1、 Trend analysis

According to the monitoring of nickel prices by the Business Society, as of April 19, the average spot market price of nickel was 202033.33 yuan/ton, an increase of 4.46% compared to the previous trading day and a year-on-year decrease of 18.89%. Since the beginning of the new year in February, nickel prices have fallen for a month, and after a month of consolidation at a low level, they finally experienced a phased rebound on April 7th, rebounding 8.76% in just 12 days, breaking the 200000 mark.

Ten year historical price curve of nickel:

According to the price data of the Business Society, the current nickel price is at a relatively high level in 12 years, and has rebounded to the platform level in October 22. There may be some resistance to a rebound in the price here.

April is positive, and nickel fundamentals have improved

1. Sudden earthquake in Indonesia: On April 14th, a 7.1 magnitude earthquake occurred on Java Island, Indonesia, with a depth of 600 kilometers. Indonesian nickel ore products account for about 30% of the world’s nickel production and are the world’s largest nickel supplier. This earthquake event has created a hype point for the nickel market, which has driven a significant rebound in nickel prices due to supply concerns.

2. There is a possibility of delay in the addition of nickel electrowinning projects: since the beginning of the year, a number of new nickel electrowinning projects have emerged in China, with a total production capacity of nearly 200000 tons in the future. The main raw materials are MHP, high nickel matte, and nickel sulfate. However, some projects are planned to be postponed due to economic and environmental issues in the early stages.

3. There is a certain shortage of spot nickel in Russia: due to political conflicts, Russian nickel resources in overseas regions are relatively scarce, and LME inventory has been reduced to below 42000 tons, with the holding inventory ratio reaching its highest level in nearly three years. There is a certain shortage of Russian nickel spot in the overseas market, with Jinchuan and Russian nickel premiums hanging upside down. Recently, with the continuous closure of import windows, the domestic nickel spot market has shown a certain tightness.

4. The transaction price of stainless steel factory procurement has increased compared to before: the improvement in alloy and stainless steel consumption supports nickel prices, and there are news in the secondary market of nickel iron that the transaction price of stainless steel factory centralized procurement has increased compared to before, improving market confidence.

5. Inventory is still at a low level

Previously, the two major peaks in nickel fundamentals, the increase in Russian nickel supply and the addition of new production capacity for electrowinning nickel, both eased in April. With the speculation that the Indonesian earthquake may affect nickel supply and the fact that nickel prices have fallen to lower levels, the situation has rebounded significantly. However, downstream demand remains insufficient.

Comparison Chart of Nickel and Stainless Steel Prices

From the comparison chart of nickel and stainless steel prices in the Business Society, it can be seen that stainless steel is downstream of nickel. Although stainless steel has rebounded due to the influence of raw material nickel, its strength is clearly insufficient. Because the overall demand for stainless steel is weak. In March, steel mills began a centralized production reduction, with a stainless steel production of approximately 2.675 million tons in March, a decrease of 5.41% month on month and 11.62% year on year.

From the perspective of the downstream new energy industry, downstream orders are still weak, with a decrease of 6.33% in the production of ternary precursors and 12.45% in the production of ternary materials. This is mainly due to a decrease in high nickel content, and the negative feedback effect of car company promotions on the upstream raw material end is still ongoing.

In summary, nickel prices have been temporarily stabilized and rebounded due to tight supply expectations. However, with the rise of nickel prices, the profit margin for MHP or nickel sulfate production of electrowinning nickel has recovered. If the electrolytic nickel production line continues to rise significantly in the future, it will accelerate production and suppress nickel. And downstream demand has not really improved, suppressing the upward trend of nickel prices. Nickel prices are expected to be boosted by news and driven by funding, showing short-term improvement, but still being suppressed in the medium to long term.

According to data from Business News Agency, the domestic maleic anhydride market started to rise and then fell in April. As of April 18th, the average market price of n-butane oxidation maleic anhydride remained at 7890.00 yuan/ton, a decrease of 1.16% from April 1st’s price of 7740.00 yuan/ton, and an increase of 0.26% from the same period last month.

On April 18th, the maleic anhydride commodity index was 74.33, unchanged from yesterday, a decrease of 55.34% from the cycle’s highest point of 166.43 points (2021-12-15), and an increase of 45.23% from the lowest point of 51.18 points on April 14th, 2020. (Note: The cycle refers to the period from September 1st, 2011 to the present)

At present, the domestic benzene based maleic anhydride market is gradually starting to operate. Recently, downstream resin manufacturers have increased their prices, and their enthusiasm for replenishing maleic anhydride is average. As of the 18th, the solid anhydride in Shandong region is around 7500 yuan/ton, Jiangsu region is around 7500 yuan/ton, Shanxi region is around 7500 yuan/ton, Hebei region is mainly for self use, and South China region is around 7800 yuan/ton.

