1、 Trend analysis

In May, copper prices fluctuated at a low level at the beginning of the month, surged sharply to a high point in the middle of the month and then fell back, and fluctuated in the high range in the later part of the month. At the beginning of the month, the copper price was 101498.33 yuan/ton, and at the end of the month, the copper price rose to 104843.33 yuan/ton, with an overall increase of 3.33% and a year-on-year increase of 34.01%.
In the first and second half of May, the main copper contract price was higher than the spot price, and in the middle of May, the spot copper price was higher than the main contract price. As the end of the month approaches, the main composite price of copper is higher than the spot price of copper, indicating that copper prices will be under pressure in the future.
According to LME inventory, LME copper inventory first rose and then fell in May. As of the end of the month, LME copper inventory was 389425 tons, a decrease of 2.09% from the beginning of the month.
Macroscopically, the US Iran situation remained unresolved throughout the month: a draft ceasefire memorandum was released at the beginning of the month, negotiations were repeated in the middle of the month, and a 60 day memorandum of understanding was reached at the end of the month. Copper prices fluctuated sharply with the news. In April, both CPI and PCE in the United States climbed to around 3.8%, and inflation exploded across the board. Market expectations for the Federal Reserve to raise interest rates or even in 2027 have risen, and the high level of the US dollar has formed a core suppression on copper prices. On May 14th, the leaders of China and the United States reached a new positioning for a constructive strategic stable relationship, which became the only positive signal at the macro level this month. In April, the domestic industrial added value increased by 4.1% year-on-year, and the manufacturing PMI was in the expansion range, indicating a continued positive policy.
Supply side: Copper concentrate processing fees (TC) have historically fallen below -100 US dollars per dry ton and dropped to -108.63 US dollars per ton at the end of the month, reaching a historic low level. The structural shortage in the mining sector continues to deepen. The driving factors for the sharp decline in TC include the delayed resumption of production in the Grasberg mining area until the end of 2027, concerns about energy supply in Peru, and the rise in sulfur prices pushing up the price of smelting acid. China’s copper concentrate imports in April saw a significant year-on-year decline of 19.57%, marking the first year-on-year decline in over five years. The smelter continued to operate under extreme negative TC, relying on excess profits from sulfuric acid as a hedge. However, since China restricted sulfuric acid exports in May, sulfuric acid prices have fallen and profit sources have been compressed. In May, the maintenance of the smelting plant will proceed in an orderly manner, and it is expected that the production of electrolytic copper will decrease to 1.1675 million tons month on month, with domestic supply continuing to be tight.
Downstream: Traditional sectors have been significantly suppressed by high copper prices, with copper cable companies operating at a rate of only 63.23% in May, a significant decrease of 20.26 percentage points year-on-year. The operating rate of refined copper rods has fallen to 61.05% month on month, indicating a clear fear of high prices and a focus on essential procurement in downstream areas. Power infrastructure remains the biggest support, State Grid’s investment continues to increase, the proportion of ultra-high voltage projects has increased, and cable orders have shown stable performance. Emerging fields maintain high prosperity: the penetration rate of new energy vehicles has increased to 56.5%, the construction of AI computing power centers has driven the demand for high-end copper products, and orders for high-voltage electromagnetic flat wires are scheduled for the second half of 2027. The demand for construction real estate is flat, and although the price difference between refined and scrap is high, the elasticity of scrap copper supply is insufficient, and the logic of refined copper substitution continues.

