Aluminum prices rose 4% in August

According to the data of business agency, on August 27, the average market price of domestic aluminum ingots in East China was 20650 yuan / ton, up 4% from 19856.67 yuan / ton at the beginning of the month.

Taking the average market price of 15726.67 yuan / ton of aluminum ingots at the beginning of the year (January 1, 2021) as the benchmark price, it has increased by 31.31%.

In mid August, the aluminum price broke through the 20000 mark and reached new highs.

Power rationing affects production capacity

The proportion of limited production in Yunnan has increased, and Guangxi, Guizhou and Inner Mongolia have also entered the ranks of limited production. The investment expectation of new production capacity during the year has been reduced to less than 1.3 million tons. At the end of July, Yunnan Shenhuo announced that the production limit was upgraded from 25% to 30%, and 35 units were forced to stop the tank again, with a total of 145 units stopped, and the operating capacity decreased to 550000 tons. In early August, Yunnan Aluminum was not spared. The shutdown situation was similar to that of Shenhuo. The shutdown ratio of aluminum plant reached 30%, and the operating capacity decreased to 1.87 million tons.

Expected factors: it is difficult to resume production in Guangxi and Yunnan in September. In the second half of 2021, the supply and demand of electricity in flood season is expected to be basically balanced, the supply may be insufficient in some periods, and there is still a gap in electricity and electricity from November to December. At the end of the year, Yunnan entered the dry season again, and the restart cost of electrolytic aluminum cell is high. In order to avoid frequent switching, it is expected that it will be difficult for Yunnan electrolytic aluminum plant to resume production on a large scale from September to October.

Rising price of raw alumina & electricity price policy raises the cost expectation of aluminum price

Due to the restrictive power supply in Guangxi, coupled with weather factors, the rainy season lasting for several months affected the mining of open-pit mines in Guangxi, and the ore supply decreased. It is reported that the output of two local alumina plants in Guangxi decreased by 7.2% compared with that before the reduction, with a total reduction of about 1.1 million tons of annual production capacity. The market price of China’s domestic alumina has maintained an upward trend recently, and the market price of alumina has increased slightly. At present, the quotation and transaction focus in the northern market are basically around 2700 yuan / ton. Recently, traders have actively entered the market, and alumina manufacturers are still strongly willing to support prices. Downstream electrolytic aluminum enterprises mainly execute long orders, and their enthusiasm for spot procurement of alumina is not very high.

The price rise of raw alumina is mainly driven by factors such as coal shortage and power restriction, and the cost of electrolytic aluminum continues to rise.

On August 27, the national development and Reform Commission issued a notice on improving the step price policy of electrolytic aluminum industry. It is proposed that the grading and price increase standards of stepped electricity prices will be improved, in which it is clearly prohibited to introduce preferential electricity price policies everywhere. All localities shall strictly implement the national electricity price policy. It is strictly prohibited to implement preferential electricity prices for the electrolytic aluminum industry and organize special transactions in the power market of electrolytic aluminum enterprises. Those that have been implemented and organized shall be cancelled immediately. It is strictly prohibited to include the introduction of preferential electricity price policies into the responsibility evaluation and assessment of energy consumption dual control objectives of Provincial People’s governments.

In addition, the NDRC also proposed to encourage electrolytic aluminum enterprises to improve the utilization level of non-aqueous renewable energy such as wind power and photovoltaic power generation and reduce fossil energy consumption. If the electricity consumption of non-aqueous renewable energy by electrolytic aluminum enterprises accounts for more than 15% of the total electricity consumption and is not less than the incentive value of non hydropower consumption responsibility weight of the province (autonomous region or municipality directly under the central government) in the previous year, the price increase standard of step electricity price will be reduced by 1% for every 1% increase in the proportion.

The aluminum ingot import window was opened, and the downstream aluminum export increased year-on-year

In July 2021, the import of electrolytic aluminum was 179000 tons, an increase of 13.29% month on month. By country, India and Russia imported 105300 tons and 33800 tons respectively, accounting for 59% and 19%. From January to July, domestic imports totaled 921800 tons, with a cumulative year-on-year increase of 165.86%.

The Shanghai Lun ratio fluctuated and strengthened. The aluminum ingot inventory in Shanghai free trade zone was in the range of 110000-120000 tons, and the port inventory data increased.

In July 2021, the export of unwrought and rolled aluminum and aluminum products was 469000 tons, and the cumulative export from January to July was 3085000 tons, with a cumulative year-on-year increase of 12.7%. The demand for foreign aluminum materials is obviously stronger, but the average monthly export volume is expected to remain at the level of 450000 tons, which is mainly restricted by factors such as high sea freight and frequent international trade frictions.

In August, downstream processing enterprises started construction, first restraining and then increasing

In early August, some aluminum processing enterprises in Zhengzhou and Luoyang, Henan Province received a notice from the Power Bureau under their jurisdiction. Large industrial enterprises limited power by 50% according to the situation, and all industrial enterprises below 10kV stopped production, which is expected to last for three weeks or more.

