1、 Price trend

According to the commodity market analysis system of the business community, as of August 4, the reference average price of 85% thermal phosphoric acid in China was 6650 yuan/ton, which was 0.15% higher than the reference average price of 6640 yuan/ton on July 31.

According to the Commodity Market Analysis System of the Business Society, as of August 4th, the reference average price of 85% wet process phosphoric acid in China was 6433 yuan/ton, which is lower than the reference average price of 6433 yuan/ton on July 31st. The domestic wet process phosphoric acid price remained stable this week.

2、 Market analysis

The market price of thermal phosphoric acid has slightly increased this week. The price of raw material yellow phosphorus has increased, and cost support is positive. However, downstream demand is not performing well, with primary demand for restocking and average market transactions. As of August 4, the ex factory quotation of 85% thermal phosphoric acid in Yunnan was about 6700 yuan/ton, and that of 85% thermal phosphoric acid in Hubei was about 6750-6800 yuan/ton. The domestic market quotation for 85% wet process phosphoric acid is around 5700-7300 yuan/ton.

In terms of raw material yellow phosphorus, the price center of the Yungui yellow phosphorus market has been upward this week. At present, the overall market trading situation of yellow phosphorus is relatively good. The spot market of yellow phosphorus is tight, and the transaction price of new orders is stable and strong. Manufacturers mainly place early orders, but there is not much inventory on the market, which is difficult to sell at low prices, resulting in a relatively stagnant supply and demand. The enterprise will not provide external quotations for the time being, and will discuss the actual order in detail. As of now, the quotation is around 24200-24000 yuan/ton, and the actual transaction is subject to negotiation.

3、 Future Market Forecast

Phosphoric acid analysts from Business Society believe that the price of phosphoric acid has been fluctuating recently. Although cost side support is positive, terminal demand is weak, with downstream cautious wait-and-see as the main focus, and limited room for phosphoric acid growth. It is expected that in the short term, the price of phosphoric acid in the market will narrow down and may rise with the increase of raw materials.

According to the Commodity Market Analysis System of the Business Society, the asphalt market will be sorted out after the market price rises. From July 27th to August 3rd, the price of asphalt in Shandong fell from 3854 yuan/ton to 3802 yuan/ton, a decrease of 1.34%, a month on month increase of 1.06%, and a year-on-year decrease of 13.05%. Affected by the decline in international crude oil, cost support has weakened, and the supply side has remained stable while increasing. At the same time, weather factors have affected an increase in precipitation in some regions of China, resulting in slightly flat demand.

In terms of supply, the main production enterprises include Wusu Mingyuan and Tianzhize resuming production, Shandong Haiyou resuming production, as well as Qilu Petrochemical and Dongming Petrochemical’s normal production, Ningbo Keyuan resuming production, and Yunnan Petrochemical’s intermittent production, which have driven an increase in the operating rate of devices in the region. The comprehensive operating rate of the asphalt industry has increased month on month, with negative impacts on the supply side.

On the cost side, in terms of crude oil: As of August 2nd, international crude oil futures have slightly declined. The settlement price of the main contract for WTI crude oil futures in the United States was $79.49 per barrel, a decrease of $1.88 or 2.3%. The settlement price of the main contract for Brent crude oil futures was $83.20 per barrel, a decrease of $1.71 or 2.0%. Fitch’s downgrade of the US credit rating has caused turmoil in the financial market, and risk aversion has led to a decline in the oil market.

On the demand side, the demand of asphalt market is relatively flat, and the demand varies from region to region. Rainfall weather may increase in some northern regions in the future, especially in Heilongjiang, Jilin and other places where there will be rainstorm or heavy rainstorm, accompanied by thunderstorms, gales, hail and other strong convection weather, which will affect the construction process of downstream terminals. However, the overall demand in the south has improved, and the phased demand may be strong in the south and weak in the north. The demand side of the asphalt market has a relatively stable impact.

As of the close of August 3rd, the petroleum asphalt futures market has declined. The main asphalt contract 2310 was opened at 3754 yuan/ton, with a maximum price of 3758 yuan/ton and a minimum price of 3690 yuan/ton. It closed at 3754 yuan/ton, a decrease of 55% or 1.46% compared to the previous trading day. The trading volume was 309091 lots, the holding volume was 228235 lots, and the daily increase was -21130 lots.

