Market Review
In the past week (September 16-22), the domestic PA66 market has shifted from a high stalemate to a downward trend. At the beginning of the week, spot prices remained high, and the mainstream price of Shenma EPR27 was lowered by 500 yuan/ton during the week. The focus of market negotiations gradually decreased, and the bargaining space for actual orders increased. Traders’ shipping mentality relaxed, and prices fell back from the high range. The technical average deviation index turned negative on the 5th, 10th, and 20th, forming a clear downward signal.
cost analysis
The cost support brought by upstream adiponitrile and adipic acid in the early stage has shown marginal weakening, pure benzene oscillation has weakened, and the upward thrust of raw materials on PA66 has decreased. Integrated enterprises can still maintain a certain level of profit, while non integrated processing enterprises have seen their production profits continue to be compressed due to the decline in slicing prices. The support of the cost side for the market has weakened, making it difficult to stop the trend of spot price correction.
Supply and demand analysis
On the supply side, the mainstream PA66 production facilities in China have maintained relatively high levels of operation, with sufficient overall supply of goods. The pressure on factory inventory has gradually accumulated, and the mentality of raising prices in the early stage has loosened. Leading enterprises have actively lowered their quotations, driving down market quotations. The supply of circulating goods is abundant, and there is currently no reduction support brought about by centralized maintenance. On the demand side, the traditional “Golden September” peak season expectations did not meet expectations, and there were inquiries from downstream modification, injection molding, and airbag wire industries. However, the actual new orders for terminal automobiles and electronic and electrical products were limited. Downstream enterprises had strong resistance to high-end raw materials, insisting on using and purchasing as needed, and were afraid to stock up in large quantities. They mainly consumed essential goods and lacked proactive replenishment actions. The demand side was unable to bear the high prices in the early stage, which was the core drag factor of the market downturn.
Short term forecast for the future market
In the short term, the weak operating pattern of PA66 may continue. The price is at a high level in a 60 day cycle, with room for correction and release. Only in a one-year cycle, it is at a medium low level, with limited room for deep decline. Raw material fluctuations, factory scheduling, and downstream order landing will be the main observed variables. It is expected that the short-term market will be mainly weak and volatile, with a focus on fluctuations in adiponitrile adipic acid raw materials, factory price adjustments, actual follow-up of downstream “Golden Nine” orders, and pre holiday stocking rhythm.

The weakening of crude oil support has led to PTA prices following fluctuations in crude oil, and the supply and demand side is gradually shifting towards increasing supply and decreasing demand. The effectiveness of the traditional “Golden September and Silver October” peak season needs further verification. Recently, the domestic PTA spot market has shown a slight decline. As of September 21, the PTA spot benchmark price was 7049 yuan/ton, a decrease of 4.25% from September 17.
On the cost side, in the international crude oil market, and on the spot side, Saudi Aramco sold approximately 60 million barrels of crude oil to Asia through ship to ship transfers, driving the Gulf region’s crude oil exports back to an average of 1-1.5 million barrels per day, effectively filling the export gap caused by pipeline damage at Yanbu Port. The supply of crude oil in the Asian market was adequately guaranteed, which suppressed the spot price of crude oil. On the futures side, the expectation of loose crude oil supply is heating up, and the impact of rising tanker freight rates is basically covered by the increase in supply, putting pressure on crude oil futures prices. As of September 18th, the settlement price of the November WTI crude oil futures contract in the United States was $96.08 per barrel, and the settlement price of the November Brent crude oil futures contract was $103.87 per barrel.
On the supply side, multiple sets of PTA units that underwent early maintenance were restarted, and the industry’s operating rate rose to around 72%. The market’s available supply gradually increased, and the subsequent supply increment continued to be released. Although some individual devices have been temporarily shut down for maintenance, it is difficult to change the overall trend of resuming production. In mid to late September, PTA is highly likely to end destocking and gradually enter the stage of accumulating inventory, suppressing the upward space for prices.
The performance of the demand side falls short of traditional peak season expectations, becoming the main weakness that constrains the market. The operating rate of the downstream polyester industry has fallen to around 74%, and the pressure of losses in bottle chips and short fibers has increased, leading to an increase in production cuts and maintenance. The production of weaving machines in Jiangsu and Zhejiang provinces has decreased seasonally, and the follow-up of terminal textile orders is weak. Downstream resistance to high priced raw materials is evident, and the willingness to replenish raw materials is cautious. The downward transmission of the industrial chain is hindered, and negative feedback continues to emerge. The expected peak season of Golden September in the market has not yet been fully realized, and downstream enterprises have plans to reduce production before and after the National Day holiday, making it difficult for short-term demand to be significantly boosted.
Looking at the future, analysts believe that in the short term, PTA’s own supply recovery and weak demand will suppress it, but the cost of crude oil PX will support the bottom, so the price will mainly fluctuate within a range. The follow-up focus will be on tracking two major variables: first, changes in international crude oil and PX prices; The second is whether the terminal textile orders can substantially recover and observe whether the polyester production has stopped falling and rebounded. If the demand during peak season continues to fall short of expectations, coupled with the continuous release of supply, there is a risk of PTA price correction; If terminal orders explode beyond expectations, there will be upward price elasticity.

