This week (1.18-1.24), the nickel market did not continue its upward trend and was under pressure to decline. According to the monitoring of nickel prices by Shengyi Society, on January 24th, spot nickel was reported at 124516 yuan/ton, with a weekly decline of 3.53%.

Macro level: On January 21st, Trump stated that the US government is discussing imposing a 10% tariff on goods imported from China starting from February 1st, and previously stated that a 25% tariff may be imposed on Mexico and Canada starting from February 1st. It also promised to impose tariffs on European imported goods, but did not provide more details. The US dollar index remains above 108, putting pressure on non-ferrous metals.

Supply side: The Secretary General of APNI Indonesia stated that the total approved nickel ore mining work plan and budget (RKAB) for 2025 is 298.49 million tons. Currently, Indonesia’s nickel ore production accounts for 63% of the global total, which will lead to oversupply in the global nickel market. Regarding the previously discussed issue of reducing production, it was stated that the production cuts may be targeted at newly established enterprises. The Indonesian government is not implementing a significant contraction in the supply side, and the pattern of nickel surplus is difficult to change.

The surplus of pure nickel continues, and domestic and foreign inventories continue to accumulate. On January 24th, the inventory of Shanghai nickel warehouse receipts was 28320 tons, an increase of 762 tons during the week; On January 23rd, LME nickel inventory was 173064 tons, an increase of 5070 tons during the week.

On the demand side: At the end of the year, the market trading heat gradually weakened, demand weakened, stainless steel continued to accumulate inventory, and the market fluctuated at a low level. Attention should be paid to the resumption of work after the holiday.

Market forecast: oversupply, inventory pressure, weakened demand during the Spring Festival, and expected nickel prices to fluctuate in the low range.

Aluminum prices strengthen in January

Aluminum prices strengthened overall in January, but as the Spring Festival approaches, the trend of aluminum prices begins to turn around. According to the Commodity Market Analysis System of Shengyi Society, as of January 23, 2025, the average price of aluminum ingots in the East China market in China was 20213.33 yuan/ton, an increase of 2.17% from the market average price of 19783.33 yuan/ton on January 1, and a decrease of 0.62% from yesterday.

Recently, aluminum prices have reversed the decline of the past two months and stopped falling. The driving force behind the slight rebound in aluminum prices is mainly due to the following factors:

Factor 1: Driven by Lunan Aluminum;

1. The EU may implement a ban on Russian aluminum, and the news that Russian aluminum will once again face Western sanctions has raised expectations of increased demand for LME spot goods.

2. The Russia-Ukraine conflict, the information that may affect the natural gas facilities, together with the decline of natural gas inventory in Europe in the severe winter, has significantly promoted the rise of natural gas prices in Europe. The rise in energy prices has pushed up the cost of aluminum ingots in Europe. Supporting the price of London aluminum

Factor 2: Inflation expectations driven by the Trump effect;

On a macro level, Trump’s inauguration within this month has intensified uncertainty in policy interpretation. The domestic tax cuts and external tax increases advocated by Trump have pushed up the prices of imported goods and increased market concerns about re inflation.

Factor 3: In the trend of domestic aluminum ingot destocking:

Aluminum ingot inventory maintains a trend of depletion, and the rate of depletion far exceeds expectations. According to data, as of January 23, the social inventory of aluminum ingots in mainstream areas of China was 459000 tons, an increase of 10000 tons from 469000 tons on January 2.

Reasons for weak upward momentum

Although aluminum prices rose in January due to the combined effects of the above factors, the sustainability of continuing to rise is weak.

Considering domestic supply and demand factors, the operating capacity of electrolytic aluminum is currently maintained at a high level, and the operating rate remains above 95%. Although the current inventory data of aluminum ingots is relatively small, there is a strong expectation of a month on month decrease in the aluminum water ratio with the arrival of the Spring Festival. The seasonal accumulation effect of aluminum ingots is obvious, and there is a strong expectation of pressure on the supply side of aluminum ingots. On the other hand, on the demand side, it is common knowledge that the downstream operating rate will decrease during the Spring Festival holiday. The operating rate of downstream processing enterprises continues to decline month on month, and the off-season for market demand is approaching.