In the future, it is predicted that the international high crude oil level will weaken its support for asphalt, while the supply side will maintain stability and increase, with slight differences in demand among regions. Business Society asphalt analysts expect that the short-term domestic asphalt market situation will be mainly sorted out.

According to the commodity market analysis system of the Business Society, the spot price of styrene in Shandong fluctuated and increased in July. At the beginning of the month, the spot price of styrene in Shandong was 7163.33 yuan/ton, and at the end of the month, the spot price of styrene in Shandong was 8200.00 yuan/ton, an increase of 14.47%. The price has decreased by 15.84% compared to the same period last year.

styrene

The styrene market price fluctuated and increased in July. From the above chart, it can be seen that the price of styrene mainly fell in May and June, but this month’s price rebounded with a significant increase. The main reason for the increase is that the international crude oil price fluctuates higher, driving the pure benzene market to continue to rise, with strong cost support, small increase in downstream construction, increased spot transactions, more favorable styrene, and rising market.

In terms of raw materials, the price of pure benzene slightly increased in July, with prices gradually increasing. On July 1st, the price was 6183 yuan/ton; On July 31st, the price was at 7265 yuan/ton, an increase of 17.49% compared to the beginning of the month and a decrease of 18.29% compared to the same period last year. 1. Crude oil rose broadly. 2. The Asian American arbitrage window has closed, and the domestic price of pure benzene in China is high, resulting in a high import volume of pure benzene in July. And the overall supply of pure benzene in the market is sufficient. The fundamentals are showing an upward trend in the short term, with sufficient supply on the market. Pure benzene may continue to rise in the short term, and we are waiting to see if the cost and demand sides can improve. Continue to pay attention to the trend of crude oil and external markets, as well as the impact of the dynamics of pure benzene and downstream devices, and changes in demand on the price of pure benzene.

On the downstream side, the three major downstream markets of styrene saw mixed fluctuations in July. According to the Commodity Market Analysis System of the Business Society, the average quotation for PS at the beginning of this month was 9200 yuan/ton, and the average price for PS at the end of the month was 9100 yuan/ton. The price decreased slightly by 1.07%, a decrease of 19.12% compared to the same period last year. The pace of merchant shipments is slow, downstream demand is poor, and the PS market has slightly declined.

According to the Commodity Market Analysis System of the Business Society, the price of EPS ordinary materials fluctuated and increased in July. At the beginning of the month, the average quotation of EPS ordinary materials was 9350.00 yuan/ton, and at the end of the month, the average price of EPS ordinary materials was 9475.00 yuan/ton, with a price increase of 1.29%. In July, domestic EPS prices were supported by costs, and it is expected that the domestic EPS market will mainly show a narrow range upward trend.

In July, the domestic ABS market declined, and spot prices were often reduced. According to the Commodity Market Analysis System of the Business Society, as of July 28th, the average price of ABS sample products was 10500 yuan/ton, an increase or decrease of -0.24% compared to the average price level at the beginning of the month. Recently, the three upstream materials of ABS have seen mixed ups and downs, providing average support for the cost side of ABS. The construction of petrochemical plants has increased compared to the previous period, and market inventory has also increased simultaneously. The demand side support has fallen, and the overall weak and rigid demand pattern has been maintained. It is expected that the ABS market may continue to be weak.

At present, international oil prices continue to rise, with strong cost support. At the end of the month, the market is seeking bargains to replenish the increment, and the styrene industry has a good mentality. It is expected that the short-term volatility and rise in the styrene market will be the main trend.

Zinc prices continue to rise in July

According to the Commodity Market Analysis System of the Business Society, as of July 31, the zinc price was 20898 yuan/ton, an increase of 3.42% compared to the fluctuating zinc price of 20206 yuan/ton on July 1. The macroeconomic recovery in July was positive for the non-ferrous metal market, and zinc prices fluctuated and rose in July.

