Aluminum prices first fell and then rose in mid to early September

 

Aluminum prices first fell and then rose in mid to early September. According to the Commodity Market Analysis System of Shengyi Society, as of September 20, 2024, the average price of aluminum ingots in the East China market in China was 19980 yuan/ton, an increase of 1.71% from the market average price of 19643.33 yuan/ton at the beginning of the month (September 1).

 

On September 20, 2024, the spot price of aluminum ingots (AL99.70) for China Aluminum Corporation Limited is as follows: the external quotation for the East China market is 19960 yuan/ton, the external quotation for the South China market is 19820 yuan/ton, the external quotation for the Southwest market is 19850 yuan/ton, and the external quotation for the Central Plains market is 19850 yuan/ton.

 

Changes in import and export tariffs

 

On September 13th, the Office of the United States Trade Representative stated that some of the 301 tariff policies will take effect on September 27th. This includes a 100% tariff on Chinese electric vehicles, a 50% tariff on Chinese solar cells, and a 25% tariff on Chinese steel, aluminum, electric vehicle batteries, and key minerals.

 

The list of goods subject to this tax increase has further expanded the scope of aluminum products subject to the 301 tariff imposed on China. At this point, aluminum products include aluminum scrap, aluminum powder, aluminum cables, undifferentiated aluminum structures, household aluminum appliances, aluminum ore and concentrates, unprocessed aluminum and aluminum alloys; Aluminum rods, profiles, and special-shaped materials; Aluminum wire; Aluminum strip; Aluminum foil; Aluminum tube; Aluminum pipes, almost all aluminum and its derivatives are included. It is reported that in addition to the 301 tariff, the United States has imposed high anti-dumping and countervailing duties on Chinese aluminum profiles, aluminum sheets, strips, foils and other products. The US Department of Commerce has ruled that the dumping rate of Chinese manufacturers/exporters is nearly 5%, and the tax rate for unqualified enterprises is 376%.

 

According to data from the General Administration of Customs of China, in July 2024, the domestic export of aluminum and its products was 861700 tons, of which exports to North America accounted for about 11% and exports to the United States accounted for about 8%.

 

The export consumption of aluminum terminals is mainly concentrated in new energy vehicles, photovoltaic frames, household aluminum doors and windows, etc. It is expected that the possibility of avoiding taxation solely through detours or assembly is low, and the export volume of aluminum and aluminum products from China to the United States may gradually decrease in the future.

 

Domestic inventory changes

 

In September, the overall inventory of the electrolytic aluminum plant area decreased, and the social inventory decreased significantly, resulting in a downward shift in overall inventory.

 

As of September 19th, incomplete statistics show that the main electrolytic aluminum plant inventory in China is 49000 tons, compared to 53000 tons on August 29th. Out of inventory is 4000 tons, but compared to 47000 tons on September 12th, the cumulative inventory is 2000 tons;

 

As of September 18th, the mainstream social inventory of aluminum ingots in China was 716000 tons, compared to the main factory inventory of 803000 tons on August 29th, with 87000 tons sold out.

 

Reasons for the rebound of aluminum prices in September

 

On the macro news front, the resonance between China and the United States’ PMI is downward, with the Federal Reserve cutting interest rates by 50BP in September and some central banks following suit.

 

2. The stock of raw material alumina is still tight, with low inventory. Overseas alumina transaction prices are accelerating their rise, while domestic prices are firm. The cost side is driving aluminum prices to improve.

Fundamental Overview

 

Supply side: The resumption of production in Yunnan region has been completed in the early stage, and the four major production areas of Shandong, Xinjiang, Inner Mongolia, and Yunnan have maintained full production. The output of electrolytic aluminum remains loose and stable in the short term. The mid-term variable focuses on the reduction of production during the dry season in Yunnan and other areas.

 

On the demand side: The continuous weakness of real estate completion data, coupled with a significant decline in the production of air conditioners and household refrigerators that are matched with it. The pessimistic expectation of demand is partly due to the seasonal off-season of household appliances, and partly due to the significant pressure on real estate completion and the strong negative feedback effect of aluminum consumption; More importantly, in terms of exports, the additional tariffs on new energy vehicles in the second half of the year may gradually be implemented, and photovoltaic exports are also facing certain pressure.

 

Import and Export: The United States has decided to impose tariffs on Chinese products, with a 100% increase in tariffs on electric vehicles and a 25% increase in tariffs on Chinese aluminum. In the first half of the year, the aluminum market has performed well in terms of export consumption, with impressive growth rates. With the implementation of the US tariffs, export consumption is likely to weaken, suppressing export consumption.