Comprehensive analysis of influencing factors
Positive factors: TC breaks through negative triple digits for the first time, and the shortage in the mining sector deepens; Domestic social inventory has fallen to historical lows, and spot premiums remain strong; Power grid and AI infrastructure are essential to support the bottom line; The United States hoards goods and exhausts non US market supply, with Goldman Sachs estimating a non US shortfall of 640000 tons by 2026; Grasberg and Kamoa Kakula’s resumption of production has been fully postponed until 2028, resulting in a reduction of global mine supply by 350000 tons in 2026; The supply of scrap copper is tight, and the ability to replace refined copper is limited.
Negative factors: The situation between the United States and Iran is fluctuating, and geopolitical risk preferences are frequently switching; US inflation exceeds expectations, and expectations of interest rate hikes suppress market sentiment; The combination of traditional consumption off-season and high copper prices has suppressed spot demand, resulting in a significant year-on-year decrease in cable operating rates; The new policy for sulfuric acid export will compress smelting profits; LME and COMEX inventories are running at high levels, with weak overseas demand; The net holdings of CFTC funds indicate insufficient willingness of speculative funds to chase higher prices.
In summary, there are still smelters undergoing maintenance on the supply side in June. If sulfuric acid export restrictions lead to a price drop, it may trigger substantial production cuts in smelters, forming a structural bullish trend. The traditional off-season on the demand side continues, but power infrastructure and emerging fields provide medium – to long-term support. On a macro level, if the FOMC’s statement falls short of expectations and becomes hawkish or opens a window for liquidity repair; If the US Iran agreement is implemented, it is expected to push copper prices above their previous highs. If it breaks, the geopolitical risk premium will rise again. Looking ahead to June and the third quarter, it is expected that copper prices will continue to fluctuate widely at high levels, with core variables being the progress of the US Iran 60 day memorandum approval and the FOMC meeting on June 17th.

In May 2026, the domestic 1 # lead ingot market fluctuated at a low level, with an average price of 16525 yuan/ton at the beginning of the month and 16490 yuan/ton at the end of the month, a monthly decline of 0.21%.

On May 28th, the Business Society Lead Index was 100.45, a decrease of 0.76 points from yesterday, a decrease of 25.04% from the highest point of 134.01 points during the cycle (2016-11-29), and an increase of 34.60% from the lowest point of 74.63 points on March 19th, 2015. (Note: The cycle refers to the period from September 1, 2011 to present)
The lead price trend in May can be described as “having a top and a bottom”, with prices fluctuating repeatedly within a narrow range, and finally closing almost flat throughout the month. This pattern reflects the core contradiction of the current lead market, which is “strong cost support and sustained demand drag”.
The trend of primary lead and recycled lead on the supply side shows significant differentiation
In terms of primary lead, the maintenance of refineries in major production areas such as Henan, Hunan, and Yunnan was concentrated in the early stage, and the weekly operating rate briefly hit the bottom. As the maintenance gradually ended, the operating rate slightly rebounded in the latter half of the year, and the overall supply remained stable with an increase. However, the processing fee for lead concentrate continues to be at a historical low – the mainstream quotation for imported TC is still negative, and domestic TC is also maintained in an extremely low range. The continuous tight supply of mineral resources restricts the willingness of refineries to significantly increase production, and the increment of primary lead is limited.
The situation in the field of recycled lead is even more severe: the industry continues to suffer losses in smelting, with large losses for small and medium-sized enterprises. Large scale shutdowns and maintenance of small and medium-sized refineries in East China, Central China, and North China have led to a continuous decline in operating rates. However, due to the concentrated resumption of production by previously suspended enterprises, the supply of finished products has increased, and the regenerated refined lead has shifted from premium to premium. The cost side constitutes the strongest “safety cushion” for lead prices: lead concentrate spot TC has been running at a low level for a long time, and the strong ore price has built a solid bottom support for primary lead; The recycling price of waste batteries remains stable, and under the continuous expansion of losses in recycled lead, refineries have a strong willingness to raise prices, effectively suppressing the potential for further decline in Shanghai lead prices.
The upward price constraint on the demand side
The second quarter coincided with the traditional off-season for lead-acid battery consumption, with continued weak demand for electric vehicle replacement and low-speed vehicle orders. The limited increase in energy storage and industrial backup batteries posed the biggest constraint on the upward trend of lead prices. Downstream lead storage enterprises only purchase according to long-term contract requirements, actively replenish inventory, and have light individual transactions, making it difficult to drive up lead prices. However, the joint price increase of leading electric vehicle companies such as Yadea has pushed the price center of lead-acid batteries upward, and the transmission of price increases in the industrial chain is smooth, which may to some extent boost downstream willingness to replenish inventory and bring marginal improvement expectations to the demand side.
Inventory end
Social inventory is still at a relatively high level in recent years, and global inventory pressure has not fully eased.
comprehensive summary
In the short term, the pattern of weak supply and demand is expected to continue – the loss reduction of recycled lead and the stable increase of primary lead will form a hedge, the low season of terminal consumption and the transmission of battery price increases will form a game, and the strong cost and accumulated inventory pressure will compete with each other. Lead prices are likely to continue to fluctuate narrowly within the range of 16400-16800 yuan/ton. The lead market is currently in a patient game. The downward space is supported by costs, while the upward space is dominated by demand – when terminal consumption truly recovers may be the key signal for lead prices to break through the volatile box.

