This week, the domestic glycerol market prices remained weak and stable. According to the data monitoring system of Business Society, as of May 24th, the benchmark price of glycerol in Business Society was 4275.00 yuan/ton, a decrease of -1.16% compared to the beginning of this month (4325.00 yuan/ton).

Influencing factors: In terms of palm oil, due to the fact that Malay palm oil is in the production cycle and the external market is not good, the overall palm oil market has slightly fluctuated and risen. According to data from Business Society, as of May 24th, the benchmark price of palm oil in Business Society was 7894.00 yuan/ton, a decrease of -0.83% compared to the beginning of this month (7960.00 yuan/ton).

On the external side, the price of glycerol is stable, with a small quantity and not many offers. The domestic downstream market demand for epichlorohydrin is weak, and the purchasing atmosphere is not strong. At present, the market trading volume is insufficient and orders are limited, with a focus on wait-and-see.

Post forecast: According to the glycerol data analyst from Business Society, the market price of raw palm oil has risen, downstream demand is cold, and procurement is not active. In the near future, domestic glycerol has been operating weakly and steadily. For more information, please pay attention to the dynamics of external quotation and market guidance.

According to the Commodity Market Analysis System of Business Society, the domestic PTA spot market fluctuated and rose this week (May 20-25). As of May 25, the average market price in East China was 5946 yuan/ton, an increase of 0.52% compared to the beginning of the week.

There have been many changes in domestic PTA equipment this week, with Dongying United’s 2.5 million ton PTA equipment undergoing maintenance for about 40 days on May 6th. The 3.3 million ton device of Yisheng New Materials will undergo maintenance for about 20 days on May 16th. The Ningbo Taihua 1.5 million ton plant was shut down for one month on May 23rd. The 1.25 million ton PTA plant of Ineos located in Zhuhai has been temporarily shut down for 4 days since May 20th and resumed operation over the weekend. At present, the PTA operating rate in the industry is around 75%, and there will be no equipment changes next week.

At the beginning of the week, due to the expected improvement in oil demand and the decrease in US crude oil inventories, the geopolitical situation was tense, and multiple factors drove up international oil prices, which boosted the PTA market. However, due to the possible postponement of interest rate cuts and unexpected increase in US oil inventories as shown in Federal Reserve minutes, oil prices have been adjusted downwards for multiple trading days. As of May 23, the settlement price of the main contract for WTI crude oil futures in the United States was $76.87 per barrel, and the settlement price of the main contract for Brent crude oil futures was $81.36 per barrel, with WTI crude oil falling to a nearly three-month low.

In the PX market, the 550000 ton PX plant in Malaysia restarted earlier this week and was shut down due to a malfunction on May 9th. At the same time, Saudi Arabia’s 1.34 million ton PX plant also experienced an unexpected shutdown due to unstable operation and low load operation. Since May, due to frequent unexpected shutdowns of the equipment, the supply pressure has been alleviated.

Downstream mainstream polyester factories are gradually reducing production, with a strong intention to support the market and appropriate replenishment of raw materials. Under the seasonal off-season at the terminal, downstream buying intentions remain limited. With the approaching summer weather turning hot, the decline in polyester production has become a major trend, weakening the demand for PTA, PTA has accumulated inventory expectations. The decrease in demand will strengthen the impact of PTA oversupply and create a negative impact on PTA prices.

Business Society analysts believe that with the decline in crude oil prices, support for PTA costs will weaken, and downstream polyester factories are more likely to reduce production, leading to a decrease in demand for PTA. At the same time, it is still necessary to pay attention to whether there is an increase in unplanned maintenance of PTA devices under low processing costs. Overall, there is currently no bullish news on the fundamentals, The possibility of PTA price decline is high.

With the downward adjustment of international crude oil prices and the lack of highlights in its own fundamentals, PTA prices have experienced a slight decline. According to the Commodity Market Analysis System of Business Society, as of May 23, the average market price in East China was 5918 yuan/ton, a decrease of 0.08% from the previous day.

In terms of supply, due to the decrease in PTA production in the early stage, some regions may experience supply tightening, with the industry operating rate around 74%. With the planned restart of the 1.25 million ton PTA plant in South China on May 24th, it is expected that the PTA production capacity operating rate will slightly increase, and overall, the supply of goods will still be abundant.

In the international crude oil market, due to the possible postponement of interest rate cuts and unexpected increase in US oil inventories as shown in Federal Reserve minutes, crude oil prices have been adjusted downwards for multiple trading days. As of May 22, the settlement price of the main contract for US WTI crude oil futures was $77.57 per barrel, and the settlement price of the main contract for Brent crude oil futures was $81.90 per barrel, thus weakening support for PTA costs.

