Fall first and then rise in August

The price of ethylene glycol began to decline in September. According to data from Shengyi Society, as of September 4th, the average price of domestic oil to ethylene glycol was 4630 yuan/ton, a decrease of 1.03% from September 1st. The prices in each region are as follows:

On September 4, 2024, the price of ethylene glycol at the port declined, with an early operating price range of 4640-4670 yuan/ton. In the afternoon session, it followed the downward trend of the market, with a slight downward shift in the price range. The spot basis slightly strengthened, especially in recent times when the contract basis has strengthened significantly. On September 4, the 01 contract had a paper cargo basis quotation of+28 to+34 for this week; The base price for September is 33-42 yuan/ton.

On September 4th, the price of coal to ethylene glycol slightly loosened, with prices in the northwest region around 4250 yuan/ton, including taxes, before leaving the factory.

On September 3, 2024, the external price of ethylene glycol was as follows: the landed price in China was $559/ton, and the landed price in Southeast Asia was $576/ton. The domestic landed price has slightly increased.

List of August Ethylene Glycol Port Inventory Data

As of September 2, 2024, the total spot inventory of ethylene glycol in the main ports of East China was 620200 tons, an increase of 3900 tons compared to the total spot inventory of 616300 tons on August 1.

The total planned arrival of ethylene glycol at the main port in East China this week (September 2nd to September 8th) is about 34000 tons; Among them, the arrival quantity in Zhangjiagang is about 9000 tons, the arrival quantity at Taicang Port is about 6000 tons, the arrival quantity in Ningbo is about 19000 tons, and the arrival quantity in Shanghai is about 0 tons.

On September 4th, the price of ethylene glycol moved downwards due to:

On the news of the resumption of crude oil supply from Libya, coupled with OPEC+’s previous statement to increase production as planned, crude oil prices plummeted, and the polyester sector as a whole saw a significant decline, especially in PTA/short fiber/PET bottle flakes.

Future expectations

At present, the absolute amount of explicit inventory in ports is still relatively low. This provides some support for the price of ethylene glycol.

However, other products in the polyester sector have basically fallen below the previous fluctuation range, forming a strong negative sentiment towards the relatively strong ethylene glycol price. It is expected that the ethylene glycol price will mainly fluctuate weakly in the short term.

1、 Price trend

According to the Commodity Market Analysis System of Shengyi Society, the price of 8 sulfur has increased. On August 31st, the average ex factory price of sulfur in the market was 1435.00 yuan/ton, an increase of 18.92% compared to the average ex factory price of 1206.67 yuan/ton at the beginning of the month.

The sulfur market is on the rise this month. The manufacturer’s shipments are smooth, and the price of sulfur is rising accordingly; After a series of early stages of price increases, traders’ attitudes towards subsequent trends gradually turned cautious, market activity decreased, and the trading atmosphere became quiet.

2、 Market analysis

Downstream market trends in the industrial chain:

The downstream sulfuric acid market remained stable and upward in August, with a market price of 350.00 yuan/ton at the beginning of the month and 400.00 yuan/ton at the end of the month, representing a 14.29% increase during the month. The rise in sulfur prices is favorable for the rise in the sulfuric acid market. Downstream consumers mainly digest their previous inventory and follow up on sulfuric acid purchases as needed. Acid companies’ quotations are mostly stable and wait-and-see.

3、 Future forecast

The sulfur analyst from Shengyi Society believes that the sulfur enterprise’s equipment is operating normally, and the market supply is sufficient. We are waiting for the arrival of autumn, and the autumn fertilizer market is gradually developing. Downstream production may increase, and the market trading atmosphere will improve. It is expected that the sulfur market will consolidate and operate in September.

Today (September 2nd), the closing price of PTA main futures TA2501 was 5140 yuan/ton, a decrease of 274 yuan/ton, a decrease of 5.06%, with a settlement price of 5248 yuan/ton and a daily increase of 174465 lots. The spot price followed the decline. According to the Commodity Market Analysis System of Shengyi Society, the average spot price of PTA in East China was 5223 yuan/ton, a decrease of 2.96% from the previous trading day.