On the upstream side, the pure benzene port went to the warehouse in April, and the downstream demand for raw materials was relatively stable, and the market price of pure benzene continued to rise. The factory price of hydrogenated benzene in North China has increased by 2.80%, from 7150 yuan/ton on April 1st to 7350 yuan/ton on April 18th. The market for n-butane fluctuated and rose, with prices in Shandong around 5500 yuan/ton as of April 18th.

The maleic anhydride product analysts of the business community believe that the price of n-butane in the upstream of maleic anhydride rose sharply in April, which supported the market cost of maleic anhydride. The price of downstream resin manufacturers increased, superimposed on the price of resin raw materials. The price of maleic anhydride continued to rise in the first ten days of April. In the middle of April, due to the high price of maleic anhydride market, the downstream market was cautious, purchasing enthusiasm was general, and the market price of maleic anhydride declined. As the May Day holiday approaches and downstream restocking continues, it is expected that the maleic anhydride market will be dominated by consolidation in the near future.

1、 Price data

According to the commodity analysis system of the business community, the price of petroleum coke of the local refiner fell first and then rose this week. On April 16, the average price of Shandong market was 1794.00 yuan/ton, 0.99% higher than the price of 1776.50 yuan/ton on April 10.

On April 16, the petroleum coke commodity index was 139.53, unchanged from yesterday, 65.86% lower than the cycle’s highest point 408.70 (2022-05-11), and 108.60% higher than the lowest point 66.89 on March 28, 2016. (Note: The cycle refers to the period from September 30th, 2012 to the present)

2、 Analysis of influencing factors

This week, the price of refinery petroleum coke rose first and then fell, rising as a whole. The inventory of local refining enterprises was low, downstream enterprises and traders concentrated on stocking up, and local refining petroleum coke market traded well. However, at present, the port petroleum coke inventory is at a long-term high level, which cannot be changed in the short term, and the port petroleum coke delivery and investment is limited.

This week, the international crude oil market fluctuated and rose. On the one hand, on April 2nd, Saudi Arabia, together with several major oil producing countries, announced a voluntary reduction of over 1.6 million barrels per day from May to the end of 2023 outside the OPEC+agreement, which greatly affected the price of crude oil. On the other hand, the pressure on the Federal Reserve to raise interest rates has eased, boosting international oil prices. Data released by the US Department of Labor shows a decrease in US March CPI data, which means that the pace of inflation in the US has slowed down, and the pressure on the Federal Reserve to raise interest rates has eased. Investors expect the Federal Reserve’s interest rate hike cycle to come to an end, which has affected the trend of international oil prices. Finally, the strong demand for crude oil in China has further strengthened the market’s bullish expectations.

The price of calcined coke remained basically stable this week; At present, silicon plants are under great pressure of loss, and the mood of stabilizing is strengthened, and the demand for petroleum coke is weak; Downstream electrolytic aluminum prices have fluctuated and increased, and aluminum carbon enterprises are still able to purchase.

Petroleum coke analysts from the business community believe that the recent low stock of locally refined petroleum coke, the concentration of downstream enterprises and traders to stock up, and the local refining petroleum coke market trading well. However, at present, the port petroleum coke inventory is at a long-term high level, which cannot be changed in the short term, and the port petroleum coke delivery and investment is limited. It is expected that the market of locally refined petroleum coke will rise slightly in the near future.

This week (4.7~4.14), the market for dichloromethane stabilized in a narrow range. As of April 14th, the average price of dichloromethane bulk water in Shandong was 2637 yuan/ton, a decrease of 0.09% from last Friday’s 2640 yuan/ton. The high point of the cycle was 2652 yuan/ton, and the low point was 2607 yuan/ton. The low price of raw material methanol rebounded slightly, while the cost support for dichloromethane remained weak; Downstream refrigerant R32 just needs support for the procurement of dichloromethane during the peak season, and the pharmaceutical and solvent industries are operating steadily, with demand support for dichloromethane. However, the supply of methane chloride is loose, and the recent market volatility and consolidation of dichloromethane are the main factors.

This week (4.7~4.14), the low price of raw material methanol rebounded slightly, while the downward trend in the cost of trichloromethane remained weak. According to Business News, as of April 14th, the spot price of methanol was 2471 yuan/ton, an increase of 1.02% from last Friday’s 2446 yuan/ton.

