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.

According to the Commodity Market Analysis System of Business Society, the domestic spandex market has temporarily stabilized this week (July 17-22), with an average price of 33500 yuan/ton in the 40D market as of July 22, which is unchanged from the beginning of the week. The current raw material prices are still at a high level, and the spandex industry is experiencing losses. The operating rate remains low. As of July 20, 2023, the overall industry operating rate of the domestic spandex industry is around 72%.

The focus of the raw material pure MDI market is relatively strong, and there are few spot goods in the market. Additionally, factories have plans to continue reducing production, which limits their ability to add new orders, and their cost support continues to strengthen. The overall operating rate of the PTMEG industry is around 72%. The load of two 46000 ton/year PTMEG units of Sinopec Great Wall Energy and Chemical in Ningxia is around 90%, and the load of two 30000 ton/year PTMEG units of Henan Energy and Chemical is around 60%. The mainstream factory’s 1800 molecular weight quotation is around 19500, and some factories do not provide external quotations.

Recently, terminal inventory has gradually accumulated, and with the high temperature in summer and off-season factors, the workload of most downstream weaving factories is relatively low. Currently, there is no substantial improvement in both domestic and export sales of the terminal, and there may be further room for decline in construction.

Analysts from Business Society believe that the current cost side support is acceptable, but the actual demand side is bearish, with poor market trading enthusiasm and average enthusiasm for raw material stocking. Under low demand and rising cost pressures, it is expected that the spandex market price will remain mainly on a wait-and-see basis in the short term.

Zinc price range fluctuated and consolidated in mid July

According to the Commodity Market Analysis System of the Business Society, as of July 19th, the zinc price was 20292 yuan/ton, a decrease of 0.27% compared to the fluctuating zinc price of 20346 yuan/ton on July 9th. There is no upward support for the fundamentals of the zinc market, and the zinc price range fluctuated and consolidated in mid July.

Long Short Game in Zinc Market

The US CPI for June, announced in July, only increased by 3% year-on-year, lower than the market estimate of 3.1%. The unexpected decline in CPI data has led to a decline in the Federal Reserve’s expectation of aggressive interest rate hikes. As of July 13, the U.S. Dollar Index had fallen for six consecutive trading days. The U.S. Dollar Index fell, and the non-ferrous metal market was strong.

Before the Federal Reserve’s interest rate hike in July came to fruition, macroeconomic sentiment in the market was fluctuating. Traders believed that July would see a 25 basis point interest rate hike as scheduled, while the US dollar raised interest rates, weakening the non-ferrous metal market. On July 18th, LME zinc inventory increased by over 10000 tons, and LME zinc inventory increased to 80375 tons, breaking a new high since the end of June. The spot circulation is relatively loose, coupled with the continued impact of imported sources of goods. In July and August, some smelters on the supply side will enter the maintenance period, which may bring about significant supply reductions in August. Zinc smelting processing costs will rise, 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, and the zinc market supply side may maintain a relatively loose supply, resulting in a bearish zinc market situation.

Future Market Forecast

According to data analysts from Business Society, macroeconomic sentiment is fluctuating, and strong support for non-ferrous metals is insufficient. LME zinc inventory has increased significantly, and domestic zinc supply is limited. The zinc market has sufficient supply. In the future, strong supply and weak demand will be the basic trend for a considerable period of time, and it is expected that zinc prices will consolidate weakly in the future.

According to the monitoring of the commodity market analysis system of the business community, this week’s (7.07-7.14) “V” trend of 1 # tin ingot in East China, the average market price was 234210 yuan/ton on July 7, and 233310 yuan/ton on July 14, a weekly drop of 0.38%.

The K-bar chart of commodity prices uses the concept of a price trend K-line to reflect weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell investments based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations. From the monthly K-bar chart, it can be seen that after November 2022, tin prices have risen continuously for three months due to macroeconomic factors. Since February 2023, the price has dropped by 11.35% per month, and the trend of tin prices has fluctuated narrowly in the past three months. From the weekly K-bar chart, it can be seen that the tin ingot market has been rising for eight consecutive weeks.

In terms of the futures market, Shanghai tin prices fell first and then rose this week. As the Wa mining ban approaches August and some domestic enterprises undergo maintenance, supply expectations are expected to tighten, and tin prices have surged close to the highest point in the year. But ultimately, due to high domestic inventory and poor downstream demand, the rise in tin prices was weak. On the supply side, the tight supply at the mining end is beginning to emerge, and the demand side is still in the off-season, and the market expects downstream demand to remain weak in the third quarter. In terms of inventory, domestic inventory is still at a high level. In general, tin is still in a pattern of weak supply and demand, and high inventory in China is still a factor restricting the upward trend of tin prices. With tin prices rising all the way, market transactions are generally weak. Downstream solder enterprises slow down procurement, mainly consuming inventory in the early stage, and transactions in the Spot market are light. In the future, the Business Society believes that tin prices are still following macro fluctuations in the near future. As August approaches, the focus will be on the further impact of Wa news on the market.

Related data:

On July 16th, the base metal index stood at 1222 points, unchanged from yesterday, a decrease of 24.38% from the cycle’s highest point of 1616 points (2022-03-09), and an increase of 90.34% from the lowest point of 642 points on November 24th, 2015. (Note: The cycle refers to the period from December 1st, 2011 to the present).

According to the price monitoring of Business Society, there were a total of 14 commodities in the non-ferrous sector on the list of commodity prices rising and falling in the 28th week of 2023 (7.10-7.14), with 2 commodities increasing by more than 5%, accounting for 8.7% of the monitored commodities in this sector; The top three commodities were Dysprosium(III) oxide (6.00%), silver (5.08%) and zinc (3.05%). There are a total of 8 products that have decreased compared to the previous month, with the top 3 products falling respectively being neodymium metal (-3.39%), antimony (-3.14%), and praseodymium metal (-2.39%). This week’s average increase or decrease was 0.95%.