1、 Price trend: Over 10% decline within the month, fluctuating at a low level

This week, the melamine market continued its downward trend since mid April. On May 27th, the benchmark price has fallen to 6137.50 yuan/ton, a slight drop of 0.20% per day. Compared with the 6875.00 yuan/ton at the beginning of this month, the monthly decline reached 10.73%. At present, the price has fallen back to a relatively low range in the past year, and the market’s trading center continues to shift downwards.
Market fundamentals:
On the cost side: The price of urea, the main raw material for melamine, has been weak recently. Although some urea companies have attempted to raise their prices, the overall index of the industry chain remains low and has not formed effective support. The decrease in raw material costs directly weakened the price bottom of melamine, providing room for manufacturers to lower prices.
Supply side: Although some devices in the industry have entered a maintenance period, the supply pressure has eased to some extent, but this has not reversed the downward trend. The reason is that the supply reduction caused by maintenance is offset by the dual negative effects of cost reduction and weak demand. The market has shifted from a “cost driven upward trend” to a “cost collapsing downward trend”, and the maintenance benefits seem like a drop in the bucket.
On the demand side: downstream industries such as sheet metal and melamine powder have not seen any improvement in demand, and procurement remains in high demand, with strong resistance to high priced raw materials. Under the mentality of ‘buying up, not buying down’, the downstream wait-and-see atmosphere is strong, further suppressing the possibility of price rebound.
4、 Future outlook:
Overall, the melamine market is currently under dual pressure of “cost collapse and weak demand”. Although there are maintenance benefits on the supply side, it is difficult to withstand the impact of cost decline. Technical indicators show that the downward momentum is still present, and it is expected that the market will continue to weakly bottom out in the short term. The future market needs to focus on the trend of urea prices and whether downstream demand can recover under the stimulation of low prices.

1、 Price trend this month (May 2026)
Futures (Zhengzhou Commodity Exchange’s main bottle tablet PRZL2)
At the beginning of the month (5.6), the price was about 8892 yuan/ton. In the middle of the month, it fluctuated at a high level and dropped sharply to 7906 yuan/ton on 5.22. At the end of the month (5.27), it slightly rebounded to 7790 yuan/ton; The overall high-level decline and wide range oscillation throughout the month, with an amplitude of about 12%.
• In stock (East China water bottle grade including tax factory)
At the beginning of the month, the price ranged from 8500 to 8700 yuan/ton. In the middle of the month, it surged to 8900 yuan/ton, and then fell back to 8150-8400 yuan/ton in the second half of the month. At the end of the month, the price was partially 8000-8300 yuan/ton, with weak trading volume.
2、 Core driving factors
1. Cost side: Crude oil and PX/PTA fluctuations dominate
The geopolitical stalemate in the Middle East, restricted shipping in the Strait of Hormuz, strong crude oil prices, firm PTA processing fees, and strong bottom support for bottle chip costs.
In mid to late May, crude oil experienced a pullback and PTA weakened, leading to a drop in bottle chip prices.
2. Supply and demand side: peak season demand+export support, supply slightly rebounds
• Demand: During the peak season of beverage consumption in May, the production of soft drinks increased by 3.7% year-on-year, and the consumption of bottle slices increased by 17.6% year-on-year; Strong exports (with a year-on-year increase of 1.7% from January to March), high price differences between domestic and foreign markets, FOB exceeding $1500/ton, and obvious spot support.
Supply: The operating rate is 72.8% (month on month+0.6%), with the restart of the 120000 ton plant at Yipu and the commissioning of the 200000 ton new plant at Shaoxing Tiansheng, leading to a marginal easing of tight expectations; The inventory in the factory has been 8.86 days and is still at a low level.
3. Processing fees and basis differences
The spot processing fee is about 1600 yuan/ton, and the disk processing fee is 1000-1100 yuan/ton, which is strong in the short term but under pressure at a high level.
High basis (+500 yuan/ton or more), with spot prices stronger than futures, supporting prices in recent months.
3、 Technical analysis
According to the Commodity Market Analysis System of Shengyi Society, when the 10 day moving average is above the 20 day moving average, the probability of an increase is relatively high. On the contrary, the probability is smaller. Starting from May 7th, the 10 day moving average turned downwards and approached the 20 day moving average. On May 14th, it crossed the 20 day moving average and the probability of further decline continued to increase.
This week’s decline also confirms the accuracy of the core principles of Business Society’s spot market analysis method.
4、 Market Summary and Outlook
Summary of this month: Driven by cost, high demand during peak season, and supported by exports, the stock surged at the beginning of the month, fluctuated in the middle of the month, and fell back with the pullback of crude oil in the middle and late of the month. Overall, it fluctuated widely at a high level, and the resilience of spot stocks was stronger than that of futures.
Short term (June) outlook:
Range: Futures at 7500-8500 yuan/ton, spot at 8000-8500 yuan/ton.
Logic: There is still support on the cost side, the peak season demand continues, and exports remain stable; New production capacity released, high prices suppressed procurement, high volatility, and a slight shift in focus.
Key focus:
The situation in the Middle East and fluctuations in crude oil prices.
The pace of domestic beverage factories’ urgent replenishment needs.
• Changes in bottle export orders and price differentials.
Progress of new production capacity being put into operation.