 

Future expectations

 

Recently, on the supply side, Yunnan electrolytic aluminum enterprises are nearing the end of their resumption of production, with high daily output and narrowed upward space; Overseas New Zealand direction, due to power shortages, supply has slightly decreased. On the demand side, downstream sectors have seen a rebound in operating rates, with electrolytic aluminum and aluminum rod inventories both experiencing a slight destocking. It is expected that supply and demand will stabilize in the short term, with the main focus on macro trading sentiment.

 

In the medium term, focusing on the supply tightening caused by the reduction in production during the dry season, the favorable supply side may be an important factor supporting the future strength of aluminum prices.

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According to the Commodity Market Analysis System of Shengyi Society, as of September 19, 2024, the reference price of n-butanol in Shandong Province, China was 6750 yuan/ton. Compared with September 13 (reference price of n-butanol was 6666 yuan/ton), the price has increased by 84 yuan/ton, an increase of 1.25%.

 

From the commodity market analysis system of Shengyi Society, it can be seen that in early September, the n-butanol market in Shandong Province, China, experienced a downward trend. After the return of the Mid-Autumn Festival, the n-butanol market in Shandong has finally warmed up. As of September 18, the n-butanol market in Shandong has referred to 6700-6800 yuan tons, and the post festival price has increased by 100-150 yuan tons.

 

Analysis of Factors Influencing the Market Situation of n-Butanol

 

On the supply side: After the holiday, some domestic n-butanol plants were unable to resume operation in a timely manner, and the overall operating rate of n-butanol has decreased compared to the previous period. The pressure on the n-butanol supply side has been reduced, and the n-butanol market has been boosted by supply support.

 

On the demand side: Currently, the downstream demand for n-butanol is relatively stable, with demand mainly focused on rigid procurement. The inquiry atmosphere on the demand side has become active, and the overall support for n-butanol on the demand side has also slightly improved.

 

Market price situation of n-butanol

 

Region/ Product/ September 19th

Shandong region/ N-butanol/ Around 6700-6800 yuan/ton

North China region/ N-butanol/ Around 6700-6800 yuan/ton

South China region/ N-butanol/ Around 7100-7200 yuan/ton

East China region/ N-butanol/ Around 6900-7000 yuan/ton

Market analysis in the future

 

At present, the confidence of n-butanol operators has improved, and the overall market atmosphere has rebounded. Business Society’s n-butanol data analyst believes that in the short term, the domestic n-butanol market will mainly operate steadily and warm, and the specific trend still needs to pay more attention to changes in supply and demand news.

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The price of ethylene glycol decreased in September

 

The price of ethylene glycol began to decline in September. According to data from Shengyi Society, as of September 18th, the average price of domestic oil to ethylene glycol was 4508.33 yuan/ton, a decrease of 3.63% from September 1st. The prices in each region are as follows:

 

On September 18, 2024, the operating price of ethylene glycol at the port was between 4420-4480 yuan/ton, and the basis of spot contracts remained basically stable during the day. This week, the paper cargo basis quotation was+24 to+28; In September, the base price will be quoted at+26 to+30 yuan/ton; Next week’s basis quotation will be+28 to+32 yuan/ton.

 

On September 18th, the price of coal to ethylene glycol slightly loosened, with prices in the northwest region ranging from 4150-4250 yuan/ton, including taxes.

 

On September 17, 2024, the external price of ethylene glycol was as follows: the landed price in China was $527/ton, and the landed price in Southeast Asia was $534/ton.

 

List of Ethylene Glycol Port Inventory Data for September

 

As of September 12, 2024, the total spot inventory of ethylene glycol in the main ports of East China was 548200 tons, a decrease of 25100 tons compared to the total spot inventory of 673300 tons on August 29.

 

From September 14, 2024 to September 17, 2024, during the Mid Autumn Festival holiday, the main stream storage area of Zhangjiagang Port shipped about 22000 tons of ethylene glycol, while the two main stream storage areas of Taicang shipped about 7500 tons of ethylene glycol.

 

Overview of Ethylene Glycol Fundamentals

 

Inventory changes: The absolute inventory of ethylene glycol at the port remains relatively low and is in a continuous state of destocking.

 

Device dynamics: Temporary shutdown of 80 MW in Zhejiang Petrochemical Phase II, expected to restart in the near future; Northern Chemical 20W is restarting this week and is expected to be discharged soon; Two sets of vehicles in Yongcheng, Henan, with a total capacity of 40w, will be parked from mid August and are currently being restarted; Yangmei Shouyang was shut down in mid August due to unforeseen circumstances, and the restart was postponed until the end of the month. In terms of overseas installations, Petronas 75W has recently shut down and resumed operation; A 38W unit in Saudi Arabia is undergoing maintenance and shutdown; A set of 83W equipment in South Asia, USA, was shut down for maintenance in mid August due to unforeseen circumstances and has been restarted this week.

 

Future expectations

 

Positive factors: Recently, the absolute amount of explicit inventory of ethylene glycol in ports is still relatively low. This provides some support for the price of ethylene glycol.

