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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According to the analysis of the Business Society’s market monitoring system, on September 10th, the domestic market price of silicon metal # 441 was based on 11980 yuan/ton, which was basically the same as September 1st. Compared with August 1st (the market price of silicon metal # 441 was 12100 yuan/ton), the price decreased by 120 yuan/ton, a decrease of 0.99%.

 

According to the Business Society Market Analysis System, as we enter September, the domestic silicon metal market is generally stable and consolidating. At the end of August, the overall silicon metal market experienced a slight recovery. As we entered September, the market’s upward trend slowed down, and the spot market overall showed a stable and orderly operation. Market prices remained at the level after the August price adjustment. Currently, the market mainly delivers early orders. As of September 9th, the domestic market price reference for metal silicon 441 is around 11800-12300 yuan/ton.

 

In terms of supply and demand: Currently, the overall supply of the silicon metal market is still loose, and the downstream demand for silicon metal is generally average. The transmission of supply and demand is relatively slow. After a slight rise in the silicon metal market, there is still a certain wait-and-see attitude in the downstream, mainly digesting the previous inventory, and being cautious in new orders, mostly for essential orders.

 

In terms of production: According to incomplete statistics, in the first week of September (9.2-9.8), the weekly production rate of metal silicon in Yunnan region was around 95%, with a weekly output of around 8050 tons. The weekly operating rate slightly decreased compared to the previous week, and the inventory in the metal silicon plant area slightly increased compared to the previous week. The operating rate of metallic silicon in Xinjiang region is around 82%, with a weekly output of around 39800 tons. The operating rate is basically stable, and the inventory in the factory area has slightly increased. The weekly production of metallic silicon in Sichuan region is around 4590 tons, and the weekly operating rate is around 70%, with a slight decrease in operating rate compared to the weekly cycle.

 

Market Price Trends of Metal Silicon

 

Brand region September 10th

553 (without oxygen)/ East China region/ Around 11400~11500 yuan/ton

553 (oxygen supply./) East China region/ Around 11700~11800 yuan/ton

441./Kunming area/ Around 12100~12300 yuan/ton

421./Huangpu Port/ Around 12000~12300 yuan/ton

Market analysis in the future

 

At present, the overall momentum of the metal silicon spot market is slightly insufficient after the rise, and the trading atmosphere in the market is relatively light, with average trading volume and a stalemate in overall trading. The metal silicon data analyst from Shengyi Society believes that in the short term, the domestic metal silicon market will mainly adjust and operate within a certain range, and the specific trend needs to pay more attention to changes in supply and demand news.

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The price of isooctanol fell in September

 

According to the Commodity Market Analysis System of Shengyi Society, as of September 9th, the price of isooctanol was 7800 yuan/ton, a decrease of 2.30% from the price of 7983.33 yuan/ton on September 1st at the beginning of the month; Compared to the beginning of the year, the price of isooctanol decreased by 12950 yuan/ton, a decrease of 39.77%. During the traditional peak season of Jinjiu, the production of isooctanol manufacturers increased, the supply of isooctanol improved, downstream enterprises actively purchased isooctanol, and isooctanol manufacturers shipped smoothly. The price of isooctanol supported the upstream raw material prices, and the cost of isooctanol raw materials decreased, resulting in a further decline in isooctanol prices.

 

The price of raw material propylene fluctuated and fell in September

 

According to the Business Society’s propylene commodity market analysis system, as of September 9th, the price of propylene was 6831.25 yuan/ton, a fluctuating decrease of 1.97% compared to the price of 6968.25 yuan/ton on September 1st. The crude oil market fluctuated and fell in September, and the cost support for propylene weakened; Acrylic manufacturers are operating at low loads, with tight supply and weak downstream demand. The price of propylene is fluctuating and falling, and the cost support for isooctanol is weakening.

