Zinc price “V” type operation in August

According to the Commodity Market Analysis System of the Business Society, as of August 31, the zinc price was 21208 yuan/ton, a slight increase of 0.25% compared to the zinc price of 21156 yuan/ton on August 1; The zinc price has increased by 6.33% compared to 19946 yuan/ton on August 17th. The macroeconomic performance in July was poor, with zinc prices dropping significantly in early August; The traditional consumption peak season of “nine gold and ten silver” is approaching, and terminal demand is expected to improve; Supported by macro bullish conditions and tight supply, zinc prices fell first and then rose in August. As the fundamentals of the zinc market improved, the focus of zinc prices shifted upwards.

Zinc prices in the LME market fell first and then rose in August

From the trend chart of zinc prices in the LME market, it can be seen that in August, zinc prices in the LME market first fell and then rose. Data released in early August showed that employment growth in the United States further slowed down in July, macroeconomic growth slowed down, and zinc prices fell significantly; In mid August, data showed a decrease in unemployment in the United States, and the resilience of the labor market supported the economy by driving retail sales and housing construction. Zinc prices stopped falling and rose in mid August. At the end of August, data showed that the number of new jobs created by American companies in August hit a new low in five months, further indicating signs of slowing labor demand. In addition, the PMI data for August in the United States showed poor performance, and the unexpected decline in the service industry had a huge impact on the economy. The manufacturing PMI decreased from 49.0 in July to 47.0, marking the fourth consecutive month of contraction and the economy approaching stagnation. Zinc prices may fluctuate and consolidate in the future.

China Manufacturing Purchasing Managers Index

According to data released by the National Bureau of Statistics, in August, the Purchasing Managers’ Index (PMI) of the manufacturing industry was 49.7%, an increase of 0.4 percentage points from the previous month, further improving the level of manufacturing prosperity. Production demand has rebounded synchronously, and the willingness of enterprises to purchase has increased. The non-ferrous metal market is positive, and zinc prices have stopped falling and rising.

Overview of zinc market situation

In terms of policies, the three departments have issued documents stating that they will reasonably increase consumer credit support for products such as automobiles, home appliances, and home furnishings, continuously optimize interest rates and fee levels, stimulate domestic consumption, and benefit the zinc market. On the supply side, with the increase in zinc concentrate processing costs and the stimulation of smelting profits, some smelters have completed or postponed maintenance. In early August, domestic zinc production was slightly higher than expected compared to the previous month. With the decline in zinc prices, zinc concentrate processing costs have stabilized, and domestic smelters have concentrated maintenance, resulting in a decline in zinc market output. In late August, markets such as Shanghai and Tianjin experienced significant shortages, and the rise in zinc prices has been positive. In terms of demand, downstream demand is basically maintained, but due to the tightening of spot supply, downstream willingness to “buy up” has increased. In addition, the continuous promotion of some consumer promotion measures has driven social inventory to go out of stock. Support for the rise of zinc prices in the future remains

Future Market Forecast

Data analysts from Business Society believe that the macroeconomic performance did not meet expectations, and zinc prices fell in August. However, with more positive news, zinc prices stopped falling and rose. In the future, with the arrival of the traditional peak season of “nine gold and ten silver”, the demand for zinc is expected to improve. However, national policies stimulate economic recovery, accumulate social inventory in the zinc market, and overall zinc supply weakens, demand recovers, and positive news increases. However, the performance of the US economic data is less than expected, which to some extent limits the room for zinc prices to rise. It is expected that zinc prices will fluctuate and consolidate at high levels in the future

Price trend

According to the Commodity Market Analysis System of the Business Society, the price trend of cryolite in Henan region continues to be stable. On August 30th, the average market price in Henan region was 7850 yuan/ton, which is the same as the average price of 7850 yuan/ton on August 21st, with a year-on-year increase of 2.28%.

quotations analysis

In late August, the price trend of cryolite remained stable, and the manufacturer’s quotation remained unchanged. The upstream price of cryolite has risen, leading to an increase in production costs and a firm quotation from enterprises. However, downstream companies are more resistant to high priced cryolite and have less enthusiasm for purchasing in the market. Although cryolite manufacturers maintain rational inventory, their quotations are difficult to rise. Manufacturers negotiate shipment, and the market mentality is to wait and see. As of August 30th, the factory quotation for cryolite in Shandong region is 7000-8600 yuan/ton; The factory quotation for cryolite in Henan region is between 7200-8900 yuan/ton.

The upstream fluorite market has risen, with an average market price of 3168.75 yuan/ton as of August 30, an increase of 1.60% compared to the price of 3118.75 yuan/ton as of August 21. Due to increasingly strict safety and environmental requirements faced by mining enterprises, the operating rate of the domestic fluorite industry remains low, while difficulties in starting raw ore production and restrictions on raw materials have led to tight inventory of fluorite enterprises, tight market spot supply, and an upward trend in fluorite prices.

The downstream aluminum market continued to fluctuate and rise. On August 30th, the aluminum price was around 19043.33 yuan/ton, an increase of 2.29% compared to the price of 18616.67 yuan/ton on August 21st. On the 23rd, the coal mine was affected by a dangerous accident, leading to a rise in coal prices, which has brought expectations of a certain cost increase to the electricity consuming and aluminum industries. At the same time, downstream demand has slightly rebounded, bringing good news to the market, and the aluminum price trend is relatively strong.