Downstream polyester production started at around 87%. The annual production of 125000 tons of polyester plant is planned to restart next Monday, with no major changes for the time being. Large polyester factories in Jiangsu and Zhejiang have a strong intention to support the market. The domestic demand for terminal textiles is gradually weakening. In April, the retail sales of clothing, shoes and hats, and needle textiles in domestic consumer goods retail reached 104.8 billion yuan, a year-on-year decrease of 2%. However, demand continued to weaken after entering May.

Business Society analysts believe that the unexpected increase in US crude oil inventories and other negative news have led to a continued decline in crude oil prices and weakened cost support, PTA fundamentals are difficult to boost, coupled with the off-season cycle, it is still necessary to pay attention to whether polyester factories will expand their production reduction. Overall, there is a lack of upward driving force, PTA prices may experience weak fluctuations.

Zinc prices have risen three times this week

According to the Commodity Market Analysis System of Shengyishe, as of May 22, the price of zinc was 24578 yuan/ton, a three consecutive increase of 3.99% compared to the zinc price of 23636 yuan/ton on May 19; The zinc price has increased by 5.13% compared to 23378 yuan/ton on May 1st; The zinc price has increased by 13.85% compared to 21588 yuan/ton on January 1st. The average zinc price in 2024 is 21207.20 yuan/ton, with a median of 21938 yuan/ton. This week, zinc prices have risen three times in a row. Currently, zinc prices have reached a new high in 2024 and are at the highest level within a year. The detection positions are at the highest level within a year, the medium high level within two years, and the medium high level within three years. Recently, they have been consistently on the alert for over price increases within a year. The warning of excessive increase in zinc prices continues, increasing the risk of a decline in zinc prices, and the risk of a sharp drop in zinc prices in the future continues to intensify.

Zinc prices continued to rise year-on-year in May

According to the Commodity Market Analysis System of Business Society, since mid April 2024, zinc prices have risen year-on-year for the first time in a year. As of May 22, 2024, the zinc price was 24578 yuan/ton, an increase of 19.42% compared to May 22, 2023, when the zinc price was 20582 yuan/ton. Zinc prices have risen continuously this week, with a sustained year-on-year increase in May 2024. Zinc prices remain high, increasing the risk of decline.

Technical forecast for zinc market this week: It is highly likely to maintain a positive operation

According to the Commodity Market Analysis System of Shengyishe, since April 7, 2024, the 7-day moving average has crossed the 30 day moving average and started an upward trend, but currently the two moving averages are moving in opposite directions. On April 21, 2024, it was estimated that the probability of a change in operating conditions (i.e. a 7-day moving average crossing the 30 day moving average) occurring within the next 7 days is only 7.79%. The probability of zinc prices maintaining a high level is relatively high, and the probability of a significant drop in zinc prices is less than 10%.

Future Market Forecast

According to data analysts from Business Society, zinc prices remained high in May and have continued to rise this week. International zinc market inventories are low, and domestic zinc markets are slowly destocking. Although the international macro environment is somewhat favorable, the supply and demand fundamentals of the zinc market have limited changes, and the support for the increase in zinc prices is insufficient. And zinc prices remain high and continue to rise, intensifying the risk of future decline. Expected zinc prices to fluctuate slightly in the future.

Price trend

Recently, the domestic PA6 market has remained stable and relatively strong, with spot prices fluctuating and rising. According to data monitoring from Business Society, as of May 21st, the domestic benchmark price of PA6 mixture was 14825 yuan/ton, with a price increase or decrease of 1.37% compared to May 1st.

Cause analysis

In terms of raw materials:

Recently, the market price of caprolactam has increased. The price of raw material pure benzene has risen at a high level, coupled with an increase in downstream operating rates, demand is improving. At the same time, some companies had planned maintenance for their caprolactam units, leading to a tightening of market supply. Caprolactam is highly beneficial and provides stronger support for the cost side of PA6.

In terms of supply: Recently, there has been an increase in the load of PA6 production enterprises, with an average operating rate of around 88% and a slight increase in output. The change in inventory position of enterprises is limited. Some manufacturers have low inventory levels. The overall pressure on the supplier is not significant, and the boost to PA6 spot prices is still acceptable.

In terms of demand: Downstream, the current main downstream industries are experiencing high levels of production. The operating rate of spinning remains at 85%, while the weaving load has risen narrowly to over 71%. In the early stage, downstream purchases were in strong demand, and recently some brands have started to be delivered, resulting in a decrease in on-site spot goods. The demand side of PA6 provides sufficient support for spot goods.