In May 2026, the overall pressure on the domestic antimony ingot market declined, and the market showed strong supply expectations and weak demand reality throughout the month. The long short game lasted throughout the month, and the price center continued to shift downwards, resulting in a weak trading atmosphere in the market. According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic 1 # antimony ingot market continued to decline in May 2026, with an average market price of 160000 yuan/ton at the beginning of the month and 151000 yuan/ton at the end of the month, a cumulative decline of 5.62% for the whole month.
Supply side:

In May, the supply of antimony ingots in the market showed a game pattern of “expected tightening and actual easing”. At the beginning of the month, the disturbance in the Myanmar mining area brought about the expectation of raw material tightening, and some domestic smelting enterprises carried out maintenance and production reduction actions, which temporarily supported the price formation; However, the import volume of antimony ore significantly increased during the month, and the actual supply of raw materials was loose. Coupled with the continuous accumulation of social inventory in the early stage, the market circulation of goods was abundant, and the export of antimony products continued to be sluggish, which failed to effectively alleviate the domestic supply pressure. The overall loose supply pattern dragged down antimony prices.
Demand side:
Flame retardant materials account for about 55% of the traditional downstream demand for antimony, while glass accounts for about 15%. Antimony is an essential element in photovoltaic glass production and cannot be replaced. With the continuous development of China’s photovoltaic industry, the main increment of antimony metal in the future will be in the photovoltaic field.
Antimony oxide: Antimony oxide is the core downstream application field of antimony ingots, mainly used in the production of flame retardants. This month, the overall transaction volume of antimony oxide was relatively weak. Due to the continuous decline in bromine prices, bromine based flame retardant enterprises have a strong wait-and-see attitude, mostly maintaining an on-demand procurement mode and only replenishing small orders for immediate needs. The market lacks demand for bulk procurement.
Photovoltaic: The photovoltaic field is an emerging demand growth point for antimony ingots, mainly used for photovoltaic glass production. In May, the demand in this field continued to be weak, and it failed to effectively stimulate the antimony ingot market. The overall operation of the photovoltaic industry is weak, with intensified internal competition and continuously increasing inventory. The operating rate of enterprises continues to decline, and the purchasing power for antimony related products has significantly weakened, further dragging down the demand performance of the antimony market. The mentality of “buying up and not buying down” has spread in the terminal market, and overall demand has not substantially rebounded throughout the month.
Outlook for the future: In the short term, the antimony ingot market will continue to be under pressure and experience weak fluctuations. The increase in imports on the supply side will be offset by domestic production cuts, making it difficult to have a significant contraction; The off-season effect on the demand side continues, and there is a lack of signals of recovery in the flame retardant and photovoltaic glass industries, making it difficult to dispel the market’s wait-and-see sentiment. At the end of the month, the average price of 1 # antimony ingots has fallen to 151000 yuan/ton, with significant pressure above. In the future, we need to focus on the pace of downstream inventory replenishment, changes in antimony ore imports, and adjustments to domestic refinery operations. Before demand recovers substantially, antimony prices may continue to operate in a narrow and weak range, and the trend reversal still needs to wait for signals of marginal improvement in fundamentals.