Downstream processing enterprises took the lead in restraining the start-up and then increasing. The start-up rate of leading aluminum processing enterprises fell by 0.6% to 67.8% in the second week of this month. Henan staggered peak power rationing again led to the weakening of the start-up rate. According to the category of aluminum materials, the production of aluminum plate, strip and foil enterprises is reduced due to insufficient power supply. At the same time, due to the epidemic situation in Zhengzhou, the transportation is blocked, and the willingness of foreign vehicles to go to the epidemic area is very low.

The weekly operating rate of leading aluminum processing enterprises increased by 0.5% to 68.3% in the third week of this month. According to the category of aluminum materials, the high price of aluminum and silicon has a great impact on aluminum profile, primary alloy and cable enterprises. The soaring cost of raw materials compresses the profits of processing enterprises. Relatively speaking, large enterprises do better in orders and risk prevention measures. The impact is relatively small compared with medium and small enterprises, and the order scheduling of aluminum cable enterprises is stable. Power rationing in Henan has eased, the operating rate of aluminum plate and strip has rebounded to 80%, and the operating rate of aluminum foil has remained unchanged. With the rise of aluminum price, some aluminum foil factories said they would increase the processing fee again.

The State Reserve sold 70000 tons in the third batch

According to the Announcement No. 2 of the State Food and Material Reserve Bureau in 2021, it is decided to launch the third batch of national reserve aluminum, zinc and copper in 2021 in the near future. The bidding period is 9:00-12:00 and 13:00-18:00 on September 1. If it is necessary to change the time or stop bidding under special circumstances, it will be notified separately.

The total sales volume of the third batch is 70000 tons of aluminum, 50000 tons of zinc and 30000 tons of copper.

Future forecast

In the golden nine silver ten, domestic demand has gradually come out of the off-season, which constitutes a certain demand factor for aluminum price. The cost and power restriction lead to the reduction of production capacity, which is beneficial to the price of aluminum ingots on the supply side and cost side. At present, the aluminum price support is formed, but the basic price is relatively high, the social inventory destocking is weakened, and the market game tends to intensify.

Ye Jianjun, an analyst of business society, expects that the aluminum ingot price will still operate around 20000 yuan / ton in the near future. On the whole, the short-term downward risk will be weakened and the high shock operation will still be maintained.

DOP rose again in price differences

According to the data monitoring of the business agency, DOP prices fell first and then rose this week. Recently, DOP prices have great differences between long and short, and DOP prices have been adjusted in waves. As of August 26, the DOP price was 14750.00 yuan / ton, down 1.01% from the DOP price of 14900.00 yuan / ton on August 20 last weekend; Compared with the DOP price of 15675.00 yuan / ton on August 1, a decrease of 5.90%; Compared with the DOP price of 14925.00 yuan / ton on August 10, it decreased by 1.17%. Since mid August, the cost of DOP raw materials has been divided between long and short, and the price of DOP has been adjusted by shock.

Long and short differences in raw material prices continued

It can be seen from the isooctanol price trend chart that the long and short differences in the isooctanol market continued in August. This week, the isooctanol price fell first and then rose. The DOP cost fluctuated and adjusted. The DOP market profit was around the cost line. In general, the DOP cost decreased in the future, and there was great downward pressure on DOP.

The downstream market rebounded and warmed up

As can be seen from the PVC price trend chart, the PVC market fluctuated and rose in August, the PVC price rose again this week, the downstream demand of DOP warmed up, and the upward momentum of DOP increased.

Market overview and future expectations

Bai Jiaxin, DOP data analyst of business agency, believes that the long and short differences in DOP raw material isooctanol market continue, the overall isooctanol price drops, DOP costs fall, and the downward pressure on DOP increases. The recovery of downstream PVC market is good for DOP market, but the overall demand for DOP is general, and the rising power of DOP is limited. In the future, the upward momentum of DOP market still exists, and the downward pressure is weakened. It is expected that DOP price will fluctuate slightly.

1、 Price trend

According to the data in the bulk list of business society, the price of pure benzene fell continuously this week. On August 15, the price of pure benzene was 7450-7600 yuan / ton (average price 7540 yuan / ton), and on Sunday (August 22), the price of pure benzene was 7250-7550 yuan / ton (average price 7480 yuan / ton). The average price decreased by 60 yuan / ton, or 0.8%, compared with last week; Compared with the same period last year, it increased by 119.35%.

2、 Analysis and review

Affected by the epidemic situation in the early stage, the import ship was delayed, and the delivery near the end of the month, the domestic purchase was more active, and the negotiation of pure benzene was better. However, during the week, crude oil fell deeply, coupled with the continuous decline of styrene, the fundamental support weakened, pure benzene was under pressure, and the price fell.

In terms of external market, the reference price of pure benzene in the Korean market on Friday (August 20) was US $935 / ton, down US $44 / ton, or 4.49%, compared with August 13; The reference import price in East China was US $959 / T, down US $31 / T or 3.13% month on month on August 13.

In terms of crude oil, the spread of delta mutant virus has led to a bearish market on the demand recovery process. In addition, official data show that the oil refining output and economic activity of major emerging market countries have slowed down, the market pessimism has increased, and the international oil price has continued to decline this week. On August 13, Brent fell $5.41 / barrel, or 7.66%; WTI fell $6.12/barrel, or 8.94%.

