1、 Trend analysis

According to monitoring data from Business Society, copper prices fell first and then rose in January. At the beginning of the month, the copper price was 69250 yuan/ton. At the end of the month, the copper price dropped to 69145 yuan/ton, with an overall decline of 0.15%, a year-on-year decrease of 0.56%.

According to the current chart of the Business Society, copper spot prices were generally higher than futures prices in the first and middle of January. The main contract is the expected price in two months, and the overall copper price in the future is bearish. However, in late January, the main contract price was higher than the spot price, indicating a bullish outlook on copper prices in the future.

According to LME inventory, LME copper inventory slightly decreased in January. As of the end of the month, LME copper inventory was 146475 tons, a decrease of 11.6% compared to the beginning of the month. LME copper has been destocked due to disruptions in the Red Sea shipping industry, but the extent of destocking has been largely offset by the accumulated inventory of domestic exchanges and bonded ports.

Macroscopically, in the early stages, copper prices rapidly lowered due to the optimistic expectations of the Federal Reserve cutting interest rates too quickly, the rapid rebound of the US dollar index, and the pressure of China’s January MLF rate cut failing; With the full reflection of early pressure, the US dollar index falling into volatility, and the strengthening of mining support, copper prices have begun to stop falling and rebound, especially with the news of the sudden 0.5 percentage point reduction in reserve requirements by the People’s Bank of China, copper prices have seen a significant rise.

On the supply side

In the past two months, the processing cost of copper concentrate has significantly fallen, considering the closure of some large overseas mines in the early stage, the market’s expectation of supply shortage has increased. However, based on the domestic refined copper production data in December last year, despite a decrease in operating rates, the production remained relatively high and did not show a significant decrease

The refined copper (electrolytic copper) production in December was 1.169 million tons, a year-on-year increase of 16.6%; The cumulative production from January to December was 12.988 million tons, a year-on-year increase of 13.5%.

Downstream aspect

Under normal circumstances, domestic social inventory began to increase around three weeks before the Spring Festival, but before this year’s Spring Festival, there was no significant accumulation of domestic social inventory, indicating that downstream enterprises are still buying on dips. Among them, air conditioning companies saw a higher than expected increase in production in January, and demand for copper pipes will continue to remain strong. Copper pipe companies increased their raw material inventory on dips. As the year-end approaches, downstream stocking efforts and pace have slowed down. However, strong overseas economic data has driven the market from interest rate cuts to expectations of a “soft landing”. In the case of stable actual supply, a tight balance sheet indicates that demand is still at a good level.

Comparison chart of annual copper prices

According to the annual price comparison chart of copper, in the past five years, except for the decline in copper prices in February 2020 due to the epidemic, copper prices in February of other years have been relatively strong.

Overall, from the supply side, the supply of copper concentrate is tight, and TC is rapidly falling, which will affect the production of refined copper in the later stage. This indicates that there is a cumulative increase in inventory before and after the holiday, but the inventory increase may be lower than expected, and the speed of enterprise destocking after the holiday may be faster, which will form upward support for prices. This year’s Spring Festival processing enterprises did not have any extended holidays, which is basically similar to last year’s situation, indicating that the expectation of replenishing inventory for enterprises is strong after the holiday. From a macro perspective, the IMF has raised its global economic growth forecast for 2024, believing that the possibility of a “hard landing” in the economy has decreased, and the expectation of long-term interest rate cuts by the Federal Reserve still exists. It is expected that market liquidity will continue to increase. At the same time, the release of favorable policies in China will continuously enhance investor confidence. Therefore, copper prices are expected to perform stronger in the first quarter after the Spring Festival holiday.

According to the bulk list data of Business Society, as of January 31, 2024, the reference price for diethylene glycol in the domestic market was 5660 yuan/ton, a decrease of 6.67 yuan/ton or 0.12% compared to the price as of December 31, 2023 (reference price for diethylene glycol is 5666.67 yuan/ton).

