Zinc prices rose first and then fell in March

According to the Commodity Market Analysis System of Shengyishe, as of April 1st, the price of zinc was 20832 yuan/ton, which increased and then decreased compared to March 1st’s zinc price of 20586 yuan/ton, with an increase of 1.19%; Compared to March 14th, the zinc price of 21434 yuan/ton decreased by 2.81%. The production of zinc mines has decreased, the concentration of zinc concentrate has decreased, and the supply of zinc in March has decreased. The macroeconomic recovery is less than expected, and the support for the increase in zinc prices is insufficient. In March, zinc prices first rose and then fell.

The supply of zinc in the market is decreasing

According to foreign news on March 6th, South Korea’s Young Poong Corp stated that it has reduced the production of its Seokpo zinc smelter by one-fifth. The Seokpo zinc smelter produces 400000 tons annually and is the sixth largest zinc smelter in the world. A large-scale production reduction or complete closure will reduce the expected surplus of 300000 tons this year, leading to a shortage in the zinc market. Expected reduction in zinc supply in the market.

Luoping Zinc Electric announced that on March 7, 2024, the company received a production shutdown notice from the Luoping County Emergency Management Bureau. According to the production suspension notice, the company’s Fule Lead Zinc Mine will cease all production activities from today onwards. In addition to the shutdown of Fule Lead Zinc Mine, other mines of Luoping Zinc Power are also in a state of shutdown. Industry insiders have pointed out that due to the increasingly strict regulatory environment, the resumption of production at the Luoping Zinc Electricity Mine may take more than a year for the relevant mines to complete. In addition to Luoping Zinc Power, there are plans for smelter maintenance and production reduction in regions such as Hunan, Sichuan, Guangxi, Yunnan, Liaoning, and Gansu, which are expected to affect a reduction of nearly 30000 tons. Zinc smelters have reduced production and increased demand, leading to a decrease in zinc supply in the market.

According to statistics from the General Administration of Customs, the import volume of zinc concentrate in China in January 2024 was 395900 tons, a decrease of 10.4% month on month and 8.18% year-on-year. In February 2024, the import volume of zinc concentrate was 251200 tons, a decrease of 36.56% month on month and 46.69% year-on-year. The cumulative import volume of zinc concentrate from January to February 2024 was 647100 tons, a year-on-year decrease of 28.28%. The import volume of zinc concentrate has decreased, and the supply of zinc concentrate is tight. The processing cost of zinc concentrate decreased in March, and the supply of zinc in the market was tight.

The demand growth in the zinc market is lower than expected

China has entered the traditional consumption peak season of “gold, silver, and four”, with expected recovery in demand, boosting the rebound of non-ferrous metals. During the two sessions, the market waited for positive news, and overall macroeconomic sentiment rebounded. The domestic macroeconomic situation was positive, while the non-ferrous metal market was positive.

During the Two Sessions, environmental protection in the north has imposed production restrictions, and galvanized processing enterprises have reduced production significantly. The current production restrictions have not yet ended, and the consumer recovery is not as expected. Downstream sentiment towards accepting goods is not good, and there is no significant improvement in spot trading. The downstream production of zinc in the Tianjin market is limited by environmental protection, and the order volume is relatively poor, resulting in insufficient willingness to purchase zinc ingots; The transaction volume of zinc ingots in the Foshan market is also very low. Overall, the environmental impact has led to poor downstream production of zinc and lower than expected demand in the zinc market.

The Swiss central bank announced a 25 basis point rate cut and adjusted the benchmark interest rate from 1.75% to 1.5%. The sudden shift in monetary policy by the Swiss central bank may lead to a series of chain reactions. The US PMI data released by S&P Global and Research shows that the initial value of Markit’s manufacturing PMI in March was 52.5, and the initial value of Markit’s comprehensive PMI in March was 52.2. The US manufacturing business activity in March showed strong performance, setting the fastest growth rate in nearly two years. In the past two weeks since mid March, the US dollar index has continued to rise, with macroeconomic recovery. However, inflationary pressure still exists, and the macroeconomic weakness in the zinc market remains. The demand growth in the zinc market is not satisfactory.