Zinc prices have risen for two consecutive months

According to the Commodity Market Analysis System of the Business Society, zinc prices rose slightly in July, an increase of 3.42%, with zinc prices rising for two consecutive months. Since the trend of continuous decline in zinc prices in the first half of the year was reversed in June and rebounded, zinc prices have maintained an upward trend in July, with a slight increase. The economy has rebounded, the non-ferrous sector has rebounded, and zinc prices have followed suit.

China Manufacturing Purchasing Managers’Index

According to the data released by the National Bureau of Statistics, in July, the Purchasing Managers’Index (PMI) of the manufacturing industry was 49.3%, up 0.3 percentage points from the previous month. PMI rose for two consecutive months, and the prosperity level of the manufacturing industry continued to improve. Although the PMI was still below 50% in July, it has slightly rebounded for two consecutive months, and the overall level of domestic manufacturing prosperity continues to improve. The domestic macro economy has rebounded, and the zinc market is favorable.

Long Short Game in Zinc Market

The June US CPI announced in July only increased by 3% year-on-year, lower than the market estimate of 3.1%. The CPI data has fallen beyond expectations, and Wall Street generally expects the Federal Reserve to restart the pace of rate hikes. However, it is also expected that the Federal Reserve’s rate hike in July may be the last rate hike of the year. The non-ferrous metal market is relatively strong, China’s strong policies are gradually implemented, the expectation of macroeconomic recovery is strengthened, and the zinc market is bullish.

7. In August, some smelters on the supply side will enter the maintenance period, which may lead to a significant reduction in supply. Zinc smelting processing costs will increase, and the decrease in zinc smelting production will be limited. At the same time, imported zinc will also provide a certain supplement to the supply side. The supply side of the zinc market may remain relatively loose, and the LME market’s zinc ingot inventory will skyrocket in July. The zinc market has sufficient supply, and the overall supply of zinc in the market exceeds demand. The bearish pressure of the zinc market still exists.

Future Market Forecast

Data analysts from Business Society believe that in the international market, the US interest rate hike may come to an end, while in the domestic market, strong support policies have been implemented, macroeconomic sentiment has improved, and non-ferrous metals have generally risen in July. The macroeconomic recovery is beneficial for the zinc market; However, zinc processing fees have increased, LME zinc ingot inventory has surged, and the zinc market is oversupplied. The downward pressure on the zinc market still exists. In the future, strong supply still exists, weak demand improves, and there are risks of rising and falling in the zinc market. It is expected that the zinc price will fluctuate and consolidate strongly in the future.

Precious metals rose first and then fell in July

In July, the price of precious metal gold rose first and then fell, indicating an overall upward trend. According to the commodity market analysis system of the business community, the price of gold in the Spot market will be 456.44/g on July 31, 2023, with a monthly drop of 1.75%; Compared with the peak price of this month (July 20), the gold Spot market price was 461.30 yuan/g, down 1.05%.

Silver fell back to the beginning of the month

According to the commodity market analysis system of the business community, the average silver market price will be 5736.67 yuan/kg on July 31, 2023, up 5.60% month on month, down 3.17% from the peak of this month (July 20), which is 5924.33 yuan/kg.

Summary of Price Trends of Precious Metals and Crude Oil

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

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

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

Policy Fundamentals Data

In July, the overall decline of bulk commodities stabilized and rose. In addition to the unexpected decline of the US CPI in July, the market once again expected that the process of the Federal Reserve’s interest rate increase would come to an end, and the U.S. Dollar Index once fell below the 100 threshold; However, in the second quarter of the United States, real GDP grew at an annualized rate of 2.4% month on month, and the tight economic growth and employment conditions pushed up the US dollar exchange rate and US bond interest rates, weakening the momentum of gold’s rebound.

The Federal Reserve Board of Governors of the United States ended its two-day monetary policy meeting on the 26th and announced that it would raise the target range of the Federal funds rate by 25 basis points to between 5.25% and 5.5%. This is the 11th rate hike by the Federal Reserve since entering the current rate hike cycle in March 2022, with a cumulative rate hike of 525 basis points. After the monetary policy meeting in June 2023, the Federal Reserve announced a pause in interest rate hikes. Interest rate hikes have suppressed interest free asset prices, which is also the main reason why precious metal prices have moved down from their high points before and after interest rate hikes.