From the data monitoring of Business Society, it can be seen that in January, the domestic diethylene glycol market first fell and then rose, showing an overall fluctuating pattern in a range. In the first half of January, the number of ships arriving at the port was concentrated and large. The surplus in December and the goods of this month were interspersed into the port and warehouse. During the off-season of demand, the downstream could not consume all of the ship’s cargo, resulting in a clear increase in inventory. The positive supply in the early stage dissipated, and although there was no obvious bearish trend leading to a decline, the operators still handled this change with caution. Under the guidance of supply and demand logic, the mentality of the operators fell, and the weak range of diethylene glycol in the East China market fluctuated narrowly. After the middle of the month, downstream stocking began, and the shipment volume exceeded the expectations of the industry to a certain extent. Under the guidance of demand logic, the influence of concentrated delivery weakened, and market sentiment was optimistic. Holding merchants reported an increase in prices. In the latter half of the year, the changes in supply and demand were limited, with narrow fluctuations in main port inventory. The overall demand for stocking remained stable, and the market sentiment was mainly affected by shipping conditions. Prices fluctuated within a range of 100 yuan, but with downstream factories gradually stopping for holidays and expectations of weak demand, the market sentiment was cautious. As of the close on the 31st, spot prices in East China closed at 5650-5670 yuan/ton, while spot prices in South China closed at 5790-5810 yuan/ton.

Market forecast: Currently, the main downstream unsaturated resins are mostly shut down, and there is a slight demand for polyester polyurethane during the pre holiday consolidation stage. The lower reaches of South China have basically closed, and the transactions of the holders have come to a close; The demand margin in the East China market is insufficient, and operators are waiting for the market to close, and trading sentiment will gradually cool down. However, the current supply of diethylene glycol is stable, and the supply and demand structure is loose. According to analysts from Shengyishe, the recent trend of domestic diethylene glycol spot prices has loosened, and there is further room for market pressure to fall back.

According to monitoring data from Business Society, as of January 31, 2023, the reference price of n-butanol in Shandong Province, China was 8816 yuan/ton. Compared with January 1 (reference price of n-butanol was 8700 yuan/ton), the price increased by 116 yuan/ton, an increase of 1.34%.

From the monitoring chart of Business Society data, it can be seen that in January, the overall n-butanol market in Shandong Province, China, experienced a slight increase and end in a fluctuating upward and downward trend. In early January, the n-butanol market experienced mixed ups and downs. At the beginning of the month, the trading atmosphere in the n-butanol alcohol field was light, with limited transactions, and the n-butanol market was weakly declining. With the shutdown and maintenance of some devices in the n-butanol field, the supply of n-butanol was reduced, and downstream inquiries were active. With the support of supply and demand, the n-butanol market was facing an upward trend. In the middle of the month, some facilities resumed production, and the supply of n-butanol gradually relaxed, weakening market support, and the n-butanol market began to decline. As of January 15th, the domestic market price of n-butanol in Shandong region was around 8700-8800 yuan/ton, with an increase of 0.57% in the first half of the year.

In late January, the n-butanol market continued to fluctuate frequently, and the overall market showed a fluctuating upward trend. In the latter half of the year, some units shut down again, and the supply of n-butanol was slightly tight. Starting from the 19th, the overall market price of n-butanol saw a brief upward trend. As the end of the month approaches, many downstream users are entering the Spring Festival stocking cycle, and the overall market atmosphere is good, driving the focus of the n-butanol market up. As of January 31st, the market price of n-butanol in Shandong Province, China, was around 8800-8900 yuan/ton, with a 1.93% increase in the latter half of the year.

Future analysis

At present, the trading atmosphere in the n-butanol market is mild, and there are still some users stocking up on the downstream demand side of n-butanol. The overall inquiry atmosphere in the market is good. The n-butanol data analyst from Business Society believes that in the short term, the domestic n-butanol market in Shandong region will mostly operate steadily with a strong bias, and the specific trend still needs to pay more attention to changes in supply and demand news.