Recently, the lithium carbonate market has weakened, with a significant monthly decline. As of September 20th, the benchmark price of battery grade lithium carbonate was 130000 yuan/ton, a decrease of 16.7% from 156000 yuan/ton at the beginning of the month. This round of price decline is not caused by a single factor, but rather the result of the resonance of multiple negative factors such as changes in inventory data, differentiation of supply and demand expectations, fine-tuning of terminal demand, and tightening macro environment.
Inventory data adjustment
After the recent update of industry inventory statistics samples, the overall inventory scale of the market has significantly increased. The newly added inventory has effectively eased the tight spot market pattern in the early stage, completely breaking the low inventory support logic that the market relied on before. The market’s optimistic expectations for the long-term demand for lithium carbonate have rapidly cooled down, driving down prices.
The tightening of macro financial environment
As a core energy metal, the price trend of lithium carbonate is highly linked to macro liquidity. The expectation of tightening overseas monetary policy is heating up, and the probability of the Federal Reserve raising interest rates continues to rise, suppressing the overall valuation of base metals. Against the backdrop of global liquidity tightening, new energy metals including lithium carbonate are generally under pressure, and external macro negative factors and negative factors in the industry are forming a combined effect, driving prices to continue to decline.
Double increase in supply and demand
On the supply side, the increase in overseas lithium ore imports continues to be released, and lithium ore sources from Zimbabwe and other places are gradually arriving at the port. Coupled with the steady release of production capacity by domestic lithium salt enterprises and the resumption of work and production on pre maintenance production lines, the overall supply capacity of the industry continues to improve. Data shows that domestic lithium carbonate production achieved both month on month and year-on-year growth in August, and the trend of loose supply side in the industry is gradually emerging.
The demand side exhibits strong short-term resilience, forming a clear contrast with weak futures sentiment. In August, the domestic demand for lithium carbonate consumption maintained high-speed growth, achieving significant increases both month on month and year-on-year. Entering September, the traditional peak season effect of the power battery industry continues to emerge, and battery companies maintain a steady growth rate in overall production, with sufficient efforts to meet the demand for lithium carbonate. In the segmented fields, the production capacity of the lithium iron phosphate industry chain continues to climb, the operating rate is steadily increasing, and the output continues to grow, effectively offsetting the negative impact of the decline in production of ternary cathode materials. The overall market spot consumption has not shown significant weakness.
Looking ahead to the future, the lithium carbonate market will still be in a continuous game between real fundamentals and long-term expectations. In the short term, after adjusting inventory samples, the shortage pattern of spot goods has eased, coupled with the suppression effect of high market warehouse receipts on recent contracts, and prices are likely to continue a weak and volatile trend. However, from the perspective of core fundamentals, the core logic of the market’s “strong reality” has not been overturned, and the trend of continuous destocking in the industry is expected to continue until the end of the year, with stable support for essential needs.