With the arrival of the traditional peak season, the market price of refrigerant R 32 is firm and the commencement is stable, which has certain support for dichloromethane. The pharmaceutical intermediates and diluents solvent industry has been operating steadily, with just the necessary support for dichloromethane

Future Market Forecast: Analysts from Business Society’s Methane Chloride Data believe that the downstream of dichloromethane just needs support, but the methane chloride industry is still at a high level with loose supply and weak cost support. Due to the fundamental game of the industrial chain, it is expected that the dichloromethane market will narrow and consolidate in the short term.

On April 6th, Sinopec North China raised its listing price by 200 yuan per ton to execute a 6400 yuan/ton increase. The overhaul of the Yanshan Petrochemical plant is imminent, and the operating rate of domestic phenolic ketone plants is declining. In April, as the plant overhaul season enters, it is expected that the domestic supply of goods will decline. Moreover, at the beginning of the month, supported by the rising cost of crude oil, the reluctance to sell among cargo holders has increased, and the market is rapidly rising. It is expected that there will still be upward momentum tomorrow.

The acetone offers in major mainstream markets across China on April 6th are as follows:

Region/ Quotation/ Fluctuation range

East China region/ 6300./ 150

Shandong region/ 6400./ 100

Yanshan region/ 6450./ 150

South China region/ 6600./ 150

According to the data from the Commodity Analysis System of Business Society, the PP (wire drawing) market in the first quarter of 2023 began to fluctuate at an average price of 7858.33 yuan/ton at the beginning of the year. After the market weakened and fell before the Spring Festival holiday, and the supply and demand double increase prices rebounded after the holiday, the current average price at the end of March was 7825.71 tons. In the first quarter, the PP price fell by 0.42%, with a maximum amplitude of only 3.12%. The overall trend tends to fluctuate within a narrow range.

PP market trend in the first quarter of 2023:

After a decline in January, it rebounded: According to the monitoring of Business Society, PP wire drawing materials entered the pre holiday market on January 4th, and market participants gradually decreased. The price began to decline from 7875 yuan/ton, and as of January 11th, it reached a quarterly low of 7700 yuan/ton, with a range drop of 2.22%. Afterwards, it bottomed out and rebounded, with prices slightly recovering. After the holiday, the cash flow situation of just needed support is solid, and in addition, the raw material propylene is affected by the stocking peak before the holiday. The transaction atmosphere is good, and the price is pushing up, which is beneficial for the rapid recovery of the PP market.

Deadlocked operation in February: The price of PP wire drawing material fluctuated narrowly around the price position at the beginning of the month, resulting in a stalemate operation. According to monitoring by Business Society, the average price at the beginning of the month is 7966.67 yuan/ton, while the average price at the end of the month is 7925 yuan/ton, with a range decrease of 0.52% and a maximum amplitude of 1.76%. At this stage, the industry’s load has been significantly affected by the decline in corporate profitability, leading to a decline in high levels. However, the overall downward adjustment in the industry is limited, and the overall supply of goods is mainly abundant. The supply pressure within the month has increased instead of decreasing. The supplier’s inventory removal operation continues, and the factory price has been reduced. Meanwhile, in February, the resumption of work for downstream PP enterprises in China was slow, with the main downstream plastic weaving enterprises operating at less than 40%, and the stocking situation of terminal enterprises was not as expected, with on-demand procurement being the main focus. The market supply and demand game continues, coupled with the upstream propylene market rising and falling twice within the month, which provides general support for the PP cost side. In February, the PP price fluctuated narrowly and remained largely stagnant.

March’s volatility and decline: According to monitoring by Business Society, the first half of March followed the stalemate of last month’s market, with the decline concentrated in the second half of the month. As of March 31st, the price of PP wire drawing material was 7825.71 yuan/ton, a decrease of 1.25% from the 7925 yuan/ton at the beginning of the month. During the month, there were limited changes in the operating conditions of enterprises, with an overall stability of around 80%. Supply was stable, and the impact of industry capacity release gradually became apparent, leading to an increase in supply pressure. In terms of demand, the operating rates of downstream plastic weaving and film materials enterprises are fluctuating, and the stocking situation of terminal enterprises is average, with on-demand procurement being the main focus. The raw material propylene market has been fluctuating and declining throughout the month. Real orders are mainly traded at high and low levels, with overall poor support for PP. The main negative impact of the industrial chain lies in the low oil price, which hinders the continuous weak operation of the PP market.

