August copper prices are inferior to other non-ferrous metals, but the cumulative increase is not small. Especially LME Lun copper, in August rose nearly 7%, quietly approaching 7,000 US dollars / ton. From the supply and demand fundamentals, copper prices support factors still exist, is expected to continue a strong pattern.

Copper supply elasticity still no relief

2017 – 2019, the new copper mine supply is not much, in 2017 the total production of small and medium-sized mines about 20.8 million tons. While the 2018 small and medium enterprises is expected to increase the amount of 285,000 tons; 2019 is expected to increase production of 245,000 tons. Therefore, the total supply of refined copper is largely dependent on the supply of copper concentrates, and the supply of refined copper will remain if global demand remains moderate due to lower supply growth. However, since the end of 2016, copper prices rose sharply, the future prospects of investment is very large, mainly concentrated in Peru, Chile and other countries, of which Peru’s potential investment capacity can be as high as 3.5 million tons, Chile, about 2.95 million tons, plus Ecuador 1 million tons, as well as other countries may invest in production capacity, the overall global potential capacity increase can be as high as nearly 8 million tons, but due to strong copper construction cycle, even if the immediate investment is expected to peak at least until 2022, Therefore, 1-2 years do not have to worry about copper oversupply.

Copper concentrate processing fee is low

CSPT set the third quarter processing fee bottom line of 86 US dollars / ton, 8.6 cents / lb, but since its set processing fees since the bottom line, the spot market processing fees continued to hover in the 79-85 US dollars / ton, 7.9-8.5 Cents / pound, continued lower than the processing company set the processing of the bottom line, limiting smelting enterprises from the spot market to purchase copper concentrate, thereby limiting the refined copper production. With the fourth quarter approaching, China refined copper production capacity or continue to put, while the copper concentrate supply elasticity is relatively small, which will further intensify the contradiction between copper supply and smelting capacity. In addition, the fourth quarter is also facing annual processing fees negotiations, smelting enterprises and mining between the game or more intense, whether it is smelting enterprises to reduce the spot copper procurement or mining reduction copper mine are not conducive to the release of refined copper production.

In addition, the current spot market processing fees have been approaching the smelting business smelting profit and loss line, if the fourth quarter once again smelting capacity to run, or make the processing fee below the overall profit and loss balance of smelting enterprises, will eventually make smelting production forced to decline. As a result, the supply of refined copper in the coming quarter is limited.

It is estimated that in 2017 China’s refined copper demand increase or 300,000 tons, while the August tracking situation shows that the main energy of the national grid basically the same, still on the elimination of renewable energy, to expand the field of alternative energy, these copper demand Pulling limited. However, with the passage of time, after entering the fourth quarter, short-term consumption season season has a certain role in promoting, mainly the current industry chain inventory are relatively low. The key to the demand for copper in the Trump infrastructure plan is whether the grid can be modified. Even if the implementation of the entire cycle dragged on a long, supply enough time to achieve matching.

In August, the world’s three major exchanges inventory, LME inventories fell 69,000 tons, COMEX inventories increased by 11,000 tons, SHFE inventories increased by 0.5 million tons, the global inventory in August net reduction of 53,000 tons. Due to refined copper supply elasticity is getting lower and lower, we believe that the overall decline in copper stocks into the pattern.

Into September, the domestic glacial acetic acid market should be expected to decline in the market, prices once again ushered in the rise. From 2016 and 2017 price comparison point of view, the highest market in 2016 in mid-December, East China average price of 3020 yuan / ton. As of the current market in 2017 three wave rally, which in mid-June the average price of 3090 yuan / ton. September East China acetic acid market to reach 3020-3100 yuan / ton to the price level is high. So should the bearish in September, why reversal up?

Factor one: multi-positive support raw materials continue to rise in methanol

Supply side tight, leading to raw material prices continue to rise in methanol. One is part of the installation overhaul, such as Inner Mongolia Jiutai, Shandong Yankuang Guohong, the supply was significantly reduced; the second is the start of the northwest olefins, methanol sales decline; Third, the United States, “Harvey” hurricane affect multiple sets of methanol plant parking, Southeast Asia 9-10 month maintenance focus, are leading to late imports shrinkage. Multi-positive support, the domestic methanol prices from mid-August began to rise, to the end of the rally more pressing.