1、 Trend analysis
This week, copper prices first fell and then rose. As of September 18th, copper prices were reported at 110235 yuan/ton, an increase of 1.18% from the beginning of the week and a year-on-year increase of 37.72%.
LME copper inventory
According to data released by the London Metal Exchange (LME). LME copper inventory has slightly increased, with 255900 tons of LME copper inventory as of the weekend, up 5.4% from the beginning of the week.
Macroscopically, the probability of the Federal Reserve raising interest rates in September this week has risen to over 87%, and the center of gravity between US bond rates and the US dollar has shifted upward, which has formed a short-term pressure on copper prices. Although the new PMI orders of the domestic manufacturing industry are above the boom and bust line, fixed assets investment continues to decline, the momentum of domestic demand repair is weak, and the macro overall is empty. The negative correlation between copper prices and the US dollar has temporarily weakened, and the market’s pricing focus has shifted more towards the fundamentals of the industry itself.
Supply side: The spot TC of copper concentrate has fallen to a historical extreme low of about -210 US dollars/ton, and the shortage pattern in the mining side continues to deepen. Chile and Peru’s production recovery is weak, with a significant year-on-year contraction in domestic arrivals, and significant pressure on raw material costs for smelters. Spot smelting profits have deteriorated to a nearly one-year low, and domestic refined copper production in September is expected to decline more than expected due to raw material constraints. The supply side’s hard constraints provide medium-term support for copper prices.
Demand side: Downstream is gradually entering the peak season of “Golden September and Silver October”, with copper pole and cable operating rates rebounding month on month, but high copper prices have significantly suppressed traditional sectors. The investment in the power grid supports consumption, and the demand for copper in AI data centers and new energy is growing rapidly, forming a structural hedge. The differentiation of copper processing structures has intensified, with copper strips and foils continuing to grow rapidly, while traditional copper rods and tubes are relatively weak.
Influencing factors:
The core variable lies in the official decision of the US refined copper 232 tariff at the end of September. The market had previously bet on imposing tariffs, causing COMEX inventory to remain significantly high; If tariffs are implemented as scheduled, the tight supply situation in non US regions will continue; If it fails, there is a risk of a large amount of inventory outflow from the United States, which will have a negative impact on copper prices. The path of the Federal Reserve’s interest rate hike and the degree of fulfillment of domestic peak season demand also constitute a dual disturbance.
In summary, the deep negative value of TC in the mining sector constitutes a hard cost support for copper prices, and the low-level depletion of domestic social inventory strengthens the supply vulnerability of non US markets; However, the expectation of tightening macro liquidity and the uncertainty of tariff policies have suppressed the short-term volatility of copper prices, which is mainly determined by the game between the two. After the implementation of tariffs, the risk of low inventory in non US regions will be further highlighted, and the focus of copper prices is expected to gradually shift in the fourth quarter.

This week, the domestic anhydrous hydrofluoric acid market continued to operate at a high level. As of September 17th, the benchmark price of hydrofluoric acid was 16600.00 yuan/ton, unchanged from the beginning of this month.
On the raw material side: The price of raw fluorite is running strong, and holders are reluctant to sell at high prices, which provides strong cost support for hydrofluoric acid. The sulfuric acid end continues to weaken, and the cost support effect is significantly weakened. Under the hedge of two major raw materials rising and falling, the overall production cost of hydrofluoric acid remains high. As of September 17th, the benchmark price of fluorite is 3700.00 yuan/ton, an increase of 2.25% compared to the beginning of this month (3618.75 yuan/ton).
On the other hand, some of the parking and maintenance equipment in the early stage has not fully resumed production, and the regional supply situation is still tight. Many enterprises have exceeded their orders, and the circulation of spot goods for individual orders is limited. But the overall operating rate is about 48.73%, slightly higher than the previous period, and the supply shortage has eased compared to the previous period. Demand side: downstream negative signals increase. The refrigerant industry has a downward trend in production starting in September, with gradually decreasing consumption. The procurement of hydrofluoric acid is mainly based on essential needs. There has been no significant increase in demand for lithium hexafluorophosphate, electronic grade hydrofluoric acid, and pharmaceutical intermediates, making it difficult to increase overall volume.
Market forecast: Analysts predict that the prices of sulfuric acid and fluorite on the raw material side will rise and fall, while the cost side will continue to support hydrofluoric acid. Downstream demand will be weak, with rigid procurement being the main focus. It is expected that the domestic market for anhydrous hydrofluoric acid will remain stable in the short term. More attention should be paid to the raw material end and the implementation of downstream refrigerant enterprise maintenance.

