Price Trends of Spot Precious Metals

On September 23, 2019, the domestic precious metal price, spot gold and silver, stopped falling and rose. Among them, the average daily increase of silver spot price was 1.95%, and the spot price of gold rose by 1.17%.

Data from business associations showed that the average spot price of gold in China was 349.18 yuan/g on the 23rd, down 1.22% from 353.50 yuan/g on the 1st day, and up 22.91% from 284.10 yuan/g at the beginning of the year (01.01). The spot price of silver in China is 4442.33 yuan/kg, which is 0.65% lower than the spot price of silver in the first day, 4471.33 yuan/kg, and 22.80% higher than the spot price of silver at the beginning of the year (01.01), which is 3617.67 yuan/kg.

Short-term positive factors

1. Geopolitical factors: On the 20th, the United States announced sanctions against three Iranian entities, such as the Central Bank of Iran. The geopolitical situation of U.S. -Iran relations is not optimistic.

2. Sino-US trade negotiation factors: According to Xinhua News Agency, the Sino-US economic and trade team held consultations at the Deputy ministerial level in Washington, D.C., and conducted constructive discussions on economic and trade issues of common concern. The two sides also seriously discussed the specific arrangements for the 13th round of high-level economic and trade consultation between China and the United States to be held by the leaders in Washington in October. Both sides agreed to continue to maintain communication on relevant issues.

Expected market outlook

There are many uncertain risk events in Sino-US trade, the expectations of interest rate cuts of central banks are increasing, and the market hedging mood rises and falls. Generally speaking, the advantages of precious metals in hedging, preserving and increasing value, and resisting inflation are favored by the market. Business analysts believe that the price of precious metals has now tended to a relatively high level in the history of gold and silver, and the market is expected to see a change in risk aversion enthusiasm in the near future, with strong operation predominantly in the near future.

I. price trend

According to the data of business associations, the domestic market price of diammonium phosphate remained stable this week. The average price of 64% diammonium is 2416 yuan/ton at the beginning of the week, and 2416 yuan/ton at the end of the week. The price is stable. On September 20, the DAP commodity index was 72.09, down 30.00% from the peak of 102.98 points in the cycle (2011-10-08), and up 1.22% from the low of 71.22 points on July 16, 2017. (Note: Period refers to 2011-09-01 to date)

II. Market Analysis

Products: The domestic diammonium market is running steadily. The start-up rate of enterprises is still acceptable, and the volume of new orders is limited. At present, 64% of diammonium in Hubei is quoted 2300-2500 yuan/ton, 64% of diammonium in Shandong is quoted 2400-2550 yuan/ton, 64% of diammonium in Yunnan-Guizhou is quoted 2500 yuan/ton, and 64% of diammonium in Anhui is quoted 2400 yuan/ton.

Industry chain: raw material sulfur prices continued to fall, market negative bearish sentiment remains, the trend is weak. Inventory consumption is slow and the market is hard to find a good one. Phosphate ore market is running smoothly as a whole. Enterprises in several mainstream areas monitored by comprehensive business associations quote prices. The average price of domestic 30% grade phosphate ore is around 330-430 yuan/ton. This week, according to the monitoring of business associations, the domestic market for liquid ammonia is stable and small. Some enterprises in Shandong have slightly increased by 50-100 yuan/ton. At present, local ammonia volume is tense, and there is no pressure for enterprises to ship goods. However, manufacturers with large ammonia volume are mainly stable in price. The mainstream quotation in Shandong is 2900-3100 yuan/ton. Compound fertilizer enterprises are not ideal for purchasing, and the stock pressure is relatively high, and the autumn market is weak.

Industry: According to the price monitoring of business associations, in the 37 th week of 2019 (9.16-9.20), there were 2 kinds of commodities rising and falling in the list of fertilizer prices, 2 kinds of commodities falling, and 5 kinds of commodities rising and falling to 0. The main commodities rising were ammonium nitrate (1.68%) and liquid ammonia (1.04%). The main commodities falling were ammonium chloride (-1.05%) and urea (-0.73%). This week’s average rise and fall was 0.1%. According to the business association price monitoring, in the 37th week of 2019 (9.16-9.20), phosphorus chemical prices rose and fell in the list of two commodities, fell in a total of 0 commodities, rose and fell in a total of three commodities. The main commodities that rose were phosphoric acid (2.53%) and yellow phosphorus (1.77%) with an average increase or decrease of 0.86% this week.