Future Market Forecast

At present, the price of precious metals has been fluctuating in the high range after hitting a 10-year high in the early stage. In the early stage, we expected that under the high inflation and high interest rate hikes, the pace of overseas economic recession may lead to a relatively strong sense of risk aversion, which is currently reflected in prices. Some central banks around the world increased their holdings of Gold reserve, which also formed some support for gold prices.

Silver rose significantly in July, and its price was overestimated by fundamentals, leading to profit taking in funds. In addition, the Federal Reserve raised interest rates by 25 basis points in July and stated that there was no interest rate cut within the year, breaking previous optimistic expectations. In the short term, precious metals have been volatile and bearish after recent highs.

The domestic acetic acid market is in a weak downward trend, with price trends continuing to decline, raw material prices rising, acetic acid profits decreasing, stable operation of on-site acetic acid enterprises, sufficient market supply, low downstream operating rate on the demand side, insufficient follow-up on market procurement, slow shipment of acetic acid, increased inventory of manufacturers, pessimistic mentality among operators, continuous downward movement of acetic acid prices, and weak market operation.

According to the commodity market analysis system of the business community, as of July 28, the average price of acetic acid in East China was 3100 yuan/ton, down 3.12% from the price of 3200 yuan/ton on July 22, up 7.51% from the beginning of the month. As of July 28th, the market prices of acetic acid in various regions during the week were as follows:

The upstream raw material methanol market continues to rise. As of July 28th, the average price in the domestic market was 2281.67 yuan/ton, an overall increase of 2.56% compared to the price of 2224.17 yuan/ton on July 22nd. The cost support is stable, with a narrow increase in downstream equipment operation, an increase in replenishment demand, a positive demand side, and an increase in methanol prices.

The downstream acetic anhydride market continues to decline. As of July 28th, the factory price of acetic anhydride was 5087.50 yuan/ton, a decrease of 1.93% compared to the price of 5187.50 yuan/ton on July 22nd. The price of upstream acetic acid has decreased, and the cost support for acetic anhydride is insufficient. Acetic anhydride enterprises have resumed operations, and the market supply is sufficient. Downstream demand has not followed up enough. Market trading is average, and the price of acetic anhydride has declined.

In the future market forecast, acetic acid analysts from Business Society believe that the operation of acetic acid plants is stable, the market supply is sufficient, the demand side operating rate is low, acetic acid manufacturers’ shipments are not smooth, and downstream support is not weak. Under the supply and demand game, it is expected that the acetic acid market will operate weakly in the future.

Overview of Boric Acid Market

According to the Commodity Market Analysis System of the Business Society, the price of boric acid fell first and then rose in July, causing sideways fluctuations. As of July 27th, the average price of boric acid in the domestic market was 7387.5 yuan/ton, an increase of 0.34% compared to the beginning of the month, but a decrease of 8.80% compared to the beginning of the year at 8100 yuan/ton.

At present, the external quotation for imported goods is concentrated at 7000-8200 yuan/ton (the actual transaction price of different brands, specifications, and products is mainly negotiated). According to the Commodity Market Analysis System of Business Society, the average market price of imported boric acid is 7590.91 yuan/ton, a decrease of 0.48% compared to the average market price at the beginning of the month.

Business Society Boric Acid Analysts believe that boric acid is gradually entering the long short game stage, with prices mainly fluctuating sideways.

According to the commodity market analysis system of the business community, the domestic PTA market, after a brief decline, has recently shown a slight upward trend. As of July 26, the average price of Spot market in East China was 5916 yuan/ton, up 0.58% from July 18.

At present, there is still some support for costs. Saudi Arabia and Russia have further pushed for production cuts, supply tightening expectations remain unchanged, and US gasoline demand has rebounded, causing international crude oil prices to continue to rise. As of July 25th, the settlement price of the main contract for WTI crude oil futures in the United States was $79.63 per barrel, while the settlement price of the main contract for Brent crude oil futures was $83.25 per barrel. PX oscillates strongly with crude oil, and is in a cumulative inventory cycle. The domestic PX operating load is low, but the landing of new PTA production capacity on the demand side drives the release of new points. The contradiction between PX supply and demand has not yet been highlighted.