 

Negative factors: Other products in the polyester sector have basically fallen below the previous oscillation range, forming a strong negative sentiment towards the relatively strong ethylene glycol price, and the cost support is weak.

 

On the demand side, there may be a peak season that falls short of expectations, resulting in limited improvement in demand. At present, macro factors have a significant impact on prices, and it is expected that ethylene glycol prices will mainly fluctuate weakly in the short term.

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Aluminum prices first fell and then rose in mid to early September

 

Aluminum prices first fell and then rose in mid to early September. According to the Commodity Market Analysis System of Shengyi Society, as of September 13, 2024, the average price of aluminum ingots in the East China market in China was 19773.33 yuan/ton, an increase of 0.66% from the market average price of 19643.33 yuan/ton at the beginning of the month (September 1).

 

On September 13, 2024, the spot price of aluminum ingots (AL99.70) for China Aluminum Corporation Limited is as follows: the external quotation for the East China market is 19760 yuan/ton, the external quotation for the South China market is 19660 yuan/ton, the external quotation for the Southwest market is 19710 yuan/ton, and the external quotation for the Central Plains market is 19750 yuan/ton.

 

Monthly aluminum inventory changes

 

In September, the inventory in the electrolytic aluminum plant area continued to decrease, with a significant decrease in social inventory and an overall downward shift in inventory.

 

As of September 12th, incomplete statistics show that the main electrolytic aluminum plant inventory in China is 47000 tons, compared to 53000 tons on August 29th, and 6000 tons have been unloaded;

 

As of September 12th, the mainstream social inventory of aluminum ingots in China is 728000 tons, which is lower than the main factory inventory of 803000 tons on August 29th, with 75000 tons sold out.

 

Reasons for the rebound of aluminum prices in mid September

 

On the macro news front, the resonance between China and the United States’ PMI is downward, and the expectation of the Federal Reserve cutting interest rates still exists. As September 18th approaches, the trading expectation of the Federal Reserve’s news side is expected to rise.

 

2. The stock of raw material alumina is still tight, with low inventory and firm prices. The cost side is driving aluminum prices to improve.

 

Import and export news

 

On the 13th, the US government decided to significantly increase import tariffs on Chinese products, including raising tariffs on electric vehicles by 100% and imposing a 25% tariff on Chinese steel, aluminum, electric vehicle batteries, and key minerals.

 

Future expectations

 

1. Changes in medium and long-term demand and export expectations. Mainly due to the pessimistic long-term expectations in the downstream market, partly due to the seasonal off-season of household appliances, and partly due to the significant pressure on real estate completion, the negative feedback effect of aluminum consumption is strong; More importantly, in terms of exports, the additional tariffs on new energy vehicles in the second half of the year may gradually be implemented, and photovoltaic exports are also facing certain pressure.

 

Recently, on the supply side, Yunnan electrolytic aluminum enterprises are nearing the end of their resumption of production, with high daily output and narrowed upward space; Overseas New Zealand direction, due to power shortages, supply has slightly decreased. On the demand side, downstream sectors have seen a rebound in operating rates, with electrolytic aluminum and aluminum rod inventories both experiencing a slight destocking.

 

Overall, analysts from Shengyi Society believe that electrolytic aluminum will experience strong fluctuations in the short term, but the upward space is narrowing. In the short and long term, the performance will be mainly strong at first and then weak.

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According to the Commodity Market Analysis System of Shengyi Society, the domestic lithium carbonate market has continued to operate weakly since September. On September 11th, the average price of battery grade lithium carbonate was 78200 yuan/ton, a decrease of 10.73% from the same period last month when it was 87600 yuan/ton. The average price of industrial grade lithium carbonate is 75800 yuan/ton, a decrease of 10.82% from the same period last month when it was 85000 yuan/ton.

 

Downstream material factories’ golden September and silver October ‘have arrived, leading to an increase in production scheduling

 

September and October are the traditional peak seasons for downstream cathode material factories of lithium carbonate, with production increasing and lithium battery production increasing month on month, leading to a rebound in demand for lithium carbonate. According to research data from the top 20 battery factories, the output of power, energy storage, and consumer batteries in the Chinese market was around 110GWh in September, while the global market output of power, energy storage, and consumer batteries was around 135GWh in September.

 

The lithium salt plant has a stable operating status, and the total output remains at a high level

 

Driven by positive downstream demand, lithium salt plants continue to operate at a high level, while lithium salt plants at the spodumene end maintain a stable high operating rate to deliver long-term contracts; Due to the continuous decline in lithium carbonate prices, non integrated lithium salt factories have seen a decrease in production. The overall output is running steadily.

 

Business Society’s lithium carbonate data analyst believes that both supply and demand have increased, but the overall pattern of oversupply still puts pressure on lithium carbonate prices, and it is expected to continue to fluctuate weakly in the short term.

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