Market trend
The PA6 spot market has been consolidating at a high level in the past week (September 9-15). On September 9th, the benchmark price of PA6 was reported at 14500.00 yuan/ton, and the price remained high during the week, with mainstream manufacturers significantly raising their prices; Technical indicators show directional differentiation of the three mean differences, presenting a bullish signal of retracement under volatile market conditions, with prices in the high range of 60 day, 3-month, and 1-year cycles.
influencing factors
Cost side: Upstream pure benzene prices are running at a high level. In the second week of September, Sinopec raised the weekly closing price of caprolactam by 520 yuan/ton to 14480 yuan/ton, resulting in a significant increase in raw material costs and strong cost support for PA6. The polymerization factory has a strong willingness to raise prices.
Supply and demand side: Some of the caprolactam units are undergoing maintenance, and the overall supply of raw materials is tight. The PA6 polymerization unit is operating at a relatively stable level, and the market spot increment is limited. The inventory pressure of factories and traders is not high, and the holding merchants have a strong reluctance to sell and a weak willingness to ship at low prices. Downstream textile and spinning enterprises on the demand side urgently need to follow up, but they have resistance to high slice prices. The release of textile orders at the end of the “Golden September” peak season fell short of expectations. Most downstream enterprises mainly consume their own inventory and replenish inventory on demand, with weak willingness to actively stock up in large quantities. The overall trading atmosphere in the market is average.
Future forecast
The PA6 market is expected to maintain a volatile and strong consolidation pattern in the short term in the future. The cost support brought by the high level of caprolactam still exists, and the atmosphere of multiple heads in the industrial chain is still present; However, the current full cycle price is at a high level, and the downstream acceptance capacity is limited. There is significant resistance to sustained and significant price increases, and it is necessary to focus on tracking the progress of caprolactam plant resumption, fluctuations in pure benzene prices, and the actual order landing situation of textile terminals.

1、 Price trend: The center of gravity shifts upwards, and the end is flat

Entering the second week of September (September 7th to September 14th), the melamine market showed a trend of “rising first and then stabilizing”. As of September 15th, the benchmark price of melamine was reported at 6250.00 yuan/ton, an increase of 1.21% from the beginning of this month (6175.00 yuan/ton).
From this week’s trend, the price was 6212.50 yuan/ton on September 7th, gradually rising in the following trading days. After breaking through to 6250 yuan/ton on September 10th, it entered a stable period. From September 11th to 14th, it remained stable at 6250.00 yuan/ton for four consecutive trading days, with zero daily increase or decrease. The overall market performance is stable, and the price center has shifted upward compared to the previous period.
2、 Moving average system: Long position arrangement, clear upward signal
From the price and moving average chart, it can be seen that the moving averages of each cycle this week show a clear bullish upward divergence feature: the 5-day moving average is located at the top, and the 10 day and 20 day moving averages are arranged downwards in sequence, all maintaining an upward slope.
The current 10 day moving average continues to operate above the 20 day moving average, with a positive moving average and maintaining an expanding trend. This is a typical continuation period after the moving average crosses, indicating that the early upward signal has been confirmed and short-term bulls dominate. However, it is worth noting that in recent days, the current price moving average has been in line with and leveled off the 5-day moving average, indicating a short-term stalemate at the 6250 yuan/ton level.
3、 Position and cycle: high in the short to medium term, still in the medium to low range in the long term
From the monitoring of location data, on September 14th, melamine was at a “high” level in the 10 day, 20 day, and 30 day periods, at a “medium high” level in the 60 day and 90 day periods, and remained at a “medium low” level throughout the year.
This indicates that the current upward trend mainly reflects the strength in the short to medium term. The price has reached the upper edge of the recent range, but in a longer annual cycle, the current price has not yet reached historical highs, and there is still early bottom support below.
4、 Cost driven: urea surge provides support
The upstream raw material urea of melamine has shown stronger performance this month. On September 15th, the benchmark price of urea was 1800.00 yuan/ton, a significant increase of 4.96% compared to the beginning of this month (1715.00 yuan/ton), and the increase was significantly higher than that of melamine (1.21%).
The rapid rise of raw material urea has formed a significant driving force on the melamine market from the cost side, which is the core logic for the shift of melamine price center and the maintenance of strength this week.
5、 Future prospects
Overall, driven by the rise in urea prices on the cost side, melamine achieved a price increase this week. The bullish arrangement of the moving average system confirms a strong pattern, and the market is operating steadily as a whole.
In the short term, with cost support and the upward momentum of the moving average, melamine is expected to maintain a high consolidation level; However, it is necessary to pay attention to the changes in momentum after the continuous flattening of prices. If the difference between the 10 day moving average and the 20 day moving average narrows (the moving average shrinks), we need to be alert to the adjustment signals brought by the downward crossing of the moving average. In the medium to long term, as the market remains at a mid to low level for one year, the overall valuation of the market has not shown extreme overvaluation. The subsequent trend will rely more on the sustainability of the raw material side and the follow-up of downstream demand.