As of May 25th, the price of 0 # zinc was 24814 yuan/ton, an increase of 0.93% from the zinc price of 24586 yuan/ton on May 18th.

fundamentals
The core operating characteristics of zinc prices this week are “suppression at the top and support at the bottom”: the upper part is suppressed by the off-season of terminal consumption and high social inventory, resulting in insufficient upward momentum; Relying on the shortage of raw materials in the mining sector and the expectation of reduced smelting production, there is strong support below, and there is no room for a deep pullback overall, maintaining a high volatility pattern throughout the process.
supply side
This week, the supply side contraction logic of the zinc market continued to strengthen, becoming the core support for zinc prices, and multiple high-frequency data confirmed the deepening of the shortage pattern of raw materials. One reason is that the processing fee for zinc concentrate continues to bottom out, with domestic TC falling to 400 yuan/metal ton and imported TC falling to -56.25 US dollars/dry ton, both at historical lows. The profits of smelters have significantly narrowed or even fallen into losses, and production enthusiasm has been dampened. Expectations of reduced maintenance and production have also increased. Secondly, the inventory of raw materials is accelerating its decline. The domestic zinc ore inventory days are less than 20 days, and the port imported ore inventory is synchronously decreasing. The raw material reserves of smelters are tight, which directly restricts the space for increasing refined zinc production. It is expected that the domestic refined zinc production in May will decline month on month. The third is the superposition of overseas supply disturbances, with the production reduction caused by the Gajamarquilla zinc refinery fire in Peru, and the marginal tightening of overseas zinc ingot supply, further strengthening the expectation of mineral shortage.
However, the short-term supply of refined zinc spot is still relatively abundant. Smelting enterprises have only slightly reduced production this week, and there has been no centralized maintenance. The supply contraction has not yet been transformed into a significant destocking of spot, which is currently more reflected in emotional and expected support.
Demand side
Since mid May, domestic zinc consumption has officially entered the traditional off-season, and the downstream sector’s operating rate has synchronously fallen, forming a clear bearish pressure on the demand side, which is the core reason why zinc prices are difficult to break through the upward trend.
comprehensive analysis
Based on the overall trend of the long short game of fundamentals and the fluctuating characteristics of the technical range, it is expected that the short-term zinc price will continue to fluctuate at a high level with a weak trend, showing a dilemma of range operation and rise and fall, and there is currently no unilateral directional market. The current market lacks clear trend signals, and it is recommended to focus on interval operations, supplemented by a wait-and-see strategy.

This week (5.22-5.25), the magnesium ingot market in Shaanxi region responded that the average market price was 16350 yuan/ton on May 22 and 16850 yuan/ton on May 25, with a daily increase of 3.06%.

Today, domestic magnesium prices rose across the board, with ex factory prices in the main production areas of Shaanxi and Shanxi generally increasing by 350-500 yuan/ton. Among them, the price of 99.9% magnesium ingots in Fugu, Shaanxi, jumped by 500 yuan/ton in a single day to 16800 yuan/ton, marking the largest daily increase in nearly a month.
Message surface
This morning, a safety production accident occurred in a large coal mine in Shanxi Province, and the news quickly spread in the market. Although the accident has not yet had a quantifiable impact on the actual supply of coal for magnesium smelting, the emotional level has been significantly amplified: according to statistics, as of today’s close, the quotation increase rate of magnesium plants in Shaanxi and Shanxi has reached 100%, and more than 60% of manufacturers have clearly stated that they will “suspend discounted sales”, and low-priced sources of goods have almost disappeared.
The following analysis is based on fundamentals:
The cost of raw materials continues to rise: Since mid May, the price of raw coal in Yulin, Shaanxi has risen by about 8%, and the production cost line of magnesium plants has risen to around 16400 yuan/ton. The transaction price of 16500-16600 yuan/ton in the early stage has approached the break even point, and the price space for manufacturers has returned to zero.
The magnesium aluminum ratio has reached an extremely low historical level: as of May 22, the magnesium aluminum ratio has dropped to 0.66, a decrease of 74% from the 2021 high point (2.58), far below the five-year average of 1.14. According to the average regression calculation of price comparison, the theoretical repair space for magnesium price exceeds 70%. This medium – to long-term signal has already attracted some funds to bargain hunting, and today’s emotional trigger has accelerated the formation.
Raw material side: Coal prices strengthen, supporting the bottom
The coal consumption for magnesium smelting accounts for more than 60% of the cost. Recently, the prices of thermal coal and ferrosilicon have been relatively strong, and the cost of magnesium per ton has increased by about 300-500 yuan, forcing enterprises to raise prices.
comprehensive forecast
The price increase this time is mainly driven by emotions, and the follow-up policies after the coal mine accident are the key variables. The predicted price range is 16500-17200 yuan/ton, and if there is no upgrade or shutdown, it will return to 16700 yuan.