The decline in crude oil prices has led to a collapse in PTA cost support. On August 30th, the settlement price of the main WTI crude oil futures contract in the United States was $73.55 per barrel, a decrease of $2.36 or 3.1%. The settlement price of the main Brent crude oil futures contract was $76.93 per barrel, a decrease of $1.89 or 2.4%.

The promotion of demand for polyester during the peak season is slow, and the short-term positive driving effect brought by downstream low-priced procurement is not obvious, resulting in a low intention to receive goods. Yesterday, the 1.2 million ton PTA plant in East China was shut down for maintenance, but the PTA industry’s operating rate remained at a high level around 85%, and there was ample short-term supply of goods.

Analysts from Shengyi Society believe that PTA is still facing pressure from accumulated inventory, and the bearish sentiment in the commodity market is strong, which poses significant resistance to PTA’s rise. In the short term, prices will continue to operate weakly. As the traditional consumption peak season approaches, the downstream polyester operating load rate and terminal weaving machine operating rate are increasing, and there are still plans to put new polyester production capacity into operation. The expectation of demand recovery will benefit the market mentality.

In August, the price of asphalt in Shandong Province dropped significantly. From a national perspective, the decline was more pronounced in North China, and the decline intensified in the second half of the month. According to the analysis system of Business Society, the price in Shandong Province was 3633 yuan/ton on August 1st, and dropped to 3520 yuan/ton on August 31st, a decrease of 3.09%.

In August, crude oil rose and fell, but in the second half of the month, after a period of continuous decline, the decline in crude oil was significant, which had a significant impact on the entire futures market. However, from a cost perspective, it was bearish, and refinery production profits had recovered, leading to an increase in production enthusiasm and a significant increase in supply, which had a negative impact on the market.

During the rainy season, some areas experience significant rainfall, which hinders the demand for essential goods. Traders and deadline traders mainly offer low-priced shipments.

September is the traditional peak season, and on the demand side, there has been a decrease in precipitation in the northern regions of South China. Some terminal projects are rushing to complete, and there may be a significant improvement in demand. From the supply side, production continues to decline, significantly lower than the average level of previous years, and the main refinery supply has decreased.

From the perspective of Shengyi Society, with the arrival of the Golden September Silver Stone, the weather is improving and favorable for construction, and the supply-demand contradiction is significantly alleviated, which provides some support for the spot market price. It is expected that the price of asphalt may rise in the later period, and may be adjusted in the short term according to fluctuations in oil prices.

According to the monitoring of the commodity market analysis system of Shengyi Society, the magnesium ingot market in Shaanxi Province fell this week (8.19-8.23), with an average market price of 17933 yuan/ton at the beginning of the week and 17900 yuan/ton at the end of the week, a decrease of 0.19%.

This week’s market analysis

This week, due to the continued weak downstream demand, magnesium prices are under pressure and have slightly declined. The main production areas have slowed down the pace of market transactions. The manufacturer’s quotation has slightly decreased to cope with the off-season.

Supply and demand side

At present, the market situation is that the price of magnesium ingots is low, and factories are trying their best to stabilize the price. At the same time, there was news support from the purchasing side over the weekend, which strengthened the willingness of factories to raise prices. Strong bottoming out with a stabilizing trend.

comprehensive analysis

In the short term, the magnesium market is affected by procurement news, but the supply-demand imbalance in the market has not improved yet. Most of the demand side customers have a wait-and-see attitude and are placing orders cautiously this week. The market is expected to remain stable.

Market Overview

The market atmosphere for melamine this week is average, and overall, the fundamentals are weak. As of August 28th, the benchmark price of melamine in Shengyi Society was 6762.50 yuan/ton, a decrease of -0.92% compared to the beginning of this month (6825.00 yuan/ton). Due to the lack of favorable fundamentals and shipping pressure, enterprise prices have slightly loosened. In the short term, the market is weak and difficult to change.

Supply side

In August, the domestic urea market prices were weak and fell. As of August 27th, the ex factory price of urea in Shandong region is around 2010-2020 yuan/ton, in Hebei region it is around 2020 yuan/ton, in Henan region it is around 2000-2020 yuan/ton, and in Liaoning region it is around 2100 yuan/ton.

According to the Commodity Market Analysis System of Shengyi Society, as of August 27th, the reference average price of the domestic urea market was 2197 yuan/ton, a decrease of 5.67% from the reference average price of 2329 yuan/ton on August 1st.