According to the commodity market analysis system of Shengyishe, the price of acetic acid first rose and then fell in late January. On January 30th, the average market price of acetic acid was 300 yuan/ton, an increase of 50 yuan/ton compared to the price of 3250 yuan/ton on January 21st, an increase of 1.54%.

In late January, the acetic acid market first rose and then fell, consolidating and operating. In the early stage, due to frequent failures of acetic acid plants in the north and low inventory of manufacturers, acetic acid prices were quite high. However, demand was weak and mainly purchased according to demand. In the mid-term, acetic acid prices remained stable. Later, with the restart of some plants, market supply increased, and coupled with insufficient downstream procurement, acetic acid prices were adjusted downward under the supply-demand game. As of January 30th, the market prices of acetic acid in various regions are as follows:

Region/ January 21st/ January 30th/ Rise and fall

South China region/ 3050 yuan/ton/ 3125 yuan/ton/ seventy-five

North China region/ 3090 yuan/ton/ 3325 yuan/ton/ two hundred and thirty-five

Shandong region/ 3150 yuan/ton/ 3300 yuan/ton/ one hundred and fifty

Jiangsu region/ 3000 yuan/ton/ 3125 yuan/ton/ one hundred and twenty-five

Zhejiang region/ 3100 yuan/ton/ 3225 yuan/ton/ one hundred and twenty-five

The upstream raw material methanol market fluctuated and rose. On January 30th, the average price in the domestic market was 2571.67 yuan/ton, an overall increase of 5.18% compared to the price of 2445.00 yuan/ton on January 21st. Part of the enterprise facilities on the site have been shut down, and there are relatively few socially available spot goods. In addition, factors such as weather have affected the unloading speed. At the same time, the transportation cost from the northwest production area to the sales area market has increased, leading to a significant increase in domestic methanol prices. As supply gradually recovers, downstream receiving sentiment is average, and the market is mainly wait-and-see.

The downstream acetic anhydride market is showing a strong upward trend. On January 30th, the factory price of acetic anhydride was 5925 yuan/ton, an increase of 1.72% compared to the price of 5825 yuan/ton on January 21st. In the early stage, the acetic acid equipment in Yankuang Lunan was shut down, resulting in a decrease in acetic acid supply and a rise in prices driven by raw materials. At the same time, the production of acetic anhydride enterprises was suspended, resulting in insufficient supply and a strong operation of acetic anhydride prices. In the later stage, cost support weakened, and downstream demand for acetic acid was average, resulting in a slight decrease in prices.

In the future market forecast, the acetic acid analyst from Shengyishe believes that currently, acetic acid enterprises mainly have low inventory, and manufacturers maintain tight shipments before the holiday. However, downstream demand is insufficient, and the enthusiasm for pre holiday stocking is weak. The market trading atmosphere is weak, and under the supply-demand game, it is expected that the short-term acetic acid market will remain stagnant and the pre holiday price will fluctuate slightly.

According to the monitoring of the commodity market analysis system of Business Society, the 1 # tin ingot market in East China rose this week (1.19-1.26), with an average market price of 214160 yuan/ton at the beginning of last week and 222510 yuan/ton at the beginning of this week, a weekly increase of 3.9%.

K-bar chart of commodity prices, using the concept of price trend K-line, reflects the weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations. From the monthly K-bar chart, it can be seen that after November 2022, tin prices have been continuously rising for three months due to macroeconomic factors. Since February 2023, prices have fallen by 11.35% in a single month, and the trend of tin prices has fluctuated narrowly in the past three months. From the weekly K-bar chart, it can be seen that the tin ingot market has seen more ups and downs in recent times.