From the recent changes in PTA’s own devices, restart and maintenance coexist, and the overall load has increased. Currently, the industry’s operating rate is around 80%. In addition, the 2.5 million ton new project of Hengli Petrochemical in Huizhou is gradually being mass-produced, and the supply side has increased.

In terms of downstream demand, polyester overall maintains a high starting point of over 90%. As raw materials rise, the cash flow pressure of polyester factories increases, and inventory pressure has increased, with short fiber inventory at a high level. The operating rate of weaving machines in Jiangsu and Zhejiang provinces has slightly decreased to below 65%, and the high operating rate of weaving machines has dropped back. Therefore, the start of weaving machines in Jiangsu and Zhejiang continued to decline, with increasing pressure on polyester inventory and cash flow, a decrease in polyester load, and some negative feedback from the terminal.

Analysts from Business Society believe that in the short term, the cost side is still positive, while crude oil and PX are still relatively strong. However, the pressure on PTA supply and demand is gradually emerging, with device restarts, more load increases, and the release of new production capacity, PTA supply will be further relaxed. In addition, during the off-season of terminal demand, downstream polyester cash flow and inventory pressure increase. Under the game of strong costs and weak supply and demand, PTA prices will mainly fluctuate and adjust in the future.

Zinc prices have improved and increased this week

According to the Commodity Market Analysis System of the Business Society, as of July 25th, the zinc price was 20442 yuan/ton, an increase of 0.74% compared to the fluctuating zinc price of 20292 yuan/ton on July 19th. This week, the non-ferrous metal sector experienced a volatile and upward trend, which is beneficial for the metal zinc market. Zinc prices have experienced a volatile and upward trend this week.

Non ferrous metal sector up

According to the commodity market analysis system of the business community, the nonferrous metal index on July 25 was 1112 points, up 2 points from yesterday, down 27.70% from the cycle’s highest point of 1538 points (2021-10-18), and up 83.20% from the lowest point of 607 points on November 24, 2015 (note: the cycle refers to 2011-12-01 to now). China’s strong policies are gradually being implemented, and expectations of macroeconomic recovery are increasing. Wall Street generally expects the Federal Reserve to restart the pace of interest rate hikes, but at the same time, it is expected that the Federal Reserve’s rate hike in July may be the last rate hike of the year, leading to a rise in London’s non-ferrous metals. This week, the non-ferrous metal sector saw a general rise, with macroeconomic benefits and a rebound in the zinc market.

Future Market Forecast

Data analysts from Business Society believe that China’s strong support policy has been implemented, the US interest rate hike may come to an end, macroeconomic sentiment will improve, and non-ferrous metals will generally rise. In the future, strong supply still exists, weak demand may improve, and it is expected that zinc prices will fluctuate and consolidate in the future.

According to monitoring data from Business Society, starting from July 10th, there were positive factors supporting the tightening of supply and a significant increase in the market. On July 24th, the average market price of hydrogen peroxide was 1200 yuan/ton. On July 10th, the average market price of hydrogen peroxide was 960 yuan/ton, with a price increase of 25%.

Lido Supports the Rise of Hydrogen Peroxide Market

Since July 10th, some hydrogen peroxide manufacturers have not yet started up, and the supply of hydrogen peroxide in the market is tightening. Hydrogen peroxide manufacturers are mainly overpriced, and the market continues to operate at a high level. The mainstream quotation of hydrogen peroxide manufacturers in Shandong region is 1250 yuan/ton, while the mainstream quotation of hydrogen peroxide manufacturers in Hebei region is 1150 yuan/ton. The mainstream quotation of hydrogen peroxide manufacturers in Anhui region is 1250 yuan/ton, with an increase of about 200 yuan/ton. The market is accelerating and transactions are good.

Li Bing, a chemical analyst at Business Society, believes that the supply gap is still there and the future market for hydrogen peroxide will remain high.