According to the Commodity Market Analysis System of Shengyi Society, from July 29th to August 2nd, the average price of BDO in China fell from 8942 yuan/ton to 8842 yuan/ton, with a price drop of 1.12% during the period and a year-on-year decline of 20.13%. Recently, some devices have been shut down for maintenance and replacement, resulting in a decline in the overall operating rate of the industry. But the downstream industry load has also decreased, resulting in a reduction in the digestion of raw materials. Manufacturers holding goods are under pressure to ship, and negotiations for discounts on actual orders are underway to promote sales. The market center of gravity is fluctuating downward.

On the supply side and in terms of equipment, the industry’s capacity utilization rate has decreased, and suppliers are mainly inclined to maintain prices. The supply of BDO is affected by favorable factors.

In terms of cost, raw material calcium carbide: there has been a significant increase in the supply of calcium carbide, and there has been a noticeable recovery and improvement in the operation of supporting calcium carbide equipment. At the same time, the early maintenance of the calcium carbide furnace has been completed, resulting in an overall increase in supply. The calcium carbide market is running abnormally low. Raw material methanol: The methanol market is experiencing a narrow consolidation. As of 10:00 am on August 2nd, the domestic methanol Taicang price is 2510 yuan/ton. The cost impact of BDO is mixed.

On the demand side, although the downstream PTMEG industry has slightly increased with the increase of maintenance equipment load, and the TPU and PU slurry load in the polyurethane field has also increased, the second largest downstream PBT industry has experienced a significant decline in load due to the impact of some equipment load reduction production. The demand side has reduced the amount of raw material digestion, and the supply-demand contradiction still exists. At the same time, downstream industries such as THF, PBT, GBL, PBAT are experiencing a decline in market conditions, leading to poor transmission of industrial chain costs and severe pressure on raw material prices. The demand side of BDO is affected by bearish factors.

Market forecast shows that some maintenance equipment will operate at a reduced load after restarting, leading to an increase in market supply. Downstream industries are experiencing both negative and negative impacts, and overall demand has also increased. However, the supply-demand imbalance continues, putting pressure on manufacturers’ shipments. Business analyst BDO predicts that the domestic BDO market will mainly operate weakly.

Aluminum prices fell by 5.68% in July

Aluminum prices continued to decline in July. According to the Commodity Market Analysis System of Shengyi Society, the average price of domestic aluminum ingots in the East China market on July 31, 2024 was 18986.67 yuan/ton, a decrease of 5.68% from the market average price of 20130 yuan/ton at the beginning of the month (July 1).

Reasons for the decline in July

1. Overseas economic data has hit hard on expectations of interest rate cuts, and the market no longer fully expects the Federal Reserve to cut interest rates in November. At the macro level, international commodity prices have been suppressed, and non-ferrous metal prices have retreated.

2. Weakening overseas data triggers recession expectations, while CPI data gradually raises market expectations of a weakening US economy. The Federal Reserve’s Beige Book shows that businesses expect future growth to slow down and the labor market to remain weak. The production of primary processed aluminum products in the United States has decreased, and the demand for aluminum ingots has maintained a low season performance.

On the domestic front, the economic data for the second quarter was released, with a GDP of 4.7%, which was lower than expected. Domestic downstream inventory replenishment and falsification, and inventory removal is not smooth. As of July 29th, the inventory of electrolytic aluminum in major domestic markets was 795000 tons, unchanged from the inventory of 795000 tons on June 3rd; Compared to July 1st, the inventory was 762000 tons, with a cumulative inventory of 33000 tons.

Summary of favorable factors in August

1. Domestic macro factors: Recently, the central bank has taken frequent easing measures, such as lowering the quoted interest rates for one-year and five-year loan markets. Subsequently, several banks announced the reduction of deposit interest rates, and some banks in Shanghai and Beijing began to lower mortgage interest rates. The National Development and Reform Commission and the Ministry of Finance issued the “Several Measures on Strengthening Support for Large scale Equipment Renewal and Consumer Goods Trade in”, and arranged about 300 billion yuan of ultra long-term special treasury bond funds for support.

Currently, the price of aluminum ingots has fallen to near the marginal cost, and the upstream raw material market is tight, which provides some support for the price.

Supply and demand dynamics in August

The Yunnan and Inner Mongolia projects have completed their resumption of production, and a factory in Sichuan plans to resume production of 12.5W by the end of July, with a planned duration of two months. The import window is currently closed.

Aluminum prices may stabilize and stop falling in August

At present, aluminum prices have fallen below the level of 19000 yuan, and downstream acceptance has increased. It is expected that aluminum prices may stabilize and stop falling in August.

1、 Trend analysis

According to monitoring data from Business Society, there was a high volatility followed by a decline. As of the end of the month, the copper price at the beginning of the month was 77831.67 yuan/ton. At the end of the month, the copper price fell to 73223.33 yuan/ton, with an overall decline of 5.92% and a year-on-year increase of 6.11%.

According to the current chart of Shengyi Society, copper futures prices in July were mostly higher than spot prices, and the main contract is the expected price two months later. The overall copper price is bearish in the future.

According to LME inventory, LME copper inventory increased significantly in July. As of the end of the month, LME copper inventory was 239400 tons, up 32.96% from the beginning of the month, hitting a new low in recent years.