From September 1 to 14, 2026, the domestic No. 1 antimony ingot market experienced fluctuating price increases, with the average price at the beginning of the month reaching 102,000 yuan per ton and the average price on the 14th reaching 105,000 yuan per ton, resulting in a cumulative rise of 2.94%.

In mid-to-late September, the domestic #1 antimony ingot market exhibited a fluctuating but slightly upward trend, with strong overall resilience. During this two-week cycle, market forces of supply and demand interplayed, with positive factors prevailing. On the supply side, the implementation of overseas mineral export bans and domestic smelters’ losses leading to cautious sales jointly supported steady antimony price increases. While demand-side factors such as limited concentrated procurement during the peak season and terminal cost pressures constrained the rise, they did not significantly suppress the market trend. The market remained broadly bullish, with steady upward movement alongside periodic fluctuations. Downstream buyers made purchases based on demand and rationally stocked up, resulting in a modest price increase.
Supply side:
In terms of overseas markets,锑锭 prices in international markets showed a slight increase this week, with stable essential demand underpinning the overall trend. Policy factors were the primary disruptors this month, as Zimbabwe imposed an export ban on antimony and tungsten ores and concentrates on September 8. This policy triggered market concerns over supply, raising worries about a medium-to-long-term tightening of global antimony raw material supply, which continues to impact market sentiment.
In the domestic market, the supply side remains generally tight, with a strong market sentiment of price support. Domestic antimony mining is strictly controlled, and the antimony concentrate market has maintained a tight balance for an extended period. Most domestic smelters rely on externally purchased raw materials for production, leading to significant profitability pressure across the industry, with widespread losses. This has fostered a strong price-support mindset among enterprises. Traders primarily maintain just-in-time inventory for operational needs, avoiding concentrated stock liquidation or clearance operations. The overall tightness of spot market circulation provides a bottom support for domestic antimony prices, resulting in a stable to slightly stronger performance in the spot market.
Demand side:
In traditional downstream demand, antimony accounts for approximately 55% in flame retardant materials and about 15% in glass. Antimony is an essential and irreplaceable element in the production of photovoltaic glass. With the continuous development of China’s photovoltaic industry, the primary incremental demand for antimony metal in the future will be in the photovoltaic sector. This period’s downstream demand for antimony ingots shows characteristics of lingering seasonal expectations but insufficient actual growth, with overall rigid demand providing stable support but lacking concentrated volume-driven momentum. The current downstream market exhibits relatively subdued trading activity, with the industry generally maintaining low inventory levels and adopting a demand-based procurement model. Traditional rigid demand for antimony oxide and new energy rigid demand for photovoltaic glass create a dual bottoming effect, but factors such as terminal cost pressures and weak orders continue to constrain restocking efforts. The overall demand-side performance remains mild and weak, limiting the upward movement of antimony prices.
Antimony oxide: As the core downstream application of antimony ingots, the antimony trioxide industry has entered the traditional peak consumption season of “Golden September,” with seasonal recovery expected. However, overall demand performance remains weak. In downstream sectors such as flame retardants and plastic chemicals, rising upstream raw material prices have driven continuous production cost increases, compressing corporate profit margins. Consequently, procurement attitudes across the board remain cautiously conservative, with steady but moderate demand for essential purchases.