 

Downstream plasticizer prices fall again

 

According to the Commodity Market Analysis System of Shengyi Society, as of September 9th, the price of plasticizer DOP was 8463.75 yuan/ton, a decrease of 3.01% from the DOP price of 8726.25 yuan/ton on September 1st at the beginning of the month; Compared to the price of 12091.67 yuan/ton on January 1st at the beginning of the year, it has decreased by 30%. The cost of raw materials has decreased, and the price of plasticizer DOP continued its previous decline in September, hitting a new low for the year. In the traditional peak season of the plasticizer market in September, downstream customers have more inventory, DOP manufacturers are actively shipping, and the supply of goods from manufacturers is tight. However, due to insufficient gold nine color, the demand for plasticizers is limited, and the support for DOP price increases is insufficient, resulting in fluctuations in DOP prices.

 

Future expectations

 

According to the data analyst of Business Society’s octanol product, the supply and demand of isooctanol market increased in September. In terms of cost, crude oil prices and propylene prices have fluctuated and fallen, while the cost support for isooctanol has weakened; In terms of demand, the recovery of the plasticizer market is not as expected, and the demand for isooctanol is poor; In terms of supply, the number of isooctanol manufacturers operating has increased, resulting in an increase in isooctanol supply. Expected isooctanol prices to fluctuate and stabilize.

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According to the Commodity Market Analysis System of Shengyi Society, from August 30th to September 6th, the domestic butadiene market price increased from 12925 yuan/ton to 12937 yuan/ton, with a price increase of 0.1% during the period. This week, the overall butadiene market experienced narrow fluctuations, with market prices falling, but the overall magnitude was limited. Sinopec’s butadiene price remains stable at 13000 yuan/ton. During the week, some of the goods arrived at the port and some were exported to the northern region. At the same time, some of the goods were sold in the northern region, alleviating the problem of tight supply in the northern market. The downstream market demand has remained lukewarm, with limited support for market sentiment, resulting in a general decrease in market prices this week. As of September 6th, the self pickup price of butadiene from the tank in East China is between 12550-12600 yuan/ton, a decrease of 100-150 yuan/ton compared to last week.

 

Cost aspect: During this cycle, the crude oil market has declined, partly due to the easing of tensions in the Middle East. Libya announced that it is expected to resolve restrictions on crude oil exports, easing the tight supply of crude oil and causing a significant drop in international oil prices. On the other hand, there are concerns that China’s crude oil demand may not meet expectations, coupled with the end of the peak oil season in the United States, which will drag down the crude oil market. As of September 5th, the settlement price of the main contract for WTI crude oil futures in the United States was $69.15 per barrel. The settlement price of the main Brent crude oil futures contract is $72.69 per barrel.

 

Supply side: The comprehensive operating rate in China has not changed much recently, and it has remained stable with a slight decrease this week. Currently, the domestic supply of butadiene has limited changes.

 

Demand side: The downstream synthetic rubber market has slightly rebounded this week, with a narrow range of market fluctuations. Currently, downstream demand is weak, market trading is flat, supply prices are firm, and merchant offers have slightly consolidated.

 

On Thursday (September 5th), the closing price of butadiene in the foreign market was mixed: among them, the FOB price in South Korea was reported at 1450-1460 US dollars/ton, unchanged; China’s CFR report ranges from $1490-1500 per ton, with an increase of $15 per ton; European butadiene FOB Rotterdam closed at 1110-1120 US dollars/ton, unchanged; FD Northwest Europe closed at 1050-1060 euros/ton, down 35 euros/ton.

 

Market forecast: With an increase in incoming goods, the current tight supply situation in the market has been alleviated to some extent. However, the downstream market has remained stable and weak. Although enterprise profits have been somewhat restored after price increases, overall demand is still biased towards rigid demand, and on-demand replenishment is maintained as the main strategy. Overall, it is expected that the butadiene market will experience a weak and volatile trend in the short term under the pattern of weak supply and rigid demand.

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