Overall, the main factors affecting the PP market in the first quarter of 2023 include the following:

New devices are gradually being shipped, and the industry’s production capacity continues to expand and upgrade

In recent years, China’s polypropylene industry has been in a continuous period of expansion and capacity expansion. Since 2018, the average annual production capacity growth rate in China has been 10.27%. According to Business News Agency, except for some enterprises delaying production until 2023, the total new production capacity of domestic PP in 2022 is about 3 million tons. The significant increase in supplier pressure this quarter, coupled with an estimated 2.2 million tons of production capacity to be put into production in the second quarter, has led to a generally bearish outlook for the future.

In terms of operating rate, the operating rate of domestic polypropylene enterprises in the first quarter was generally high and stable, with narrow fluctuations in industry load around 80%. The total quarterly production is about 7.675 million tons, with stable production and abundant market supply. Excluding the Spring Festival holiday, the production remained basically unchanged compared to the previous quarter. The continuous easing of supply, coupled with the accelerated expansion of production capacity, has combined to affect supply pressure this quarter, resulting in weak pricing and operation of enterprises.

Downstream enterprises follow up cautiously and demand side consumption growth lags behind

In the first quarter of China, polypropylene consumption was generally weak and volatile. The slow resumption of work in various downstream industries of polypropylene after the Spring Festival holiday, coupled with weak fluctuations in international crude oil, highlights the phenomenon of high cost pressure and low profits for enterprises, which restricts their order situation. At the same time, the impact of imported inflation has affected PP terminal enterprises, and the demand for stocking is generally cautious, with PP consumption declining particularly significantly in February. Faced with the rapid expansion of polypropylene production capacity, its consumption situation is relatively lagging, dragging the spot price trend.

Poor cost support for raw material propylene after increasing and suppressing polypropylene

According to the monitoring of Business Society, as of March 31, the average spot price of propylene in China was 7096 yuan/ton, a decrease of 1.46% from the 7244 yuan/ton at the beginning of the year. During the quarter, the early stocking tide drove demand, downstream low level restocking, and upstream inventory was controllable. But demand was suppressed in the second half of the quarter, and prices quickly fell. The combination of weak fluctuations in raw material prices has led to unstable profitability in the industrial chain. The competition in the propylene market was fierce in the first quarter, and the current market has returned to fundamentals, with limited support for PP costs.

Future forecast: Polypropylene analysts from Business Society believe that the PP industry will continue to expand in the first quarter of 2023, and the impact of new production line discharge has not yet reached its peak, making it difficult to keep up with the growth rate of terminal demand for the time being. The mismatch between production and sales will continue to affect the PP market, and supply side pressure may become long-term. In addition, the international inflationary economic environment has dragged down the profitability of petrochemical enterprises. The overall support for PP on the cost side is not strong, and the market is positioned in a supply-demand game. Taking into account the influencing factors, the market momentum of various products in the PP industry chain was average in the first quarter, with price fluctuations leading to a decline. Starting from April, the release of liquidity funds by the central bank may benefit the PP market from a policy perspective, but the business community believes that in the long run, the mismatch between supply and demand in the market will still be the main pattern, and the PP market may not be able to rise significantly due to this.

According to monitoring by the Business Society, the price of polyester staple fibers has maintained an upward trend since April, with an average ex factory price of 7876 yuan/ton on April 3rd, an increase of 4.65% compared to the previous day.

On April 2, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) suddenly announced a significant production reduction, which is estimated to exceed 1 million barrels per day. Affected by this news, the Asian session of national crude oil saw a significant increase. As of 9:00 am Beijing time on the 3rd, Brent crude oil futures prices reached a maximum of $86.44 per barrel, while WTI crude oil futures prices rose as high as $81.69 per barrel. Meanwhile, as the domestic PX maintenance season approaches, supply is expected to be tight, and PTA continues to show a strong trend. Driven by cost benefits, the price of polyester staple fibers has increased significantly.

Under the influence of the mentality of buying up rather than buying down, it has triggered downstream speculative stocking, leading to a slight decline in short fiber finished product inventory. At present, the operating rate of pure polyester yarn enterprises is at a high level, but the lack of orders is relatively light. Manufacturers mainly produce domestic orders, and there has been no substantial improvement in the foreign market. The inventory of finished products in yarn factories continues to accumulate, and most of them maintain a cautious and on-demand procurement model for raw materials and short fibers.

Analysts from Business Society expect to continue to be supported by costs in the short term, and the price of polyester staple fibers will remain relatively high.

Price trend

The recent domestic PA66 market trend is sideways. According to data monitoring by the Business News Agency, on April 2, the average ex-factory price of domestic PA66 was 20333.33 yuan/ton, a decrease of – 3.17% compared to the price level at the beginning of March.