In terms of demand

Recently, the melamine market has cooled down, and demand has been moderately followed up. It is reported that some sheet metal factories have recently reduced their operating load, and considering that the supply of melamine will increase in the later maintenance and restoration of multiple factories, downstream manufacturers and traders have reduced their demand for melamine procurement.

Overall, the operating rate continues to rise, and the operating rate of melamine will also be limited by profits. Domestic demand in September may weaken, and in the long run, the market lacks guiding factors and may mainly follow the trend.

According to the Commodity Market Analysis System of Shengyi Society, the domestic BDO market experienced a significant decline in August. From August 1st to 28th, the average price of BDO in China fell from 8928 yuan/ton to 8314 yuan/ton, with a price drop of 6.88% during the period and a year-on-year price drop of 27.61%.

At the beginning of the month, some devices were shut down for maintenance and replacement, resulting in a decline in the overall operating rate of the industry. But the downstream industry load has also decreased, resulting in a reduction in the digestion of raw materials. Manufacturers holding goods are under pressure to ship, and negotiations for discounts on actual orders are underway to promote sales. The market center of gravity is fluctuating downward.

In mid month, the early maintenance equipment was restarted and operated at a reduced load, resulting in weakened supply side support. Although the downstream industry has also seen an increase in load, there is still pressure on supply and demand within the market. Industry players have a bearish attitude towards purchasing and selling, and negotiations are underway to offer discounts on spot orders. As a result, the domestic BDO market continues to decline.

At the end of the month, the focus of the domestic BDO market continued to decline, with an overall increase in industry operating rates and an increase in market supply. However, the overall load of downstream industries is average, and the supply-demand contradiction highlights the bearish mentality of industry players in terms of purchasing and sales, leading to a volatile downward trend in the market.

Supply side: The market supply of goods has increased significantly, and the new production capacity of the second phase of Xinye has been put into operation, with weak support from the supply side. The favorable factors for BDO supply have weakened.

On the cost side, raw material calcium carbide: With the obvious oversupply in the calcium carbide market, the factory price continues to decline, and the enthusiasm of enterprises to start production remains low. However, downstream demand is still in a decreasing stage, and market sentiment is sluggish. In terms of methanol, the domestic methanol market rebounded in August, and the impact of BDO costs was mixed.

On the demand side, there is no significant change in downstream industry load, maintaining the follow-up of essential orders, and severely suppressing spot prices. There is a lack of obvious positive factors on the supply and demand side of the market, and business operators have a bearish attitude towards purchasing and sales. The demand side of BDO is affected by bearish factors.

Future forecast: Currently, market prices are at a low level, industry losses are intensifying, and the supply side’s stable market mentality is the main factor, which may limit the downward space. Business analyst BDO predicts that the domestic BDO market will continue to operate weakly.

1、 Price trend

According to the Commodity Market Analysis System of Shengyi Society, as of August 27th, the reference average price of the domestic urea market was 2197 yuan/ton, a decrease of 5.67% from the reference average price of 2329 yuan/ton on August 1st.

2、 Market analysis

market conditions

In August, the domestic urea market prices were weak and fell. As of August 27th, the ex factory price of urea in Shandong region is around 2010-2020 yuan/ton, in Hebei region it is around 2020 yuan/ton, in Henan region it is around 2000-2020 yuan/ton, and in Liaoning region it is around 2100 yuan/ton.

According to the weekly K-bar chart from May 27, 2024 to August 19, 2024, it can be seen that the domestic ammonium sulfate cycle is fluctuating. There was a significant decline in August, with the largest drop being -2.83% in the week of August 19th.

Supply and demand situation

In terms of supply, the urea market has ample supply this month. In terms of demand, agricultural demand maintains essential procurement. The operating rate and market of downstream compound fertilizers remain stable, with a focus on on-demand procurement of urea and mostly low-priced transactions. With the gradual increase of supply, the market is dominated by oversupply.

3、 Future forecast

The urea analyst from Shengyi Society believes that the supply of urea in the market has increased, and the recent trend of the urea market is downward. At present, market demand is still high, and downstream buyers are seeking lower prices. The industry is mainly cautious. It is expected that the domestic urea market prices will continue to weaken and consolidate in the short term.