From a cost perspective, the price of raw material alumina has been significantly declining recently. The strong support on the cost side in the early stage has weakened, and the profits of electrolytic aluminum plants are gradually recovering. The expectation of losses and production cuts in the early stage of aluminum plants has weakened.

According to the monitoring of the commodity market analysis system of Shengyi Society, the 1 # tin ingot market in East China fell this week (1.13-1.17), with an average market price of 252110 yuan/ton at the beginning of the week and 249370 yuan/ton at the end of the week, a decrease of 1.09%.

This week, tin prices have slightly fallen, mainly due to the basic end of pre holiday stocking in downstream China, which makes it difficult to support tin prices. The transition period of the US administration is characterized by significant macro uncertainty.

Fundamentally, there is currently no significant contradiction, and tin prices are greatly affected by the market this week. Domestic tin mines are still in a tense state, with a slight decrease in smelting and production scheduling.

On the supply and demand side, smelting enterprises insist on high prices before the holiday, with limited shipment volume. Downstream enterprises have low purchasing sentiment and reduced trading volume. Downstream remains price sensitive, with tin prices trending upwards recently and downstream sentiment weakening.

Based on comprehensive analysis, as the end of the year approaches, logistics and most downstream enterprises enter holiday mode, and it is expected that the market will continue to remain sluggish. Tin prices are unlikely to rebound significantly in the short term and are expected to be mainly volatile.

According to the analysis system monitoring of Business Society, it can be seen that polyethylene will show a relatively strong trend of oscillation in 2024, with high-pressure products experiencing a large increase, followed by linear products, and low-pressure products showing a relatively weak trend. There were two sustained increases throughout the year, the first in April and the second in October. In 2024, LDPE increased by 16.16%, LLDPE increased by 8.31%, and HDPE increased by 1.03%.

Take a rough look at the rising stage in 2024

The first price increase: from April to June. In the second quarter, the petrochemical equipment is in a period of centralized maintenance, with an overall decrease in load and an expected reduction in polyethylene supply. The supply pressure is not high, and the supply-demand situation has improved; In addition, with favorable macro policies and the strengthening of plastic futures, prices continue to rise.

Second Rise: October December: The overall trend of polyethylene in October was strong, with a significant increase occurring after the National Day holiday. Due to the tense situation in the Middle East, the crude oil market rose, and after the holiday, the polyethylene market was boosted by favorable conditions, resulting in a significant price increase. The demand for agricultural film in October has entered the peak season, and there are positive expectations from the consumer side. On the supply side, there has been an increase in maintenance equipment, and there has been a general delay in the production of new planned equipment. The operation of new production capacity is not smooth, resulting in a reduction in supply. Inventory remains at a low level, especially for linear products with tight supply sources. The supply pressure is not significant, and prices remain strong. Positive domestic policies have been released, and the market sentiment is good, providing support for the polyethylene market.

Forecast for 2025

Capacity: In recent years, the domestic polyethylene production capacity has maintained a growth trend. The 23.46 million tons in 2020 increased to 35.71 million tons in 2024, a year-on-year growth of 10.18%. It is expected that 7.43 million tons of polyethylene will be put into production in 2025. The production capacity in the first quarter is relatively concentrated, with about 3.03 million tons of polyethylene plants planned to be put into operation. The production capacity is still in a high-speed growth stage.

Production: The expected polyethylene production in 2024 is 27.914 million tons, a year-on-year decrease of 0.57%, due to an increase in equipment maintenance losses. The production forecast for the first quarter of 2025 is expected to be between 2.42-2.48 million tons of polyethylene due to the gradual restart of equipment maintenance and inspection in January, as well as the gradual increase in new production capacity. Due to the Spring Festival holiday in February and the temporary parking of the equipment, it is expected to be between 2.3 and 2.4 million tons. In March, with the recovery of downstream demand, it is expected to be between 2.4-2.5 million tons.

Maintenance losses: The maintenance losses of polyethylene plants will significantly increase in 2024, with an estimated loss of 4.7334 million tons, a year-on-year increase of 40.93%, setting a new historical high. It is expected that there will be fewer maintenance facilities in the first quarter of 2025, with a production capacity of only 1.69 million tons.