Future Market Forecast

Cryolite enterprises maintain rational inventory, manufacturers actively ship, downstream demand is average, market trading atmosphere is weak, raw material construction continues to be low, prices rise strongly, and support for cryolite is good. At the same time, the downstream aluminum market is also operating strongly, and with cost support, it is expected that the cryolite market may consolidate and rise in the future. Specific attention should be paid to changes in manufacturer inventory and downstream acceptance.

According to the analysis system of the commodity market of the Business Society, as of August 29th, the average price of PMMA, a general transparent and high-quality product in China, was 14625.00 yuan/ton. This week, PMMA prices remained stable and maintained the previous trend, with no significant price fluctuations. Downstream purchases were mainly for immediate needs.

This week, the domestic general transparent grade premium product PMMA has been operating smoothly, compared to the same period last week when prices remained stable. The purchasing atmosphere is cold, and downstream demand is average. Currently, the quotation range of mainstream manufacturers is still around 14600 yuan/ton. The operating rate is stable, and the overall market supply and demand is balanced. Factories are offering discounts and taking orders, and downstream purchases are just needed.

Rubber and Plastic Index: On August 28th, the rubber and plastic index stood at 677 points, unchanged from yesterday, a decrease of 36.13% from the cycle’s highest point of 1060 points (2012-03-14), and an increase of 28.22% from the lowest point of 528 points on April 6, 2020. (Note: The cycle refers to the period from December 1st, 2011 to the present).

PMMA analysts from Business Society believe that PMMA will mainly maintain stable operation in the short term.

Recent price trends of isooctanol

According to the Commodity Analysis System of Business Society, the domestic tetrahydrofuran market price has temporarily stabilized this week. The average price of tetrahydrofuran in the mainstream domestic market this week is 12675.00 yuan/ton. Weekend prices fell by 14.65% year-on-year.

Upstream support is good, while downstream demand is average

From the supply side perspective, the prices of mainstream domestic tetrahydrofuran distributors are temporarily stable this week, with average inventory levels.

From the upstream raw material market of tetrahydrofuran, the market for 1,4-butanediol has slightly declined this week, with prices dropping from 11528.57 yuan/ton at the beginning of the week to 11485.71 yuan/ton at the end of the week, a decrease of 0.37%. Weekend prices increased by 13.02% year-on-year. The market situation of maleic anhydride has slightly increased this week, with prices rising from 7160 yuan/ton at the beginning of the week to 7360 yuan/ton at the weekend, an increase of 2.79%. Weekend prices fell by 4.17% year-on-year. Overall, the upstream raw material market prices have slightly increased, with good cost support. Affected by the supply and demand side, it has a positive impact on the price of tetrahydrofuran.

From the downstream market situation of tetrahydrofuran, the spandex market price has stabilized at a high level this week. The price of spandex is 33625.00 yuan/ton. Weekend prices increased by 2.67% year-on-year. Downstream spandex market prices have stabilized at high levels, and downstream customers are actively purchasing tetrahydrofuran.

Future prospects

In late August, the domestic tetrahydrofuran market may experience slight fluctuations and gains. The upstream maleic anhydride market has slightly increased, with good cost support. The downstream spandex market has stabilized at a high level, and downstream demand is good. Business Society tetrahydrofuran analysts believe that in the short term, the domestic tetrahydrofuran market may fluctuate slightly and rise mainly due to various factors such as supply and demand and raw materials.

Price trend

This week, the domestic EVA market remained stable, with spot prices hovering at high levels. According to data monitoring from Business Society, as of August 25th, the average factory price of EVA in China was 14000 yuan/ton, an increase of 2.69% compared to the beginning of the month.

Cause analysis

The domestic EVA market has stabilized slightly this week. On the supply side, the operating rate of the EVA industry has decreased compared to last week, and the overall load position is around 68%. The market supply is relatively low, and factory inventory pressure is still acceptable. The profitability of EVA polymerization plants fluctuates broadly within a narrow range, while factory prices remain stable. The social inventory pressure is average, and the confidence of traders is supported by aggregation factories and tends to be stable. On the demand side, there has been no improvement in the current support for EVA price on the demand side compared to the previous period. The maintenance of demand for photovoltaic materials and the phased stocking of terminal enterprises are the main support for the demand side. The follow-up of foam materials towards terminal enterprises lags behind, resulting in low actual prices and consumption maintaining at off-season levels, dragging down the overall demand side of EVA. The overall stock preparation operation on the site is clearly differentiated, and this week, companies have a moderate acceptance of high priced goods, with prices mainly operating horizontally.

Overall, the supply of EVA in the market has decreased significantly this week, and the downstream demand side is still driven by the main force of photovoltaics. Overall, companies mainly offer stable prices, with merchants following the market, while some photovoltaic offers have increased. The continuous poor demand for foaming has dragged down the overall market. It is expected that in the short term, the domestic EVA market may continue to fluctuate in a narrow range due to the continuation of the game market.