In the futures market, the upward trend continues within the cycle, but as prices rise, the wait-and-see mentality of the spot market gradually arises, with a certain resistance to high prices. As downstream stocking demand gradually weakens. Recently, market trading has been relatively light. In terms of supply, the tight supply pattern at the mining end continues, and it has been further tightened recently. Recently, tin ore processing fees have been reduced by 1000 yuan/metal ton per month, and the latest customs data shows that the import volume of tin concentrate in December has significantly decreased by 41%, boosting market sentiment. In terms of demand, as the spot market continues to rise, the enthusiasm for downstream entry into the market has significantly weakened. As the holiday approaches, downstream stocking demand has further tightened. Currently, the overall attitude is cautious and wait-and-see. In the long run, the market generally believes that domestic integrated circuit production will continue to rebound in the future, and market expectations are improving compared to the previous period. Overall, there is still purchasing demand downstream in the short term, but high prices have constrained some of the demand. Without demand support, it is expected that the tin ingot market will operate steadily and weakly in the short term. In the long run, market expectations are still acceptable, and there may be some upward potential in the tin ingot market after the holiday.

Related data:

On January 28th, the base metal index was 1183 points, unchanged from yesterday, a decrease of 26.79% from the highest point in the cycle of 1616 points (2022-03-09), and an increase of 84.27% from the lowest point of 642 points on November 24th, 2015. (Note: The cycle refers to 2011-12-01 present).

On January 28th, the non-ferrous index was 1104 points, unchanged from yesterday, a decrease of 28.22% from the highest point in the cycle of 1538 points (2021-10-18), and an increase of 81.88% from the lowest point of 607 points on November 24th, 2015. (Note: The cycle refers to 2011-12-01 present).

According to the price monitoring of Business Society, in the 4th week of 2024 (1.22-1.26), there were a total of 8 commodities in the non-ferrous sector that showed a month on month increase in commodity prices. The top 3 commodities with the highest increase were tin (3.95%), nickel (2.95%), and zinc (2.61%). There are a total of 7 products with a month on month decline, and the top 3 products with the largest decline are dysprosium oxide (-1.03%), lead (-0.79%), and praseodymium neodymium oxide (-0.62%). The average increase and decrease this week was 0.49%.

According to the analysis system of the commodity market of Shengyishe, as of January 29th, the average price of PMMA, a general transparent grade premium product in China, was 15666.67 yuan/ton. In January, the overall price of PMMA increased by 5.86%, reaching around 1000 yuan/ton. Currently, the focus of negotiations is relatively high.

In January, the overall PMMA market showed an upward trend. The price at the beginning of January was 14800 yuan/ton, and the price at the end of January was 15666.67 yuan/ton, an increase of 5.86%. The upstream acetone raw material price increased, and the cost support was favorable. PMMA prices were pushed up, and Zhejiang Petrochemical delayed the restart before the holiday. Some enterprises had temporary parking, resulting in a tight supply side and a slight increase in industry quotations. Currently, downstream demand is limited, and cost transmission is lagging, The shipment of terminal products is average, and the overall PMMA market quotation is relatively high. The downstream production of PMMA is mainly stable, and the focus of negotiations has shifted upwards.

On January 28th, the rubber index was 667 points, unchanged from yesterday, a decrease of 37.08% from the highest point in the cycle of 1060 points (2012-03-14), and an increase of 26.33% from the lowest point of 528 points on April 6th, 2020. (Note: The cycle refers to 2011-12-01 present).

PMMA analysts from Business Society believe that PMMA will maintain a stable, medium to strong trend in the short term. Upstream companies have delayed restarting, and some companies have temporarily stopped production. Currently, the supply side is tightening, and there is a shortage of spot supply. It is difficult for the supply side to recover in the short term, and the market still has some support,

The domestic propane market fluctuated and fell in January. According to data monitoring from Business Society, the average price of propane in Shandong’s market was 5588 yuan/ton on January 1st, and 5370 yuan/ton on January 26th. The monthly decline was 3.89%, a decrease of 12.49% compared to the same period last year.

As of January 26th, the mainstream prices of propane in different regions in China are as follows:

Region/ January 26th

East China region/ 5000-5250 yuan/ton

North China region/ 5200-5250 yuan/ton

Shandong region/ 5050-5250 yuan/ton

Northeast region/ 5000-5200 yuan/ton

The domestic propane market was weak and declined in January. At the beginning of the month, Saudi Arabia introduced a slight increase in CP in January, which slightly boosted the propane market and slightly boosted prices. Subsequently, due to sluggish downstream demand and active upstream buying, coupled with weak prices of crude oil and related liquefied gas, propane prices continued to decline under the pressure of bearish news. On site inventory is relatively high, with downstream buying on dips and upstream reducing prices to reduce inventory.