Downstream: styrene: styrene fell continuously this week. On August 20, the price of sample enterprises was 9625 yuan / ton, down 4.17% from last week and up 65.87% from the same period last year. The fundamentals of styrene market have not changed much this week, supply has increased and demand has rebounded, but the overall situation is still weak, and the price trend is guided by crude oil.

Aniline: due to the impact of the epidemic, the shipment of enterprises in East China is blocked, but the downstream demand is good, and the market bullish mentality is good. The inventory of aniline factories in North China was low, enterprises were reluctant to sell at low prices, and the offer continued to rise. On August 20, the price of aniline in Shandong was 10900-11100 yuan / ton and that in Nanjing was 11100-11200 yuan / ton, up 4.78% from last week.

3、 Future forecast

In terms of crude oil, the delta virus is spreading, the market is worried about limited demand, and the international oil price is still likely to fall. In the future, we will continue to pay attention to the impact of the epidemic situation, OPEC + decisions on crude oil production, the inventory dynamics of crude oil and refined oil in the United States, and the global economic situation on crude oil prices.

Downstream: the price of pure benzene went down, and the profit space of downstream products rebounded. Downstream main product styrene: at present, there is no significant change in the supply and demand of styrene, and the price trend is guided by crude oil.

The cost side is still likely to fall, and the support for pure benzene is weak; The downstream profit space is expanded, the operating rate is improved, and new units are expected to be put into operation in the downstream, and the demand for pure benzene is better in the near future. Overall, near the end of the month delivery, the pure benzene market may pick up, but crude oil may drag down the price. Continue to pay attention to the downstream market, the dynamics of domestic pure benzene units, and the impact of crude oil, external market and other trends on the price of pure benzene.

According to the bulk data monitoring of business society, the price trend of acetic acid fell first and then rose this week. On August 20, the price of acetic acid was 6050.00 yuan / ton, down 0.55% compared with the price of 6083.33 yuan / ton on August 14, an increase of 1.11% compared with the beginning of the month. As of August 20, the market price of acetic acid in various regions in China rose and fell as follows:

region August 14th August 20th Price rise and fall

East China 5950-6600 yuan / ton 5850-6600 yuan / ton – one hundred

South China 5900-5950 yuan / ton 5850-5900 yuan / ton – fifty

North China 5750-6050 yuan / ton 5950-6100 yuan / ton 50/200

Shandong region 6000-6050 yuan / ton 5900-6000 yuan / ton – 50/-100

Jiangsu region 5950-6050 yuan / ton 5850-6000 yuan / ton – 50/-100

Zhejiang region 6000-6100 yuan / ton 5900-6000 yuan / ton – one hundred

Hebei region 6000-6050 yuan / ton 6050-6100 yuan / ton fifty

This week, the domestic acetic acid was weak and sorted out, with differentiated operation in various regions. Individual acetic acid enterprises in North China, Shandong and Hebei were overhauled. The market supply was tight, the enterprise quotation was high, the downstream demand was rational, and the overall production and sales of the market were relatively stable; In South China, Zhejiang and Jiangsu, the market inventory is sufficient, the downstream market entry enthusiasm is general, the purchase is rational, the market trading is insufficient, and the market is weak.

In the downstream, the market situation of vinyl acetate is mainly wait-and-see consolidation, and butyl acetate is relatively strong. Supported by the rising price of raw material n-butanol, the market increases in the week, the downstream reflection is weak, and the future market is stalemate consolidation; The market of ethyl acetate was weak. The quotation fell first and then rose within the week, with an overall decline of 0.89%. The market trading was general, the downstream follow-up was not smooth, and the market fluctuated in the later stage.

Business analysts believe that the downstream demand in various regions in China is rational and just needs to follow up. In terms of market supply, the enterprise has no other device maintenance plan for the time being, the market supply is relatively stable, and the production and sales of the enterprise are basically running smoothly. From the perspective of supply and demand performance, it is expected to wait and see the consolidation and operation of the future market and pay attention to the market transaction.

Trade name: urea

Latest price (August 23): 2750.00 yuan / ton

On August 23, the ex factory quotation of urea in Shandong was temporarily stable, which was the same as that on August 20, with a year-on-year increase of 57.74%. The prices of upstream coal and liquefied natural gas have increased slightly recently, with strong cost support. From the perspective of demand: the transaction is mainly just needed, the agricultural demand is general, and the industrial demand is normal; The operation of downstream compound fertilizer and rubber plate plants is not high, and the operating load rate of melamine enterprises remains high. Most of them are used with mining and followed up with a proper amount of bargain hunting. From the perspective of supply: urea has entered the off-season of agricultural demand, and the early maintenance enterprises have gradually resumed production, with a daily output of about 155000 tons, which has increased. However, the follow-up of new orders is not smooth, and the shipping pressure increases. On the whole, the urea cost support is strengthened, the downstream demand is weakened, and the urea supply is slow.

In the future, the ex factory price of urea in Shandong is expected to decline slightly: the average price quoted by the manufacturer is about 2700 yuan / ton.