Photovoltaic: Photovoltaic glass is an important downstream application field of antimony ingots in new energy. In this period, the overall operation of the industry is weak, and the demand for incremental procurement is insufficient. The overall situation is characterized by weak supply and demand, accumulated inventory, and pressure on enterprise operations. The implementation of domestic photovoltaic bidding is slow, and the enthusiasm for overseas stocking has declined. Overall, photovoltaic glass enterprises only maintain sporadic procurement for essential needs, without centralized replenishment actions, and have weak support for antimony ingots.
Market forecast:
The future market needs to focus on the pre holiday replenishment rhythm of downstream flame retardants and photovoltaic glass industries in mid to late September. If the demand for centralized replenishment in the downstream before the holiday is released, the antimony ingot market is expected to continue its recovery trend, and the upward pace may accelerate; If the terminal continues to maintain scattered procurement for essential needs and the incremental demand during peak seasons is limited, the market may continue its current upward trend of oscillation. Focus on the actual downstream demand.

In the first half of the year, the domestic heavy rare earth market prices remained stable, while the prices of dysprosium oxide and dysprosium metal remained stable. The price of dysprosium ferroalloy slightly decreased, with dysprosium oxide prices reaching 1.465 million yuan/ton as of the 11th; The price of dysprosium ferroalloy is 1.42 million yuan/ton, a decrease of 0.35% in price; The price of dysprosium metal is 1.965 million yuan/ton.

The price trend of the heavy rare earth market remained stable in the first ten days, which was not caused by a single factor, but rather the result of the combined effects of supply rigidity, demand support, policy regulation, and market games.
Supply side: Continuous strengthening of rigid constraints
The domestic supply of rare earths is strictly constrained by total quantity control indicators. The total quota for rare earth mining in 2026 is 285000 tons of REO, including 246000 tons of light rare earths (+7.1% year-on-year) and 39000 tons of heavy rare earths (only+2.6% year-on-year, almost zero growth). The quota for medium and heavy rare earths has remained zero growth for several consecutive years, with a clear supply ceiling. Even though the Baiyunebo Mine reported the production expansion, the rare earth output is still strictly limited by the quota, and will not exceed the total amount index due to the increase of ore mining output. At the same time, the increase in overseas supply is limited. Myanmar’s rare earth ore imports are hindered, and overseas substitution capacity can only cover the low-end demand for light rare earths. The heavy rare earth sector still heavily relies on China. Due to invoicing issues, some domestic waste recycling companies have reduced production, further limiting the annual supply growth rate.
Demand side: Structural support for stable chassis
The largest downstream application of heavy rare earths is permanent magnet materials in the fields of new energy vehicles and wind power. The second and third quarters are usually the traditional off-season for the new energy vehicle and wind power industries, resulting in insufficient orders for magnetic material companies and a decrease in operating rates to 60% -65%. Terminal enterprises are suppressing prices, and magnetic material factories generally adopt a conservative strategy of “on-demand procurement and zero inventory”, refusing high prices, resulting in a significant contraction of demand for heavy rare earths. In order to reduce costs, some mid to low end magnetic materials have reduced the addition of heavy rare earth elements such as dysprosium and terbium in production, further suppressing demand and maintaining a low market for heavy rare earths.
Policy side: Strategic control and storage support
Since 2026, rare earth control policies have been implemented intensively. The Implementation Regulations of the Mineral Resources Law have officially come into effect, for the first time including rare earths in the national strategic mineral resources catalog in the form of administrative regulations, and establishing a legal and normalized storage system. The National Material Reserve Bureau has launched the fourth phase of the rare earth storage plan, with annual storage targets of 3000 tons, 4000 tons, and 5000 tons of neodymium metal from 2026 to 2028. The collection and storage mechanism provides a bottom line effect for prices, gradually shifting the positioning of rare earths from “cyclical products” to “strategic products”. In addition, industry consolidation continues to advance. China Rare Earth, China Nonferrous Metals, and China Minmetals, the three major central mining enterprises, have simultaneously initiated asset restructuring and integration. The establishment of the two major rare earth groups in the north and south will gradually concentrate fragmented mining rights and smelting indicators in the hands of top enterprises, making the upstream supply rhythm more controllable.
Market forecast: The recent trend of heavy rare earth market is stable, and the core is the result of the combined effect of insufficient short-term demand and market sentiment cooling. Starting from 2026, the global supply and demand gap for rare earths may continue to widen, and rare earth prices are expected to remain stable with some progress.