1、 Trend analysis

This week, copper prices fluctuated and rose. As of the 22nd, copper prices were reported at 104575 yuan/ton, an increase of 0.28% from the beginning of the week and a year-on-year increase of 33.82%.
The weekly chart shows that in the past three months, copper prices have fallen 4 times and risen 8 times, with a slight increase this week.
LME copper inventory
According to data released by the London Metal Exchange (LME). LME copper inventory has slightly decreased, with 393100 tons of LME copper inventory as of the weekend, a decrease of 0.076% from the beginning of the week.
Macroscopically, the minutes of the April FOMC meeting released on Wednesday were “hawkish”, with multiple officials calling for the removal of the phrase “loose leaning”. Some officials even believe that if inflation continues to exceed 2%, raising interest rates may become a suitable option. The market’s divergence on monetary policy has intensified, leading to an increase in US bond yields and overall suppression of commodity prices.
Supply side: Supply side support remains strong. The domestic copper concentrate spot processing fee (TC) has accelerated its decline and has fallen below -100 US dollars per dry ton, continuing the shortage situation at the mining end. According to customs data, the import volume of copper ore and concentrate in China decreased by 10.59% month on month in April, and the transportation volume of major producing countries such as Chile and Peru also fell.
On the demand side: WBMS data shows that there was a global surplus of 451400 tons of refined copper supply in the first quarter of this year, and the fear of high domestic downstream consumption spread. The widening price difference between Guangdong and Shanghai triggered arbitrage, and the spot price premium performance was weak. Although traditional cable and enameled wire orders have been slightly suppressed by high prices, the driving force of new energy and AI infrastructure cannot be underestimated. Recently, over 10 car companies have increased their prices due to rising raw material costs, indicating a shift towards value competition in the automotive market. The accelerated implementation of technologies such as 800V high-voltage platforms continues to solidify copper demand. At the same time, Zhongkuang Resources plans to raise 5.2 billion yuan for cross-border layout of copper mines in Zambia, which also confirms the high recognition of the long-term strategic value of “copper+lithium” by industrial capital.
In summary, copper prices are likely to remain high and fluctuate widely in the tug of war between macro headwinds and industrial reality. However, the contradiction of tight supply and demand in the global copper market due to prolonged cycles will still remain unresolved in 2026. With the decline in mining grade, scarcity of new projects, and reshaping of strategic metal properties, a central upward trend in copper prices is highly probable.

This week, although the price of melamine in the market continues to decline, the internal dynamics of the moving average system have changed. On May 21st, the benchmark price of melamine in Shengyi Society was 6150.00 yuan/ton, a decrease of 10.55% compared to the beginning of this month (6875.00 yuan/ton). The continuous decline in prices has weakened market sentiment and created a strong atmosphere of risk aversion and wait-and-see.
Mean Square Shape