1、 Price trend

According to the Commodity Market Analysis System of Shengyi Society, as of August 26th, the reference average price of 85% industrial grade thermal phosphoric acid in China is 6560 yuan/ton, which is 0.15% higher than the reference average price of 6550 yuan/ton on August 19th.

According to the Commodity Market Analysis System of Shengyi Society, as of August 26th, the reference average price of 85% wet process phosphoric acid in China was 6816 yuan/ton, which is 0.99% higher than the reference average price of 6750 yuan/ton on August 19th.

2、 Market analysis

The domestic phosphoric acid market has risen this week. As of August 26th, the ex factory price of 85% thermal phosphoric acid in Hubei region is around 6500-6700 yuan/ton, and the ex factory price of 85% thermal phosphoric acid in Sichuan region is around 6600 yuan/ton. The domestic market price for 85% wet process phosphoric acid is around 6800-6900 yuan/ton.

Cost end

In terms of raw material yellow phosphorus. This week, the market price of yellow phosphorus has risen, and manufacturers have a strong willingness to raise prices. At present, the supply and demand are relatively balanced, with limited new orders in the market and average market trading. Expected short-term consolidation and operation of yellow phosphorus market.

Raw material phosphate rock market. This week, the market price of phosphate ore has been running steadily, with the main focus on early orders. At present, the market supply and demand are balanced, and there is a shortage of supply in some areas. It is expected that domestic phosphate rock prices will remain stable in the short term.

Supply and demand side

This week, the spot supply of phosphoric acid in the market remains tight, with some wet process phosphoric acid plants shutting down and market inventory decreasing, providing favorable support for the supply side. Downstream demand is still acceptable, procurement enthusiasm has slightly increased, and the market transaction atmosphere has improved.

3、 Future forecast

Business Society’s phosphate analyst believes that the phosphate market has stabilized after a slight increase in recent days. At present, the raw material market is relatively strong and consolidating, and costs still have support. The market supply and demand situation is good. It is expected that the short-term phosphoric acid market will mainly experience price consolidation.

According to the Commodity Market Analysis System of Shengyi Society, the domestic PTA market remained volatile and weakly adjusted this week (August 19-23). The average spot price of PTA in East China was 5335 yuan/ton, a decrease of 2.04% from the beginning of the week. Insufficient cost support, coupled with an expected increase in accumulated inventory, is detrimental to the PTA market.

Looking at the future, two sets of PTA plants with a total capacity of 5 million tons in East China were briefly shut down last weekend and gradually restarted this week. A 1 million ton PTA plant in Southwest China is scheduled to restart on August 24th. The current operating rate of the domestic industry is around 86%, and the later announced PTA plant maintenance plan is limited. The market is concerned about the accelerated accumulation of PTA inventory.

On the cost side, concerns about the crude oil market, economy, and demand continue to exert pressure, but the trend of US oil destocking and the interference expectations of oil producing countries for the continuous decline in oil prices, as well as the impact of geopolitical risk factors, will cause crude oil prices to stabilize and rebound slightly. At present, the operating load of PX continues to be at a high level, but some PX factories have plans to shut down in September. At the same time, the increase in crude oil drive has provided some support for PX prices.

On the demand side, downstream polyester factories currently have no plans to shut down or reduce production of large facilities. The industry’s operating capacity remains around 83%, and there is limited room for improvement in operating capacity. Therefore, the demand for PTA remains weak. The peak season for traditional terminal demand is approaching. If demand rebounds as expected, it can boost confidence in the textile market and drive procurement enthusiasm. At present, most of them maintain a small amount of procurement for essential needs, with only a few downstream feedback showing signs of improvement in order volume. In the future, attention can be paid to the restart of the “Jin Jiu” polyester plant, or there may be a temporary phenomenon of buying at low prices.

Business analysts believe that the strengthening and consolidation of crude oil prices still provides support for PTA costs. However, the supply-demand contradiction of PTA is still prominent, and the peak demand season has not yet been concentrated. The positive driving force is not obvious at the moment, and the market is waiting for a turning point between the peak and off peak seasons. Short term PTA prices will continue to adjust weakly.