Future Market Forecast

According to data analysts from Business Society, in terms of supply, there were many reports of zinc mines and zinc smelters shutting down and reducing production in the international and domestic markets in March, leading to a significant decrease in zinc supply and stimulating an increase in zinc prices; However, in terms of demand, March was originally the traditional peak season for consumption, but during the Chinese People’s Congress and Chinese People’s Political Consultative Conference, northern environmental protection limited production. In addition, the recovery of enterprises after the conference was less than expected, and the macroeconomic recovery in the international market was less than expected, resulting in poor demand growth in the zinc market. In the future, the domestic zinc market is accumulating reserves, and the environmental protection restrictions on production in the zinc market are gradually slowing down. The supply and demand expectations for zinc in the market are increasing. However, as the Qingming Festival approaches, the growth of demand for zinc in the market is limited, and it is expected that zinc prices will be weak and volatile in the future.

Ethylene glycol prices fell by 1.92% in March

The price of ethylene glycol was weak in March. According to data from Business Society, as of March 29th, the average price of domestic oil to ethylene glycol was 4516.67 yuan/ton, a decrease of 1.92% from the average price of 4605 yuan/ton in the East China market on March 1st. The prices for each region are as follows:

The price range for spot goods executed by mainstream manufacturers in East China is between 4500-4730 yuan/ton; The spot price of ethylene glycol in the South China market is 4500 yuan/ton, while the mainstream spot manufacturers in Central China have a price range of 4500 yuan/ton for external execution; The mainstream manufacturers in North China offer a spot price of 4500 yuan/ton for external transactions.

The price of ethylene glycol in April may continue to fluctuate weakly

The price of ethylene glycol in April may continue to fluctuate weakly, for the following reasons:

1. The supply side game intensifies. There is an expected contraction in domestic ethylene glycol supply in April. The supply side is expected to concentrate on delivering 2.55 million tons of maintenance equipment from the end of March to April; In terms of overseas imports, due to the favorable price difference between domestic and international markets, the number of arrivals to ports has increased. The market expects that the import of ethylene glycol will increase to 500000/55000 tons respectively from March to April. In early April, the import volume decreased month on month, but the total supply decreased month on month, and the overall supply remained relatively high in absolute terms.

2. In March, the inventory of ethylene glycol at the port began to shift from the previous state of destocking to accumulation, and in April, the inventory of ethylene glycol at the port may continue to accumulate. The market expects that in terms of overseas imports, due to the favorable price difference between domestic and foreign markets, there will be an increase in port arrivals. The market expects that the import of ethylene glycol will increase to 500000/55000 tons respectively from March to April. As of March 28th, the inventory of ethylene glycol in the main port of East China was 839000 tons, an increase of 33600 tons compared to 805400 tons on March 21st; Compared to the low point in March (March 7th), the total spot inventory of ethylene glycol in the main port of East China was 702100 tons, with an increase of 136900 tons in inventory.

According to the Commodity Market Analysis System of Business Society, as of March 27th, the average quoted price of polyethylene glycol 400 by enterprises is 7550.00 yuan/ton, which is basically the same as the price at the beginning of the month.

In March, the market for polyethylene glycol 400 remained stable with minor fluctuations. As of March 27th, the quotation for some imported PEG400 in the East China market is based on 7700-7900 yuan/ton, while the quotation for some imported PEG400 in the South China market is based on 7800-8000 yuan/ton, for reference only. Actual negotiations are the main focus.

Price influencing factors:

Cost side:

Ethylene oxide: In the production process of polyethylene glycol, ethylene oxide is one of the main raw materials and has a significant impact on the polyethylene glycol market. In March, supported by supply side contraction, the ethylene oxide market maintained a high trend, and costs faced strong support from the polyethylene glycol market. Currently, the utilization rate of ethylene oxide production capacity is at a low level, and downstream cautious observation and follow-up may continue to support the polyethylene glycol market in the short term.

Supply and demand side:

In March, the market supply and demand remained relatively stable, and the demand for polyethylene glycol was widely used. The downstream water reducing agent industry followed up relatively slowly, and the atmosphere for new orders in the market was flat. The downstream pharmaceutical and daily chemical industries maintained stable demand, while the downstream textile industry was in the traditional peak season of “gold, silver, and four”. The enthusiasm for inquiries was still good, and the overall market transactions were mainly based on rigid demand.

Future Market Forecast:

According to polyethylene glycol analysts from Business Society, the trend of the domestic polyethylene glycol market in March was mainly influenced by the raw material ethylene oxide, with downstream inquiries and purchases mainly in demand. The market atmosphere is relatively stable, and it is expected that in April, the trend of polyethylene glycol may follow the raw material ethylene oxide, and more attention should be paid to market news guidance.