3. Future Market Forecast

Ammonium phosphate analysts believe that this Tuesday’s ammonium market continued to be weak, low export prices, upstream and downstream game. Due to weak raw material sulfur market, limited support and lack of favorable market. Insufficient terminal demand, on-demand procurement. It is expected that the market of diammonium phosphate will continue to operate in a weak position in the later period.

Price Trend

According to the data monitored by the business associations, the PP market has been volatile in mid-September, and domestic price quotations have increased. As of September 19, the mainstream offer price of T30S by domestic producers and traders was around 8866.67 yuan/ton, up 1.53% from the first week of September.

II. Cause Analysis

Upstream: Upstream propylene, recently attacked by Saudi oil production plant, news that US President Trump is considering relaxing sanctions on Iran and Saudi Arabia said that oil production will soon resume, and other international news, the international crude oil market soared after a sudden dive, the propylene market has a negative impact. However, the supply of propylene is tight before and after the festival, and the current refinery inventory is low. The downstream aggregation factories are still profitable, customers are active in purchasing and trading. The downstream market is mostly stable and rising slightly. After the on-site quotation rose, it stabilized and the operation gradually tended to be cautious. Propylene prices are expected to be adjusted and operated in the near future.

Products: In mid-September, PP market overall price shocks have risen, with emphasis on consolidation. Upstream propylene is relatively stable after rising, and the cost-side support for PP is still acceptable. Although crude oil has fallen sharply after the rise, the Mid-Autumn Festival stockpiling has just passed and the National Day stockpiling is approaching. In addition, the air pollution control scheme around Beijing and Tianjin wings in China has resulted in the shutdown of multi-city aggregation factories. The stock of two barrels of oil PP and traders has continued to decline. Businessmen have actively shipped, and the stock has declined significantly. Tight spot supply is beneficial to price formation. On-site trading atmosphere is more cautious, and the spot market is generally better. Zhenhai Refinery (Sinopec East China) PP ex-factory price, drawing T30S quoted 9050 yuan/ton. Jiujiang Petrochemical (Sinopec East China) PP ex-factory price, drawing T30S quoted 8850 yuan/ton. Fushun Petrochemical (CNPC East China) PP ex-factory price, drawing T30S quoted 8700 yuan/ton. Daqing Petrochemical (CNPC Northeast) PP ex-factory price, drawing T30S quoted for 8950 yuan/ton. Dalian Organic PP (CNOOC Northeast) ex-factory price, drawing T30S quoted 8850 yuan/ton.

3. Future Market Forecast

PP business analysts believe that: in mid-September domestic PP price shocks have risen, upstream propylene rose after stabilization, cost-side support is still acceptable. Polymerization plants in many areas of China are expected to implement production restriction orders, and polypropylene plants are expected to stop production more. Downstream factories due to the recent upsurge of reserve goods before and after the two holidays, the recent acquisition of more active, better demand. The trading atmosphere is good. Dealers are willing to make a bid, and it is expected that the recent trend of PP will probably continue the trend of shocks and adjustments.

1. Melamine price trend:

According to the business community price monitoring: as of September 17, the domestic melamine market prices rose slightly. At present, the mainstream price of melamine in China is 5700-6000 yuan/ton, which is 1.07% higher than Tuesday (September 10) and 1.61% higher than August 17.

II. Market analysis:

Products: Domestic melamine market prices rose slightly on the 17th. At present, the start-up of domestic melamine plant is not high, there is no pressure on manufacturers to ship, and the market price is generally slowly rising. At present, the mainstream quotation of melamine market in Xinjiang is around 5450 yuan/ton; the mainstream quotation of melamine market in Sichuan is around 5850 yuan/ton; and the mainstream quotation of melamine market in Henan is around 5800 yuan/ton. The mainstream quotation of melamine market in Shandong is around 5800 yuan/ton.

