According to the monitoring of the commodity market analysis system of Business Society, the overall prices of industrial grade and battery grade lithium carbonate showed a “continuous decline” trend in June. On June 31st, the average domestic mixed price of industrial grade lithium carbonate was 95552 yuan/ton, a decrease of 7.23% compared to the average price of 103000 yuan/ton on June 1st. On June 31st, the average domestic mixed price of battery grade lithium carbonate was 10188 yuan/ton, a decrease of 8.42% compared to the average price of 109400 yuan/ton on June 1st.

On the supply side, the monthly production of lithium carbonate in June was 64868 tons, an increase of 2330 tons compared to the previous month and a year-on-year increase of 58%; Among them, the production of battery grade lithium carbonate reached 41075 tons, an increase of 1070 tons from the previous month and a year-on-year increase of 56%; The production of industrial grade lithium carbonate reached 23793 tons, an increase of 1260 tons from the previous month and a year-on-year increase of 61%.

Specifications/ Production in June (tons)/ Production increase in June (tons)/ YoY growth rate of production in June

Battery level/ 41075./1070./56%

Industrial grade/ 23793./1260./61%

The operating rates of each major production area are gradually increasing, and there is a certain short-term increase in supply. The supply side is expected to continue to stack up.

Cost side: Some top lithium salt enterprises were in the stage of increasing production in June, and some small and medium-sized mica smelters received increased OEM orders, resulting in an increase in the total production of lithium carbonate at the lithium mica end in June. In terms of salt lakes, most lithium carbonate production enterprises at the salt lake end were in a peak production period in June, and there have been no recent changes in production conditions, resulting in relatively stable production.

On the demand side, the monthly demand for lithium carbonate in June was 68053 tons, a decrease of 4738 tons from the previous month and a year-on-year increase of 7.04%. The production schedule of the battery factory in June is expected to remain basically unchanged compared to the previous month, while major factories still rely on long-term cooperative customer supply as the main rigid procurement. According to research, the overall production schedule of material factories in July slightly increased compared to June. In terms of the terminal market, according to preliminary estimates from the China Association of Automobile Manufacturers, wholesale sales of new energy passenger vehicles in China reached 970000 units in June, a year-on-year increase of 28% and a month on month increase of 8%. The demand for new energy vehicles is about to enter the off-season, and power battery manufacturers are maintaining production reduction and inventory reduction, while maintaining essential procurement or delaying delivery of raw materials.

Demand in June (tons)/ The decrease in demand in June (tons)/ Growth rate of demand in June

68053./4738./7.04%

According to analysts from Shengyishe Lithium Carbonate, the rapid growth in supply combined with slowing demand has led to a continuous decline in lithium carbonate prices in June, and the subsequent improvement in demand may not be until August. In mid July, warehouse receipts will undergo centralized cancellation, which will further put pressure on the spot market.

According to the commodity market analysis system of Shengyishe, the spot price of natural rubber in China has weakened recently (7.1-7.8). As of July 8th, the spot rubber market in China was around 14166 yuan/ton, a decrease of 2.69% from 14557 yuan/ton at the beginning of the month.

On the one hand, the supply of raw materials in domestic and foreign raw material production areas is gradually increasing, and the price of natural rubber raw materials has been falling all the way, causing cost drag on the domestic natural rubber market. As of July 8th, the price of Thai adhesive was 63.50 Thai baht/kg, a decrease from 70.45 Thai baht/kg at the end of June; As of the 8th, the purchase price of state-owned and gold rubber water based concentrated latex raw materials in Hainan production area was around 13600 yuan/ton, significantly lower than 14500 yuan/ton at the end of June; The purchase price of all latex raw materials for glue production is around 13600 yuan/ton, a decrease of 500 yuan/ton from the end of June.

On the other hand, natural rubber inventories are slowly being depleted, resulting in a narrow consolidation of the overall market. As of July 7, 2024, the total inventory of Tianjiao bonded and general trade in Qingdao area was 493000 tons, a month on month decrease of 0.89%.

Downstream tire production is temporarily stable, with demand facing strong support from the natural rubber market. Downstream inquiries are resistant to high priced sources, resulting in a high price drop in natural rubber prices. As of July 7th, the operating load of semi steel tires for domestic tire enterprises is around 790%; The operating load of all steel tires for tire enterprises in Shandong region is about 6.2%.

Market forecast: The current domestic and foreign raw material supply is gradually increasing, and the high price of natural rubber raw materials is falling back; In addition, downstream tire companies are currently operating steadily and are cautious in purchasing high priced goods; Overall, the natural rubber market is expected to narrow down in the short term after a recent high decline.

On July 5th, the National Grain and Oil Information Center reported that the Malaysian Palm Oil Authority will release monthly data on July 10th (next Wednesday). Currently, data from multiple market monitoring agencies shows that Malaysia’s palm oil production in July decreased by about 5% month on month, ending the previous three consecutive months of growth; The export volume has also slowed down compared to last month, with a decrease of 12% to 16% month on month. Based on feedback from the production area, it is expected that the palm oil storage in Malaysia will stabilize and slightly increase by the end of June, at around 1.8 million tons.

Sinopec’s East China phenol listing price has been lowered by 150 yuan, resulting in a reduction of 8200 yuan/ton, while Sinopec’s North China phenol listing price has been lowered by 100 yuan, resulting in a reduction of 8200-8250 yuan/ton. Today, the phenol market continued to decline, with factories following the downward adjustment of listed prices. Looking at the market today, the East China region stopped falling, while the North China and Shandong regions continued to decline, while the South China region remained relatively stable.

On July 2nd, the quotations for phenol in various markets nationwide are as follows:

Region/ Quotation/ Daily fluctuations

East China region/ 8150./ 0

Shandong region/ 8100./ -50

The surrounding areas of Yanshan/ 8100./ -50

South China region/ 8200./ -50

Analysis: This week (6.24-28), the liquid ammonia market in Shandong region slightly declined. According to the Commodity Market Analysis System of Business Society, the main production area of Shandong experienced a weekly decline of 0.56%. The main reason is that the maintenance equipment has resumed work one after another, and the supply side has shown a loose performance. Coupled with the increase in urea conversion by manufacturers, the increase in ammonia production has dragged down the price of ammonia. During the week, some mainstream large factories in Shandong generally lowered their prices by less than 100 yuan/ton. Dealers tend to lower their shipments. Moreover, downstream procurement enthusiasm is not high, agricultural demand is gradually entering the off-season, industrial demand remains strong, and the demand side is generally bearish. At present, the mainstream quotation in Shandong region is between 2800-3000 yuan/ton.

Prediction: In the near future, agricultural demand procurement has slowed down, industrial demand has followed closely, and supply is sufficient. However, some manufacturers have maintenance rumors, and it is expected that supply will be tightened in the later stage. The possibility of a price rebound for liquid ammonia cannot be ruled out.