Cause analysis

This week, the market for PA66 was stable, with limited changes in spot prices. On the supply side, the overall load of the domestic PA66 industry is currently around 67%, almost unchanged from last week. Enterprise operations continue to be biased towards destocking, with general inventory pressure and relatively abundant on-site supply. On the upstream side, the raw material hexamethylene diamine fluctuated in a narrow range, while pure benzene in adipic acid stopped falling and warmed up supporting costs. However, the load of adipic acid was on the high side before, and the market continued to decline under pressure. PA66 raw material side has poor support for spot goods. In terms of demand, the situation is stable and weak, and terminal enterprises just need to follow up on their purchases. Buyers generally have strong resistance to high-priced sources of goods. It is expected that PA66 may continue to consolidate the market in the short term.

Aftermarket Forecast

This week, the spot price of PA66 was stable. The raw material market is relatively soft, weakening the support for PA66 cost side. PA66 enterprise load is horizontal, and the overall inventory position is average. The demand side takes goods to maintain production, and it is expected that PA66 will continue to operate horizontally in the short term.

Data monitoring shows that on March 30, the polyaluminum chloride commodity index stood at 101.49, unchanged from yesterday, down 28.85% from the cycle’s highest point of 142.64 (2021-11-01), and up 20.36% from the lowest point of 84.32 on August 18, 2020. (Note: The cycle refers to 2019-04-01 to now)

According to monitoring data, the market price of solid (industrial grade, content ≥ 28%) polyaluminum chloride in China was basically stable at around 1877.5 yuan/ton during the week of March 27-30. Currently, some water treatment enterprises in China’s main production areas have basically resumed production due to environmental shutdown, with normal production in local factories, relatively abundant inventory in stock, and little change in downstream procurement demand. This week, the cost of raw material hydrochloric acid was stable, and fuel prices rebounded slightly. The mainstream market for polyaluminum chloride remained stable during the week, with occasional slight price increases for enterprises.

Raw hydrochloric acid: According to monitoring data from the Business News Agency, the domestic market price of hydrochloric acid for the week from March 27-30 was basically maintained at around 198 yuan/ton. The upstream liquid chlorine market has a downward trend this week, with weaker cost support and a general willingness to purchase downstream. The analysis indicates that hydrochloric acid has insufficient support in the near future, or has mainly declined slightly.

Liquefied natural gas for production. According to data from Business News Agency, domestic LNG prices rebounded during the week of March 27-30. As of March 30, the average price of liquefied natural gas in China was 4344 yuan/ton, up 3.08% from the average price of 4214 yuan/ton on March 27.

Future market forecast: This week, the raw material market is stable, and fuel costs have rebounded slightly. Given that the production of polyaluminum chloride manufacturers is normal, there is sufficient inventory in stock, and there is little change in downstream demand, traders in the market expect that the future market of polyaluminum chloride may have a slight increase. Due to the tepidity of the demand side, the probability will still be mainly stable, supplemented by minor adjustments..

Aluminum price stops falling and stabilizes

According to data from Business News Agency, on March 29, 2023, the average price of domestic aluminum ingots in the East China market was 18603.33 yuan/ton, which was basically unchanged compared to the previous trading day, and the aluminum price was 18416.67 yuan/ton at the beginning of the month (March 1), up 1.01%. After recovering in January, aluminum prices fell in mid February. After the Federal Reserve raised interest rates in March, aluminum prices stopped falling and stabilized.

In the long term, the current price has retreated significantly, increasing by 6.61% compared to the recent recovery starting point (July 14, 2022), where the average market price of aluminum ingots was 17450 yuan/ton. The recent high aluminum price occurred on December 5th, with the average aluminum ingot market price of 19536.67 yuan/ton, a decrease of 4.78%.

Overview of fundamentals

In the early stage, the macro repression brought about by European and American banking industry eased, with nonferrous metals taking the lead in recovering, and aluminum prices stabilizing. At present, the overall transaction in the East China market has improved, and the circulation between traders is positive, and the transaction is fair; The aluminum price in Gongyi region is strong, and the willingness to receive goods from downstream is not strong, resulting in a strong wait-and-see mood; The spot downstream consumption in South China has rebounded, and the demand for replenishment has increased. The overall transaction is fair.

Aftermarket forecast

From the supply side, the output in March was not low, and according to inventory data, the social inventory of electrolytic aluminum is still relatively high, but there is a trend of destocking, and inventory destocking is slowing down. In the short term, electrolytic aluminum will be suppressed and alleviated by macro factors. It is expected that the aluminum price will stop falling and stabilize, and the probability of a sideways trend in the aluminum price will increase. In the near future, it is expected to wait and see the strength of downstream consumption.