Import volume: From January to November 2024, the total import volume of PE was 12.5806 million tons, with a year-on-year increase of 2.51%. Among them, the import quantity of LDPE was 2.648 million tons, a year-on-year decrease of 5.99%; The import quantity of LLDPE was 4.7518 million tons, a slight decrease of 0.04% year-on-year; The import quantity of HDPE was 5.1745 million tons, with a year-on-year increase of 10.05%. The increase in domestic production of LDPE and LLDPE has led to a decrease in some imports, while the increase in HDPE imports is mainly due to a decrease in domestic production.

Export volume: From January to November 2024, the total export volume of PE was 763600 tons, a year-on-year decrease of 1.89%. Among them, the export volume of LDPE was 227200 tons, a year-on-year increase of 3.46%; The export volume of LLDPE was 157600 tons, with a growth rate of 9.98%; The export volume of HDPE decreased by 36700 tons, a decrease of 8.84%.

Apparent consumption: As of November 2024, the total apparent consumption of PE in China was 37.1155 million tons, with a year-on-year increase of 2.20%. Among them, the apparent consumption of LDPE has slightly decreased, with an apparent consumption of 5.2765 million tons, a year-on-year decrease of 0.24%. Due to the significant increase in domestic LDPE prices compared to LLDPE and HDPE in 2024, the price difference with LLDPE has widened, and the apparent consumption of LDPE has slightly decreased.

PE downstream operating rate: In 2024, the comprehensive operating rate of polyethylene downstream remained below 50% for a long time, and the overall operating load was lower than in previous years. In December, the downstream plastic production rate in China was 44%, a decrease of 2 percentage points compared to the previous month. Among them, the overall operating rate of agricultural film was 38%, a decrease of 3 percentage points compared to the previous period. The overall operating rate is expected to decline by around 6 percentage points in January 2025.

On the cost side: In 2024, under the influence of geopolitical, macro, and supply and demand fundamentals, international crude oil will emerge from a trend of rising and falling, gradually fluctuating and narrowing, and oil prices will gradually return to fundamentals. The supply-demand balance in 2025 will transition from a tight equilibrium state to a balanced state, and major institutions are relatively pessimistic and conservative about oil prices in 2025. Therefore, the upward range of oil prices will be suppressed.

Market forecast: PE production capacity will still be in a high-speed growth stage by 2025, coupled with the delay in the new production of polyethylene plants in December 2024. With the gradual increase in production capacity, there will be greater pressure on the supply side; The downstream demand growth rate will be lower than the supply growth rate, and the expected intensification of the supply-demand game. The main production of new devices is concentrated in the first half of the year, with significant pressure on the supply side. The demand for PE in 2025 still faces challenges, and attention needs to be paid to the issuance and implementation of domestic macro stimulus policies as well as the overseas economic situation. It is expected that the market will weaken in the first half of the year and may rebound in the second half.

1、 Price trend

According to the Commodity Market Analysis System of Shengyi Society, the average market price of baking soda at the beginning of the week was 1559.6 yuan/ton, and the average market price of baking soda at the end of the week was 1554.2 yuan/ton, a decrease of 0.35% in price and a decrease of 39.08% compared to the same period last year. On January 19th, the Business Society Baking Soda Index was 103.15, unchanged from yesterday, a decrease of 56.26% from the highest point of 235.84 points during the cycle (November 10, 2021), and an increase of 16.86% from the lowest point of 88.27 points on December 22, 2020. (Note: Cycle refers to September 1, 2020 to present)

2、 Market analysis

According to the commodity analysis system of Shengyi Society, the price of baking soda is running steadily, and the company’s shipments are still acceptable. The price of baking soda in Henan region is operating steadily, with a factory price of 1450-1550 yuan/ton in Henan region and 1500-1850 yuan/ton in Shandong region. Due to downstream demand based procurement, it is expected that consolidation and operation will be the main focus in the later stage. Upstream: According to the commodity analysis system of Shengyi Society, the price of soda ash has been consolidating this week. The current market average price is 1494 yuan/ton, and downstream customers tend to purchase according to their needs.

Business Society analysts believe that the price of baking soda has been consolidating recently, with a general trend in the upstream raw material soda ash market. Downstream areas of baking soda, such as pharmaceuticals, textiles, and food, have been purchasing on demand recently, with average demand enthusiasm and a supply-demand game. Overall, it is expected that the price of baking soda will mainly fluctuate in the later stage, depending on downstream market demand.