Future Market Forecast

The PA6 market has been experiencing strong fluctuations recently. The price of caprolactam continues to rise, providing stronger support for the cost side of PA6. The load of domestic polymerization plants is stable with an increase, and the demand for stocking by terminal enterprises is relatively strong. Overall, the current market demand is strong, and raw materials are strengthening. It is expected that the PA6 market will be slightly stronger and consolidate in the short term.

In mid month, the plasticizer sector continued to consolidate strongly

According to the Commodity Market Analysis System of Shengyishe, the plasticizer sector was at 795 points on May 19th, unchanged from yesterday and up 12 points or 1.53% from the plasticizer sector index of 783 points on May 1st; The plasticizer sector index increased by 9 points, or 1.15%, compared to 786 points on May 10th. In mid May, the index of the plasticizer sector slightly increased, and the index of the plasticizer sector slightly rebounded compared to the previous ten days.

According to the commodity market analysis system of Business Society, the plasticizer sector saw a full increase in products in mid May, but the main plasticizer products did not show a significant upward trend. The growth rate of products such as isooctanol, DBP, and DOTP narrowed slightly, while the plasticizer sector saw a strong consolidation in mid May.

Slight increase in plasticizer products in mid month

According to the commodity market analysis system of Business Society, plasticizer products saw a slight increase in mid month. As of May 20th, the price of DOP was 10037.50 yuan/ton, an increase from the price of 9887.50 yuan/ton on May 11th. In the middle of the month, DOP increased by 1.52%; On May 20th, the price of DOTP was 10087.50 yuan/ton, a slight increase of 0.75% compared to the price of 10012.50 yuan/ton on May 11th; On May 20th, the DBP price was 9475 yuan/ton, a slight increase of 0.53% compared to May 11th when the DBP price was 9425 yuan/ton. The operating rate of plasticizer enterprises is gradually recovering to around 65%, and the supply is gradually increasing. Cost support, rising prices of plasticizer products, increasing supply of plasticizers, macroeconomic policy stimulus, expected rebound in demand for plasticizers, overall support for the rise in plasticizer prices still exists.

The price of isooctanol slightly increased in mid month

According to the Commodity Market Analysis System of Shengyishe, as of May 20th, the price of isooctanol was 9810 yuan/ton, a slight increase of 0.62% compared to the price of isooctanol on May 11th, which was 9750 yuan/ton. The price of octanol products slightly increased in mid month. In early May, the operating rate of octanol enterprises was 98%. In mid to late May, some manufacturers plan to shut down their octanol units for maintenance. The supply of octanol is sufficient, and downstream production can be carried out as needed. In mid to late May, the domestic supply of octanol is expected to decrease, and the operation of plasticizer devices is basically stable and maintains a relatively high level. The octanol market lacks continuous upward momentum, and octanol prices are consolidating at a high level.

Mid month price increase of n-butanol

According to the analysis system of n-butanol commodity market by Business Society, as of May 20th, the quotation for n-butanol was 8133.33 yuan/ton, a slight increase of 2.95% compared to the price of 7900 yuan/ton on May 11th. The overall market for n-butanol in Shandong region has shown a slight increase. Some downstream small areas of n-butanol require replenishment, and the focus of the n-butanol market has slightly increased. In the future, it is expected that the n-butanol market will experience strong consolidation and operation as a whole.

Expected decrease in downstream demand

Due to the increase in planned maintenance enterprises, PVC production has decreased. The operating rate of downstream product enterprises is around 50%, unchanged on a month on month basis and decreasing year-on-year. In the short term, the supply of fundamentals has decreased due to maintenance, while domestic and international demand remains weak, especially in the export market, making it more difficult to accept orders, resulting in weak supply and demand in the PVC market; In the medium to long term, the policy stimulus of PVC market to reduce inventory and quantify inventory is difficult to bring benefits to new construction projects. Real estate transactions boost demand for the building materials market, and spot fundamentals are cautious and cautious. There is not much planned maintenance in June, and new production capacity is planned to be put into operation, resulting in increased supply and poor demand performance, which has a certain drag on the market. The supply and demand in foreign markets are weak due to maintenance and off-season constraints. Overall, the supply and demand of PVC and downstream markets are weak, and the demand for plasticizers remains weak.

Future expectations

Business Society plasticizer product data analysts believe that the plasticizer market saw a slight increase in mid month, mainly due to a decrease in production. Upstream isooctanol enterprises and PVC product enterprises downstream of plasticizers both experienced varying degrees of maintenance and production decline. The overall supply of plasticizers is tight, and downstream production has decreased, leading to an expected decrease in downstream demand for plasticizers. In the future, with the completion of enterprise maintenance, the support for the increase in raw material prices is limited, downstream demand is expected to decrease, and the supply of plasticizers is sufficient. The plasticizer sector is expected to consolidate at a high level in the future.

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.