In the early stages of the decline, the distance between the 10 day moving average (red line) and the 20 day moving average (blue line) is indeed rapidly increasing, that is, “negative expansion”, corresponding to the accelerated decline in the early stage. In the past two days (approximately between May 16th and 20th), the distance between these two moving averages has noticeably started to narrow (shrink), even showing signs of overlapping at the end of the chart. This is the core basis for judging the current market stage.
Based on the latest industry data from mid to late May, the current fundamentals of melamine can be summarized in one sentence: “high supply hanging at the top, weak demand dragging the bottom, and low cost bottoming out”.
Supply side: Since May, the capacity utilization rate of the melamine industry has been hovering between 60% and 63% (far above the breakeven line). Although some facilities in Sichuan, Xinjiang, and other regions have temporarily shut down recently, overall production has recovered quickly, and it is expected that the operating rate will slightly rise to around 62% in the latter half of the year.
Demand side: As the core downstream industries such as sheet metal, coatings, and furniture manufacturing, there is currently a general shortage of orders and low operating rates. Downstream consumers generally consume low-priced inventory in the early stages, and the procurement model is a typical “buy as you go” model, which is extremely picky about prices. Only when the price drops sharply will they dare to take a little bit, and it is impossible to form a centralized stocking wave.
Cost side: Raw material urea is declining: The core raw material of melamine is urea, and recently the urea market has been affected by weak domestic demand, resulting in a continued weak downward trend. As of May 21st, the benchmark price of urea in Shengyi Society was 1782.50 yuan/ton, a decrease of 4.93% compared to the beginning of this month (1875.00 yuan/ton).
When will the downward trend really stop?
Combining the technical aspect of spot trading (moving average adhesion/slowing down of decline) with the fundamental aspect (high supply and weak demand):
The current market is in a period of intense collision between “fundamental bottoming out” and “technical oversold”. Due to weak demand and a large supply of goods, it is difficult for prices to immediately undergo a V-shaped reversal and surge. But fortunately, the cost side has not collapsed, and the technical aspect has been severely oversold.
Conclusion and suggestion:
The market has entered the final stage of a ‘slowdown in decline’, and we suggest that you stop panic selling and stay on the sidelines. Pay close attention to the price and moving average changes in the next 2-3 trading days. Once there is a pattern of “moving average golden cross” or “price not breaking new lows”, consider buying on dips appropriately.

In mid May, the domestic ABS market was weak, and the spot prices of some grades were lowered. According to data from Shengyishe Spot News, as of May 19th, the average price of ABS sample products was 10700 yuan/ton, a decrease of 4.29% from the beginning of the month.

Fundamental analysis
Supply level: In mid May, there was a mutual occurrence of equipment maintenance and resumption of work in the domestic ABS industry, with an overall operating level of over 58% and a slight increase in overall load. The current weekly average production is less than 130000 tons, and the position of finished product inventory has been adjusted back to within 200000 tons. The shipment situation of the aggregation plant has declined compared to before the holiday, and there is still a slight increase in production expected in the short term. Overall, the ABS supply side’s support for spot prices in mid May is still acceptable.
Cost factor: Since May, there have been frequent reports of preliminary peace agreements between the United States and Iran in the Middle East, with high-level officials from both sides releasing positive signals. The market predicts that the Middle East conflict is likely to ease. But the resumption of shipping in the Strait of Hormuz will take time, and the risk premium dominated by the geopolitical stalemate between the United States and Iran is still present. The accelerated consumption of global oil inventories is driving up the mid month oil price rebound. However, its impact on the transmission of the upstream three materials of ABS, which belong to the same petrochemical chain, is not ideal. Although overseas supply of acrylonitrile continues to be tight, domestic industry maintenance facilities are gradually returning, leading to relaxed supply expectations. At the same time, downstream consumption has not increased significantly, and acrylonitrile prices are consolidating weakly.
The domestic butadiene market fluctuated narrowly in mid May. Although the market has shown a weakening of cost support, the bearish sentiment in the early stage has partially cleared. On the other hand, the industry’s load has decreased, and there are expectations of supply contraction. Combined with the recovery of downstream industries such as synthetic rubber, the sluggish terminal demand has improved to some extent. It is expected that a bottoming force in the butadiene market may form.
The styrene market continues to decline. From the perspective of raw materials, the rebound in crude oil prices is not conducive to the transmission of pure benzene. The consumption of styrene lacks effective driving force, and the market lacks upward momentum. However, there are still expectations of a contraction in the supply of styrene, and it is expected that the decline in the styrene market in the future may be limited as a result.
In terms of demand, there will be limited changes in the start-up situation of downstream ABS enterprises in mid May. The main terminal appliance industry is gradually entering a off-season, with average consumption of appliance casings and no improvement in the profitability of terminal enterprises. The atmosphere inside the venue is buying up instead of buying down, and there has been a significant reduction in replenishing and building positions. However, in the early stages of profit taking by merchants, there was a tendency for them to sell at a lower price and then sell back, while the buyer camp showed a high level of resistance towards high priced goods. Overall, the demand side has poor support for the ABS market.
Future forecast
The domestic ABS market weakened in mid May. The production load of the aggregation plant continues to increase slightly, and the on-site supply remains within an ample range. Cost three materials are weakly organized. The current ABS market is shrouded in a bearish trend of weakened demand. At present, the focus of spot prices is loose, and on-site trading is relatively quiet.