significant.

In terms of demand:

The stocking situation of domestic POM downstream enterprises is average, and most of them just need to pick up goods to maintain production. The main logic for terminal factories to obtain goods is to maintain and digest inventory, and the flow rate of goods within the site is relatively slow. The release of post holiday stocking is not obvious, and the consumption level is still following the previous weak trend. The mentality of traders is average. Overall, the demand side has poor support for POM spot prices.

Future Market Forecast

The recent trend of the POM market has been strong. The operating rate of domestic polymerization plants has been adjusted narrowly, and there are still maintenance enterprises in the future, which has eased the pressure on the supply side. Downstream consumer follow-up remains weak, with POM long and short facing each other. It is expected that the future market will mainly fluctuate and consolidate.

Small fluctuations in the plasticizer sector after the holiday

According to the Commodity Market Analysis System of Shengyishe, the plasticizer sector reached 786 points on May 10th, an increase of 1 point from yesterday and 3 points from the plasticizer sector index of 783 points on May 1st, an increase of 0.38%; The plasticizer sector index increased by 5 points, or 0.64%, compared to 781 points on April 21. Starting from late April, the index of the plasticizer sector has slightly increased, but overall, the fluctuation of the plasticizer sector index is relatively small, and the fluctuation range has significantly narrowed. After the holiday, the index of the plasticizer sector has risen or fallen within 0.5%.

According to the Commodity Market Analysis System of Business Society, the average weekly increase and decrease in the 19th week of 2024 (5.6-5.10) was 0.07%. In the 19th week of 2024 (5.6-5.10), there were a total of 3 products that went up, 4 products that went down, and 2 products that went up or down to 0 on the plasticizer price list. The main rising commodities include PVC (1.37%), n-butanol (industrial grade) (0.42%), and DBP (0.40%); The main commodities falling include PTA (-0.55%), DOP (-0.51%), and isooctanol (-0.41%). This week, the plasticizer sector saw a slight increase or decrease in product prices, with major products experiencing fluctuations within 1%.

According to the Commodity Market Analysis System of Business Society, the main plasticizer sector products showed a slight increase in May, while downstream product prices slightly rebounded. The prices of plasticizer raw materials octanol and n-butanol increased, and the main plasticizer products showed varying degrees of increase. The plasticizer sector saw a slight overall increase in May.

Main plasticizer products saw a slight increase in May

According to the commodity market analysis system of Business Society, the main plasticizer products saw a slight increase in May. As of May 11th, DOP prices have slightly increased by 1.02%, DOTP prices have slightly increased by 1.26%, and DBP prices have slightly increased by 0.94%. During the May Day holiday, some production facilities of plasticizer enterprises were shut down for maintenance, and the operating rate of plasticizer enterprises decreased to 60%, slightly lower than before the holiday. After the holiday, with the completion of maintenance, it is expected that the operating rate of plasticizer enterprises will gradually recover to around 66%, and the supply will gradually increase. Cost support has led to an increase in plasticizer product prices, but with an increase in plasticizer supply, there is insufficient support for the overall increase in plasticizer prices.

The price of isooctanol slightly increased in May

According to the Commodity Market Analysis System of Shengyishe, as of May 11th, the price of isooctanol was 9750 yuan/ton, a slight increase of 0.93% compared to the price of isooctanol on May 1st, which was 9660 yuan/ton. The price fluctuations of octanol products have narrowed. In May, the maintenance equipment of octanol enterprises resumed, and the operating rate of octanol increased to 98%, an increase of 5 percentage points from the operating rate in April. In early May, the supply of octanol increased, and downstream purchases were made as needed. In mid to late May, some manufacturers plan to shut down their octanol units for maintenance. In mid to late May, the domestic octanol supply is expected to decrease, and the production of plasticizer devices is basically stable and maintains a relatively high level. The octanol market lacks continuous upward momentum.

The price of n-butanol slightly increased in May

According to the analysis system of n-butanol commodity market by Business Society, as of May 11th, the quotation for n-butanol was 7900 yuan/ton, a slight increase of 0.85% compared to the price of 7833.33 yuan/ton on May 1st. After the holiday, the n-butanol market in Shandong region showed a slight increase and remained stable. During the holiday period, the supply and demand of n-butanol were weak, and the overall market was operating quietly. After the holiday, some downstream small areas needed replenishment, and the focus of the n-butanol market slightly increased. In the future, it is expected that the n-butanol market will remain stable and consolidate overall.

Expected decrease in downstream demand

The domestic PVC social inventory was 598700 tons, an increase of 0.37% month on month and 22.07% year-on-year. PVC production enterprises maintain high inventory levels, which are affected by high operating loads and slow inventory removal; In the pattern of high supply and weak demand, the difficulty of destocking in the market and society has increased, and the risk of subsequent accumulation remains. The global PVC prices have fallen in May, leading to weak demand in the export market. The maintenance intensity of the domestic PVC market decreased month on month in May, with sufficient supply in the PVC market, stable downstream terminal demand as the main factor, weak external exports, and soft supply and demand in the PVC market, resulting in low consolidation of PVC prices.