Saudi Aramco announced its CP in January 2024, with propane priced at $620 per ton, an increase of $10 per ton compared to the previous month; Butane costs $630 per ton, an increase of $10 per ton compared to the previous month.

Overall, there are signs of an upward trend in the propane market at the end of the month. As the Spring Festival approaches, the upstream is actively selling goods, while the downstream is not actively entering the market. The CP is about to be introduced in February, and we will closely monitor the external market trends. It is expected that the propane market will operate stronger in the short term.

The price of ortho xylene is temporarily stable this week

According to the Commodity Market Analysis System of Business Society, as of January 22, the price of ortho xylene was 7800 yuan/ton, which is temporarily stable compared to the price of ortho xylene on January 15, which was 7800 yuan/ton. The price of raw material mixed xylene fluctuates and rises, while the cost of ortho xylene increases; The price of phthalic anhydride has fluctuated and risen, downstream demand has rebounded, the industrial chain has strengthened, and the price of ortho xylene has temporarily stabilized, but the upward support has increased.

Increase in raw material mixed with xylene

According to the mixed xylene commodity market analysis system of Business Society, as of January 22, the price of mixed xylene was 7200 yuan/ton, an increase of 0.70% from the price of mixed xylene on January 15, which was 7150 yuan/ton. The price of crude oil has risen, the price of naphtha has fluctuated and risen, the cost of mixed xylene has increased, the price of mixed xylene has increased, the cost of ortho xylene has increased, and the driving force for the rise of ortho xylene has increased.

Downstream phthalic anhydride market rebounds

According to the Commodity Market Analysis System of Shengyishe, as of January 22, the quotation for ortho phthalic anhydride was 7625 yuan/ton, an increase of 0.49% from the price of 7587.50 yuan/ton on January 15. Downstream rigid demand procurement of phthalic anhydride, increased maintenance of phthalic anhydride units, rising prices of phthalic anhydride, and increased support for ortho benzene demand.

Future prospects

According to analysts from Business Society’s neighboring xylene data, the price of mixed xylene has increased this week, the cost of neighboring xylene has increased, and the price of phthalic anhydride has fluctuated and risen. The market of the ortho benzene industry chain has rebounded and strengthened. Overall, the cost of ortho benzene has risen, and the demand has rebounded. It is expected that the price of ortho benzene will rise in the future.

According to the monitoring of the Commodity Market Analysis System of Business Society, from January 12 to January 19, 2024, the domestic ex factory price of coal tar fell, with a price of 3645 yuan/ton on the 12th and 3602.5 yuan/ton on the 19th, a decrease of 1.17%.

From the monthly K-bar chart of coal tar, it can be seen that after entering 2023, the coal tar market has experienced more decline and less increase, with significant increases and decreases from January to May, and relatively small fluctuations in June and July. On a monthly basis, the market saw a broad decline of 19.37% in January, followed by a brief 13% rebound in February. In March, prices fell sharply again by 15.2%, and in April, the decline continued to expand to 36.91%. In May, the market rebounded significantly by 32%. The market performance in June and July was relatively stable, but after entering August, the market fluctuated greatly, with overall gains and losses. From September to October, the market maintained a narrow range of volatility, with five consecutive weeks of decline in mid October and a continuous decline from November to December. In recent times, the overall market has seen more declines than gains.

Note: The K-bar chart of commodity prices uses the concept of price trend candlestick to reflect weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations.