Factor 2: acetic acid supply downturn enterprises pushed up emboldened

Beginning in June, the domestic glacial acetic acid market into the supply shortage stage, the East China region for several months there is a gap. First, the equipment turns overhaul, the second is a large number of exports in July exports up to 58,000 tons, the highest point for the history of exports. Both factors lead to domestic tight cargo. To the situation in early September has not yet eased. During the period, although Yankuang and Longyu stocks rose to high, but soon balanced out. In addition, the East China Jiangsu device in October there may be maintenance, and there are enterprises to overseas transfer cargo plan.

Factor three: some strong demand for enterprises to take goods better

Although the annual environmental protection calls higher, and the North is indeed a greater impact on environmental protection. But in the case of acetic acid enterprises tight, the downstream just need to be able to digest the supply of supply. Not to mention the downstream PTA continued high during the year, PTA operating rate last week reached 75-76%, and the previous period also continued high. In addition, the device production is PTA hot talk topic this year, as of now about 4.4 million tons of equipment production, including Jiangyin Hanbang 600,000 tons / year, Huabin 1.4 million tons / year, Xianglu 1.5 million tons / year Device, another Peng Wei Petrochemical restart 90 million tons / year device.
Domestic ethylene prices recently rose sharply, foreign factors due to the United States, “Harvey” hurricane led to part of the device parking, the international market prices rose sharply. Domestic downstream PVA price support, resulting in manufacturers to increase production, and VAE emulsion market is good, vinyl acetate consumption increased, so tight situation, the enterprise offer hit 7700 yuan / ton. Enterprise operating rate is also significantly improved, the current operating rate increased to 63%.

Other downstream chloroacetic acid due to the digestion of hydrochloric acid is still suppressed to the start of chloroacetic acid. But attracted by high profits, liquid chlorine down a large margin, continued to pay more than a thousand dollars. Hebei area of ​​chloroacetic acid started to recover from the previous period, the demand for acetic acid has been back to temperature.

Overall, the glacial acetic acid market rose again, for the multi-positive role. But the raw material rose to high prices of methanol, began to fall, the loss of support on the cost side. And acetic acid plant started to upgrade, Anhui inaction device around September 8 restart, supply is expected to upgrade. And the current high price of acetic acid, the downstream purchase intention more cautious. Comprehensive consideration, the supply is still dominant market, the recent market is still high and strong, do not rule out the possibility of continued to rise.

The recent domestic market price of hydroxyethyl methacrylate showed a positive push up the trend of operation, the overall supply side of the market continued to tense, the downstream end of the user is a single inquiry enthusiasm continued to improve. At present, the domestic market price of hydroxyethyl methacrylate has reached 26,500 yuan / ton, as nearly five years since the market is the highest single transaction price history. So what is the reason for the recent domestic hydroxyethyl methacrylate market to pay a high trend, and reached the history of the past five years, the highest level of it? This is mainly with the raw material market price of the positive up, with the domestic supply of hydroxyethyl methacrylate as a whole to maintain a low overall supply of imported goods is too low, the traditional sales season to come to the market, such as positive atmosphere and other factors have the most important relationship.

First of all, the recent domestic market price of hydroxyethyl methacrylate raw materials showed a high rise in the operating situation, and the overall supply of raw materials, scarce background, a difficult to find a raw material. Affected by the recent domestic market price of hydroxyethyl methacrylate continued high push up the trend.

Methacrylic acid hydroxyethyl ester raw materials are the most affected or methacrylic acid. Due to the recent environmental protection and security and other double inspection, the domestic methacrylic acid production enterprises parking maintenance frequency is, the overall supply level serious tight. Domestic methacrylic acid market continues a difficult situation. Oxyethyl methacrylate Another major raw material ethylene oxide also showed a market price continued high, and the overall supply side also showed a tight trend. As the supply of raw materials both tight, and sales prices continue to push up and other factors, the domestic production of hydroxyethyl methacrylate manufacturers have to cost under pressure to increase their offer prices.

Second, the recent domestic and international production of hydroxyethyl methacrylate market, the overall supply side is almost tight, the market is single trading level continued supply of tight supply situation. Affected by this, the market price showed positive performance trend.

Due to the recent tight supply of raw materials at home, the recent domestic production of hydroxyethyl methacrylate production load situation is relatively low level, the domestic hydroxyethyl methacrylate overall social stocks remain low. On the other hand, by the European and American regional demand continued to improve, and the United States hurricane and other factors, the domestic supply of hydroxyethyl methacrylate imports is not sufficient. And Evonik and other domestic production of hydroxyethyl methacrylate products to supply its core customers, the market supply is scarce, but also exacerbated the domestic market price of hydroxyethyl methacrylate continued to climb the atmosphere.