Future expectations

Business Society plasticizer product data analysts believe that the plasticizer market experienced slight fluctuations in May, with prices of raw materials such as isooctanol and n-butanol rising slightly. Downstream enterprises maintained high production levels, and plasticizer demand support still exists. However, downstream demand expectations are expected to decrease in the future, and plasticizer demand remains weak. In the future, the prices of raw materials have become strong and stable, with insufficient cost support; Downstream demand expectations are expected to decrease, while plasticizers are supported by rising prices, leading to weak consolidation in the plasticizer sector in the future.

This week, the sponge titanium market prices remained strong. According to the commodity market analysis system of Shengyishe, as of May 9th, the benchmark price of Shengyishe sponge titanium was 54750.00 yuan/ton, which is the same as the beginning of this month.

In terms of raw materials, the high price of titanium concentrate has put pressure on the cost of high titanium slag enterprises. In addition, with the increase in electricity prices in Liaoning region, most production enterprises have suffered losses, and the market price of high titanium slag is under pressure and rising. According to the monitoring system of Business Society, as of May 9th, the benchmark price of magnesium in Business Society was 18466.67 yuan/ton, a decrease of -1.07% compared to the beginning of this month (18666.67 yuan/ton).

Downstream titanium material market demand is weak, and the market transaction atmosphere is cold.

Post forecast:

Due to the high prices in the raw material market, magnesium ingot prices have fallen, sponge titanium production capacity has been continuously released, and production has increased. However, downstream market demand is weak, and the transaction atmosphere is cold, presenting a state of supply-demand imbalance. According to analysts from Business Society Sponge Titanium, the sponge titanium market is expected to remain strong in the near future. More attention should be paid to market news guidelines.

According to monitoring data from Business Society, as of April 30, 2023, the reference price of n-butanol in Shandong Province, China was 7833 yuan/ton. Compared with April 1 (reference price of n-butanol was 7950 yuan/ton), the price decreased by 117 yuan/ton, a decrease of 1.47%.

From the commodity market analysis system of Shengyishe, it can be seen that in April, the n-butanol market in Shandong Province, China, as a whole, showed a trend of frequent fluctuations and ending decline. In early April, approaching the eve of the Qingming Festival, the trading volume of n-butanol market turned weak, and the market price fell to the low point of the month. Downstream users sought to stock up on dips, and with demand boosting, the market quickly rebounded. However, after a brief rise, the demand side returned to calm, and the price of n-butanol market also began to fall. Some downstream users started to stage stocking, and the n-butanol market began to fluctuate with the continuous changes in demand. As of April 30th, the domestic market price of n-butanol in Shandong region is around 7800-7900 yuan/ton, and compared with the beginning of the month, the price has been reduced by about 100-150 yuan/ton.

Market price situation of n-butanol

Region/ Product/ April 30th

Shandong region/ N-butanol/ 7800-7900./-400

North China region/ N-butanol/ 7950-8050

South China region/ N-butanol/ 8200-8300

East China region/ N-butanol/ 8200-8300

Future analysis

At present, the overall trading atmosphere of the domestic Shandong region’s n-butanol market is quiet and mild, with downstream demand being for essential purchases. The pressure on the supply side of n-butanol factories is still acceptable. The n-butanol data analyst from Business Society believes that in the short term, the domestic n-butanol market will mainly adjust slightly, and the specific trend still needs to pay more attention to changes in supply and demand news.

After the holiday, the weak market for hexafluoropropylene was mainly consolidated. The follow-up of downstream inquiries and procurement is average, and the transaction atmosphere is average. According to the data monitoring system of Shengyishe, as of May 7th, the benchmark price of hexafluoropropylene in Shengyishe was 35875.00 yuan/ton, unchanged from the beginning of this month.

Raw material side: High cost prices are under pressure, and production enterprises have thin profits. On May 7th, the price trend of domestic hydrofluoric acid market increased, the on-site equipment operated stably, and the supply of goods was normal. According to the data monitoring system of Business Society, as of May 7th, the benchmark price of hydrofluoric acid (export) in Business Society was 14150.00 yuan/ton, an increase of 2.54% compared to the beginning of this month (13800.00 yuan/ton). The domestic fluorite market has risen. As of May 7th, the benchmark price of Shengyishe fluorite was 3687.50 yuan/ton, an increase of 0.34% compared to the beginning of this month (3675.00 yuan/ton).

The downstream market is relatively quiet, with poor demand, and the focus is on purchasing for essential needs.

Business Society’s hexafluoropropylene analyst predicts that due to the recent high cost support of hexafluoropropylene, downstream market demand is poor, and on-demand procurement is affected. It is expected that the hexafluoropropylene market will operate weakly and steadily in the near future. More attention should be paid to market news guidelines.