After the Spring Festival, the sulfuric acid market has been climbing step by step. According to the Commodity Analysis System of Business Society, the domestic sulfuric acid market prices have significantly increased after the holiday. The price of sulfuric acid increased from 187.50 yuan/ton on February 17th to 298.75 yuan/ton on March 26th, an increase of 111.25 yuan/ton, an increase of 59.33%, and a year-on-year increase of 17.16%.

From the supply side, after the holiday, the operating rate of manufacturers has increased, factory prices have increased, and the inventory of manufacturers is relatively low.

Cost side: The sulfur market has significantly increased

From a cost perspective, the post holiday sulfur market has a positive trading atmosphere, smooth refinery shipments, and an increase in sulfur prices. The price of sulfur increased from 986.67 yuan/ton before the holiday to 1063.33 yuan/ton at the end of the month, an increase of 7.77%, and the price at the end of the month decreased by 9.12% year-on-year. The upstream sulfur market has significantly increased, with good cost support, which has a positive impact on the price of sulfuric acid.

On the demand side: Downstream market fluctuates and rises

From the demand side, the supply of titanium ore is tight, and 18 titanium dioxide companies have successively sent letters to raise prices. The overall confidence in the on-site market is good, and the inventory of manufacturers is tight, causing the titanium dioxide market to fluctuate and rise. The market price of titanium dioxide increased from 16583.33 yuan/ton before the holiday to 17166.67 yuan/ton at the end of the month, an increase of 3.52%. The downstream market of sulfuric acid has slightly increased, and downstream manufacturers are more proactive in purchasing sulfuric acid.

Looking at the future: In mid to early April, the domestic sulfuric acid market may experience a slight fluctuation and rise, with consolidation being the main trend. The downstream titanium dioxide market is fluctuating and rising, and the downstream has a good enthusiasm for purchasing sulfuric acid. The upstream sulfur price has significantly increased, leading to increased cost support. The sulfuric acid analyst from Business Society believes that in the short term, the sulfuric acid market may experience slight fluctuations and gains due to various factors such as supply and demand and raw materials, with consolidation being the main trend.

1、 Price trend

According to the Commodity Market Analysis System of Business Society, the average market price of 55% powdered ammonium phosphate in China was 3130 yuan/ton on March 18th, and 3130 yuan/ton on March 22nd. The market price of 55% powdered ammonium phosphate remained stable this week.

According to the Commodity Market Analysis System of Business Society, the average market price of 64% diammonium phosphate in China was 3976 yuan/ton on March 11th, and 3976 yuan/ton on March 18th. The market price of diammonium phosphate remained stable this week.

2、 Market analysis

This week, the ammonium phosphate market has been operating steadily, with stable quotes from manufacturers. The prices of raw materials such as phosphate ore and sulfur have risen, leading to increased cost support. The demand side is slightly light, and the market trading atmosphere is weakened. Downstream purchases are made on demand, and new transactions are limited. As of March 22, the market price of 55 powder ammonium in Hubei region is around 3000-3100 yuan/ton, and the factory price of 55 powder ammonium in Henan region is around 3100-3200 yuan/ton, with actual negotiations being the main focus. The outbound price of 64% diammonium in Shandong region is around 3900-4050 yuan/ton, and the outbound price of 57% diammonium is around 3650-3730 yuan/ton. The actual transaction is negotiable.

In terms of raw material sulfur. This week, the sulfur market is relatively strong and upward. As of March 22nd, the reference price for sulfur in East China is around 1047 yuan/ton.

In terms of raw material phosphate ore. This week, the phosphate ore market has shown a fluctuating trend of ups and downs. At the beginning of the week, the overall price of phosphate ore in the Yunnan region of China increased, with some mining companies that had previously quoted lower prices raising the price of 30 grade phosphate ore by about 20 yuan/ton. Later, during the mid week period, some mining companies in Guizhou region also lowered the prices of mid to high end grade phosphate ore narrowly based on their own shipments, with a reduction of about 10-30 yuan per ton. The phosphate ore market in other regions mainly continues to consolidate and operate.

3、 Future Market Forecast

According to analysts from Business Society, the current market situation for ammonium phosphate is consolidating. Although there is cost support, downstream demand has weakened. It is expected that the short-term ammonium phosphate market will be weak, with consolidation and operation as the main focus.