Supply: Coking enterprises have seen a decline in operating rates and supply is tight

From 2022 to present, we can see from the operating rate curve of independent coking enterprises in China that the operating rate of coking enterprises has decreased this week. After the implementation of two rounds of coke reduction, coking enterprises are currently experiencing losses, and some enterprises have voluntarily limited production, resulting in a significant decline in operating rate. The corresponding supply of coal tar has declined compared to the previous period, and the overall supply of coal tar has been tight recently.

Demand: The deep processing market is weak, and the market sentiment is weak

From the price list of the deep processing industry we monitored in December, it can be seen that this week, the prices of deep processing related commodities have fluctuated, with some commodity prices slightly decreasing and some commodity prices slightly recovering. However, the price market for some main commodities is still weak. As the Spring Festival approaches, there are certain stocking plans in the downstream market in the near future, and inquiries in the downstream market have significantly increased. Market trading has improved compared to the previous period, and by the weekend, the market atmosphere has significantly improved. In the future, it is expected that there will be a slight rebound in the tar market driven by downstream stocking, but the magnitude of the increase still needs to be monitored by the specific performance of downstream commodities.

According to the commodity market analysis system of Business Society, the PP market has continued to decline recently, with prices of various wire drawing brands decreasing. As of January 12th, the mainstream quoted price for T30S (wire drawing) by domestic producers and traders is around 7578.57 yuan/ton, with a decrease of -0.93% compared to the average price level at the beginning of the month.

Cause analysis

Industry chain: In terms of PP raw materials, news of international crude oil OPEC production reduction and other factors have supported the market, coupled with the recent sustained tension in shipping, prices have been supported and rising. The inventory of propylene remains low, with prices strengthening narrowly. The demand for propane in PDH has weakened and prices have loosened. The methanol market is relatively stable. Upstream raw materials fluctuate, and overall support for PP is average.

The raw material flow in all directions is average, and the cost side’s support for PP is temporarily stable. In terms of industry load, due to the return of production and maintenance of some production lines, the average load of the polypropylene industry this week was above 77%, which is higher than the previous period. The supply of goods remains abundant, with a narrow decline in inventory, and no improvement in on-site supply pressure. In terms of demand, the holiday situation of terminal enterprises has increased, and the comprehensive operating rate of downstream PP enterprises such as plastic weaving, film materials, and injection molding is less than 53%. Terminal enterprises maintain cautious operations in purchasing goods, with poor trading activity on the exchange and an overall weak market for wire drawing materials.

In terms of fiber materials, according to the commodity market analysis system of Business Society, as of January 12th, the spot price of domestic fiber PP has also increased. The mainstream quoted price for domestic producers and traders of Z30S (fiber) is around 7500 yuan/ton, with an increase or decrease of -2.28% compared to the average price at the beginning of the month, and a decrease of 4.46% compared to the same period last year. Recently, the main downstream non-woven fabric enterprises of PP fiber materials have seen significant and stable loads, with operating rates at around 39%. The digestion speed of end products is sideways, and the demand for fiber materials in the market is average, which lacks support for the price of non-woven fabrics. It is expected that downstream procurement efforts will not improve, and fibers may continue to be weakly sorted.

In terms of melt blown materials, the melt blown PP market has seen a narrow increase this week. As of January 12th, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of Shengyishe is about 7987.50 yuan/ton. Compared with the average price level at the beginning of the month, the price has increased or decreased by 1.08%, with a year-on-year decrease of 23.45%. At present, the demand for facial protection in China is generally high, and the impact of winter climate on the consumption of medical melt blown fabric materials is not significant. There is also no significant boost in domestic and foreign demand. In addition, there are not many new orders from downstream factories, resulting in a decrease in overall operating rates. It is expected that the melt blown material market will continue to be weak and stable.

Future Market Forecast

PP analysts from Business Society believe that the polypropylene market continues to decline narrowly this week. The trend of upstream raw materials is average, and the support for the market from the cost side is average. The production of terminal enterprises is relatively low, and the purchasing operation maintains weak and rigid demand. The PP plant load is once again rising, and it is feared that the supply pressure in the future will not improve. Coupled with factors of insufficient market buying, it is expected that the PP market may continue to operate weakly in the short term.