Macroscopically, the US S&P Global Manufacturing PMI fell to 49.5 in July. The European and American regions have released the Purchasing Managers’ Index (PMI) for the manufacturing industry, which shows that the index is lower than expected and previous values, triggering market concerns about the possibility of overseas economies falling into recession. The pessimistic sentiment in the global financial market continues to ferment, and China’s important conference has not released the stimulus policies expected by the market, which has dampened investor confidence. But the actual GDP of the United States in the second quarter was 2.8%, higher than expected and previous values, easing pessimistic sentiment towards demand.

On the supply side, domestic copper production steadily increased in June, reaching 1.005 million tons, a year-on-year increase of 9.5%. The estimated production for July is 1.00166 million tons. Domestic electrolytic copper smelting enterprises have not been affected by the shortage of copper mines, and their production has increased instead of decreased. The maintenance period of domestic smelters has come to an end. After the early maintenance enterprises resumed production, they began to ramp up production, while other smelters were producing normally, resulting in a month on month increase in production.

Downstream: The flat demand for cables has limited consumer demand, and the sustained high copper prices have put significant pressure on terminal consumption. Even if the copper price drops in July and stimulates a rebound in cable consumption, it will be difficult to effectively generate consumer demand in August. The domestic air conditioning industry has shown positive production and sales performance in the first half of this year. July has clearly entered the off-season for air conditioning industry production, and August remains the off-season for air conditioning industry production and sales. The characteristics of the off-season will continue. The overall production and sales performance of the domestic automotive industry is better than previous years, and the production of new energy vehicles has continued to rebound since March, driving the overall performance of the automotive industry.

Imports: The import volume of unprocessed copper and copper materials in China in June was 436000 tons, and the import volume of unprocessed copper and copper materials from January to June was 2.763 million tons, a year-on-year increase of 6.8%.

According to the annual price comparison chart of Shengyi Society, in the past five years, copper prices have fallen more than risen in July.

The largest copper mine strike

The mining giant BHP’s Escondida copper mine in Chile is the world’s largest copper mine, and its union is calling on its nearly 2400 members to reject the company’s final contract offer and prepare for a strike.

Based on the above situation, the expectation of the Federal Reserve cutting interest rates is expected to strike again, and the volatility of the US dollar may increase in August. Fundamentally, refineries will once again face pressure on raw material supply. In terms of demand, the off-season characteristics of consumption are obvious. Except for the stable demand in the automotive industry, other terminal copper ports are difficult to have substantial demand pull. The insufficient increment and frequent disturbances on the supply side, as well as the growth in demand for new energy and overseas infrastructure, have limited the potential for a deep decline in copper prices. Short term copper mine disturbance, copper prices may rebound at a low level, but overall demand is limited, and it is expected that copper prices will mainly fluctuate within the range in August.

This week (7.20-7.26), the domestic price of ethyl acetate first rose and then fell. According to the Commodity Market Analysis System of Shengyi Society, as of the 26th, the price of ethyl acetate was 6243.33 yuan/ton, a decrease of 0.11% compared to the price of 6250.00 yuan/ton on July 20th. The main reason for the volatile operation of the ethyl acetate market is the positive news on the supply side, the negative market situation on the cost side, and the game of mentality in the market.

Market analysis: The price range of ethyl acetate fluctuated this week. In the early stage, the main factories in Shandong stopped production, which provided favorable support from the supply side. In addition, the overall operating rate of the market was not high, and enterprise quotations rose sharply, resulting in a slight increase in the ethyl acetate market; Afterwards, with the recovery of Yankuang’s ethyl acetate plant, the market capacity utilization rate improved. Coupled with the downward adjustment of the upstream acetic acid market, the atmosphere in the market was bearish, and the price of ethyl acetate fell. The price trend of ethyl acetate first rose and then fell during the week.

Looking at the future, the upstream raw material prices of ethyl acetate have fallen, the cost side is bearish, and the market mentality of ethyl acetate is not good; The downstream side mainly consumes inventory, and follows up on demand when entering the market, with limited support from the demand side; On the supply side, low production may provide some support for prices, and it is expected that the ethyl acetate market will experience weak consolidation in the later stage. Please pay attention to the price execution of raw materials such as acetic acid and ethyl acetate manufacturers.

1、 Price trend

According to the Commodity Market Analysis System of Shengyi Society, as of July 26th, the reference average price of the domestic urea market was 2313 yuan/ton, which is 1.95% lower than the reference average price of 2359 yuan/ton on July 22nd.

2、 Market analysis

market conditions

This week, the domestic urea market prices have weakened and fallen. As of July 26th, the ex factory price of urea in Shandong region is around 2090-2130 yuan/ton, in Hebei region it is around 2120 yuan/ton, and in Henan region it is around 2140 yuan/ton.

Supply and demand situation

In terms of supply, the urea market currently has a relatively sufficient supply, with oversupply being the main factor. In terms of demand, the current agricultural demand is weakening, and downstream compound fertilizers are purchased on demand, with small quantities received and many low-priced transactions.

3、 Future forecast

The urea analyst from Shengyi Society believes that the recent downward trend in the urea market has led to a lack of trading atmosphere in the market. At present, there is no positive news in the market, waiting for the release of terminal demand. It is expected that the domestic urea market prices will continue to weaken and decline in the short term.