Third, the “gold nine silver ten” traditional sales season come, the terminal inquiry atmosphere more and more good, coupled with the supply of hydroxyethyl methacrylate market tightly, the overall market turmoil positive atmosphere.

At present, the current domestic consumption of hydroxyethyl methacrylate in the downstream consumption season, and the downstream end-user inquiry atmosphere showed a positive trend. Just need the background, the market is also a single purchase atmosphere is also showing a better trend. However, the overall supply of hydroxyethyl methacrylate in the domestic supply situation due to raw materials and other issues in a low-load operation, showing a situation of less than demand. Affected by this objective situation, the market began to become more and more rich atmosphere, the market began to show a substantial rise in the price pattern.

In summary, the current domestic market for high prices of hydroxyethyl methacrylate market prices, the overall situation is the shortage of raw materials supply, low start load, the supply is less than the demand situation and other factors.

In late August, the United States began to enter the hurricane season, under the impact of the defense, Harvey to bring the market a great destructive effect, resulting in the United States nearly a quarter of the refining capacity was forced off the assembly line, and then push Gasoline prices to two-year high, but also far away in the Pacific Asian market excited a lot.

From the charts, we can clearly see that before and after the end of August, in the United States Hurricane Harvey raging, the international toluene price level there is a clear upward, the following we have to look specifically at the international flow of toluene.

In the case of
From the arbitrage situation inside and outside the toluene disk, after entering August, arbitrage window opening degree in fact there is a gradual decline in the state, but thanks to the US hurricane brought about by the follow-up effect, August so far inside and outside the disk arbitrage window as a whole The trend of recovery, toluene inside and outside the disk arbitrage window opening trend of the gradual amplification of the situation, but because China in the second quarter of the basic environmental constraints in the shrinking stage of demand, which makes the spread of the internal and external disk is more limited The

However, from the US-Asian arbitrage activity, we can see that the long-term closure of the Asian and American arbitrage window was opened in late August, the spread was reached around $ 120, although with Harvey in the past, the two places spread Narrowed, but because of the new US Hurricane Alma already formed, the market arbitrage window thus maintained a high degree of opening.

In summary, due to the US hurricane invasion, resulting in the global price of toluene have been greatly improved, and caused a long-term closure of the Asian-American arbitrage window opened, which largely caused the market for September The domestic toluene imports may be expected to drop, and thus led to the domestic demand for toluene has not yet arrived in the occasion, they began to push the speculation and higher.

The recent domestic butanone market receding point, East China breakthrough in 9,000 yuan / ton after the achievements, in the production enterprises under the compromise under the dark down. Throughout the domestic butanone production capacity, there are still 245,000 tons / year butanone device parking, follow-up Lanzhou Petrochemical 30,000 tons / year butanone device will be parking, estimated monthly parking capacity will reach 275,000 tons / year. But the market outlook crisis also exists, Taizhou Petrochemical 80,000 tons / year butanone plant and Hebei Zhongjie 30,000 tons / year butanone device is expected to restart in October, Hunan Chemical Co., Ltd. in the export orders of sec-butyl ester after the completion of October Operating rate is expected to improve. In addition, the parking lot of Kazakhstan in September 40,000 tons / year butanone device will also be restarted in October, so in the market outlook is expected under the recent, buttone talk about loosening.

At present, the domestic butanone spot prices are high, the export is basically difficult to profit, but because the higher profits of production enterprises, the factory does not mind the export price upside down. Prior to August a large number of imported from China, butanone Europe and the United States, with Shell 90,000 tons / year ketone device restart, follow the basic to meet the supply. Although China has arbitrage space for Europe, but it is difficult to take the amount.

Downstream industry, there are some downstream costs to pass the weak, especially the existence of alternative downstream, and more to replace the raw materials, this part of the demand less limited impact on the butanone. September with Zhejiang and Shandong environmental inspection group evacuation, terminal demand has recovered, but due to the high price of methyl ethyl ketone, the downstream stocking atmosphere, and more on-demand procurement.

On the whole, under the internal and external problems, the domestic methyl ethyl ketone upside down, and reverse down. Traders are mostly reluctant to stock under the high, although the production enterprises and large dealers have a very price, but the ideal and reality gradually drifting away. The final price to the price, the market dominated the reversal.