September 14, the Asian region ethylene market prices stabilized, CFR Northeast Asia closing price unchanged, to close at 1314-1316 US dollars / ton; CFR Southeast Asia closing price unchanged, to close at 1199-1201 US dollars / ton.

September 14, the US regional ethylene market closing price rose 11 US dollars / ton, FD US Gulf prices closed at 683-694 US dollars / ton.

September 14, the European ethylene market closing prices were mixed, FD Northwest Europe prices rose 1 euro / ton to close at 1018-1023 euros / ton; CIF Northwest Europe prices fell 1 US dollars / ton, to close at 1198-1202 US dollars /Ton.

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.