Industry chain: raw material liquid ammonia rose 0.52% on the 17th day compared with last Tuesday (September 10). On the 17th, raw material urea, Shandong small granular urea mainstream factory price temporarily stabilized: Yangmei Plain quoted 1800 yuan/ton, the quoted price temporarily stabilized; Ruixing Chemical quoted 1820 yuan/ton, the quoted price temporarily stabilized; Mingshui Chemical quoted 1850 yuan/ton, the quoted price temporarily stabilized. On the whole, the ex-factory price of urea in Shandong Province was temporarily stable on the 17th, and the actual transaction price was subject to negotiation. Raw urea fell by 0.91% on Tuesday, September 10. The demand of downstream industries such as sheet metal, papermaking and moulding has not been substantially improved.

Industry: According to the price monitoring of business associations, on September 17, 2019, there were 28 commodities rising annually in the chemical sector, of which 1 commodity increased by more than 5%, accounting for 1.2% of the monitored commodities in the sector; the first three commodities were nitric acid (12.62%), acetone (4.72%) and aniline (4.55%). There were 8 kinds of products with a decline of more than 5%, accounting for 1.2% of the monitored products in this sector. The products with the first three declines were dichloromethane (-7.41%), sulfur (-2.79%) and ethyl acetate (-1.78%). The 17-day average rise and fall was 0.55%.

3. Future market forecast:

Melamine analysts believe that the upstream raw material liquid ammonia prices rose slightly, urea prices fell slightly, little impact on melamine. The melamine market rose slightly, but the downstream terminal demand did not change significantly, and the market was limited. It is expected that the domestic melamine market will be consolidated in the short term.

1. Nickel Spot Trend

According to the monitoring of nickel prices by business associations, the spot price of nickel on September 17 was 135766.67 yuan/ton, which was 2.99% lower than 139950 yuan/ton on the previous trading day, 4.73% higher than that at the beginning of the month, 51.68% higher than that at the beginning of the year and 27.80% higher than that at the beginning of the year. Nickel prices have risen from September 3 to the highest price in nearly seven years, approaching the 150,000 mark, and are now mainly retraced.

LME nickel inventory increased by 6.6%.

As of September 13, LME nickel stocks increased by 6.6% to 166680 tons, the largest increase since June. LME nickel stocks fell slightly from 2406 tons to 164274 tons on the 16th.

2. LME Nickel Inventory Trend Chart in Past Years

As can be seen from the chart above, when LME nickel stocks were at a low level of 150,000, nickel prices rose relatively high. Now LME nickel stocks are rising and nickel prices are falling. But nickel stocks are still at a low level of 160,000.

Indonesia Prohibits Mining and Philippines Develops New Domestic Mines

Earlier, the Indonesian government announced a ban on nickel exports, which shocked the global nickel market. As the second largest nickel producer in the world after Indonesia, the Philippines can be said to want to seize this once-in-a-lifetime opportunity to develop new domestic mines, increase production and raise domestic nickel prices. It is expected that Philippine nickel miners will increase their ore production when the new mining season begins in April next year. Nickel production in the Philippines is expected to grow at an average annual rate of 2.5% over the next 10 years.

But at the same time, doubts arose. The Philippine Nickel Association (PNIA) said that it was still open to question whether the Philippine nickel industry could act as expected because of the stringent and uncertain mining policies in the Philippines.

3. Small adjustment of downstream stainless steel price

As of September 17, the daily average price of 304/2B stainless steel plate 1.0*1219*2438 (tolerance 0.91) was 14107.14 yuan/ton (including tax), which was flat compared with the previous trading day and slightly increased by 4.3% compared with the beginning of the year.

Stainless steel high output but limited terminal demand

In August, the initial value of stainless steel production in China was 260.2 million tons high, and some steel factories responded well to orders received in August. Stainless steel mills are still profitable, and high output of steel mills will increase the demand for nickel metals. With the high production of stainless steel, the inventory of stainless steel has reached a historical high, but the terminal consumption performance is weak.

Indonesia’s Ban on Mines has come to an end and Nickel Price has returned to the fundamentals

To sum up, Nickel analyst Liu Meimei of the Business Association believes that the dust of Indonesia’s mining ban has settled, bullish sentiment has eased, with the increase of LME nickel inventory, nickel prices have slightly retraced. Overall, however, the high output of stainless steel downstream supports nickel prices. Plus, there is still a shortage of nickel in the nickel mine. The golden nine peak season comes quietly, or has some support for nickel. It is expected that the price of nickel in September will have no other news, basically in a high volatility trend.