As of September 10th, the price of 0 # zinc was 27529 yuan/ton, an increase of 2.16% from the zinc price of 26948 yuan/ton on September 1st.
fundamentals
In early September, zinc prices showed an accelerated upward trend, becoming the strongest performer in the non-ferrous metal sector. The core logic of this round of price increase lies in the substantial transmission from tight mines to tight ingots. In terms of trend rhythm, the first half of the year showed a pulse like characteristic of “rising slightly, stepping back slightly, and then rising again”. Overall, the zinc price center in the first half of the year has significantly increased compared to the end of August, but spot market transactions have almost stagnated, and downstream consumers generally adopt a wait-and-see attitude towards high prices. Spot prices remain at a discount, and futures prices have risen significantly faster than spot prices.
Supply side:
As of early September, the weekly processing fee for domestic zinc concentrate has decreased by 300 yuan compared to the previous period, and the processing fee index for imported zinc concentrate has dropped to -124.5 US dollars per dry ton, both at historically low levels. A negative processing fee depth means that smelters not only cannot profit from processing fees, but also have to bear costs. Coupled with the decline in the price of by-product sulfuric acid, smelting losses continue to expand, and multiple refineries (in Guangxi, Henan, Inner Mongolia, Sichuan and other places) have experienced sudden maintenance and production cuts.
Domestic zinc ingot inventory experienced an unexpected decline in the first half of the year. The core driving force for the rapid clearance of inventory is the opening of the export window – after the Shanghai London ratio fell below the critical threshold of 7.0, the profit window for zinc ingot export sales and delivery officially opened, and a large number of domestic zinc ingots flowed into overseas markets. This’ inventory transfer ‘behavior has caused a temporary shortage of domestic spot goods in the short term, but the majority of the destocking volume is for export sources rather than the actual digestion of terminal consumption.
Demand side:
The weighted operating rate of downstream primary processing enterprises is only 51.44%, which is at a low level in the past five years. The high-frequency production of galvanized structural parts, die-casting zinc alloys, and zinc oxide has all declined. The overall performance is weaker than seasonal. After the zinc price rose to 26000 yuan/ton, there was a strong fear of high prices and cautious procurement in the downstream market. Spot trading in Guangdong was sluggish, and galvanizing and die-casting alloy factories had low purchasing intentions. Terminal hardware accessory factories faced the risk of production reduction and shutdown. Galvanized pipe manufacturers have also postponed their production schedule for September due to low terminal consumption and high zinc cost. Terminal real estate remains the main drag, and although infrastructure orders have resilience, they have not yet formed a synergy.
The current logic chain supporting zinc prices, including tight mining, reduced smelting production, and domestic destocking, is still intact, and there have been no false signals in the short term. Weak follow-up of spot prices: After the rapid rise in zinc prices, downstream sentiment of fear of high prices has intensified, spot prices remain at a discount, terminal order growth is limited, and peak season consumption has not yet been fully realized. Driven by the price difference between domestic and foreign markets, the maintenance plans of some domestic smelters have been postponed again, and the actual production reduction in September may be lower than expected. Short term zinc prices are likely to maintain a pattern of high volatility and strong bias. Currently in the stage of “strong trend+high skill buying”, it is not advisable to chase after the rise. In the early stage, if you place multiple orders, you can consider taking profits on the high portion and wait for the price to stabilize after hitting the 10 day or 20 day moving average before looking for a technical entry point to buy on dips.