Since the end of August, the overall commodity market situation has shown an upward trend (see Figure 1). The futures sector, including soda ash, glass, synthetic rubber, and styrene, has experienced a surge in prices. Driven by the expected reduction in international crude oil production, the energy and chemical sector has overall improved. The impact of high oil prices on inflation may increase the expectation of the Federal Reserve raising interest rates. On September 6th, after the news surfaced, the sustainability of current high oil prices and the upward space narrowed. Where will precious metal prices go in the future?

Expected realization of crude oil production reduction

Saudi Arabia and Russia are fulfilling their production reduction commitments. Saudi Arabia’s voluntary production reduction measures of 1 million barrels per day will continue until September (the production reduction plan is evaluated monthly to determine whether to continue), and Russia’s crude oil exports will be reduced by 500000 barrels per day in August, with subsequent reductions of 300000 barrels per day. The OPEC organization maintains its previous production reduction policy of 3.66 million barrels per day, which is constrained by the production reduction of major oil producing countries, and the crude oil supply side continues to tighten. Global refinery profits are at a five-year high. The main risks on the supply side lie in Iran’s expectation of increasing production and the United States considering relaxing sanctions against Venezuela.

At present, the expected reduction in crude oil production has been fulfilled, and the news is positive with early overdraft, which has been reflected in the recent oil price, and the upward space in the later stage has narrowed. Currently, oil prices are in the high price range.

In the early stage, the correlation between precious metals and crude oil trends is strong. After the second half of 2022, precious metal prices have bottomed out and stabilized, and the magnitude of macro factors affecting them has begun to show differentiation. The trend of precious metals and crude oil began to converge in late March, but after mid April, the trend began to diverge again. Mainly due to the increased impact of risk aversion on the rise of precious metal prices. Recently, crude oil prices have rebounded, and precious metal prices have also followed suit.

Comparison of precious metal gold and silver price trends in the past year

In 2022, the rise and fall trends of precious metal gold and silver have converged, but the decline in silver was deeper from April to August, and the recent recovery has been more significant. In December, silver continued its strong trend last month, and gold began to consolidate at high levels. In 2023, precious metal gold and silver have consolidated at high levels, with a slight decline in February. Since March, precious metal prices have started to rise. Silver prices began to decline in May, while gold remained relatively strong. In June, gold prices reached a high level and silver prices began to rise.

Future Market Forecast

At present, the price of precious metals has been fluctuating in the high range after hitting a 10-year high in the early stage. In the early stage, we expected that under the high inflation and high interest rate hikes, the pace of overseas economic recession may lead to a relatively strong sense of risk aversion, which is currently reflected in prices. Some central banks around the world have increased their holdings of gold reserves, which has also provided some support for gold prices.

However, in the near future, it is still necessary to focus on watching the Fed’s interest rate hike expectations. The next two weeks will see the release of US CPI data and the Federal Reserve’s interest rate resolution. Currently, inflation in the United States is still too high, and most officials do not support immediate policy easing. High oil prices have an impact on inflation. If inflation unexpectedly rises, further tightening policies will be supported, which may make the Federal Reserve inclined to raise interest rates. This will suppress the price of precious metals. In the short term, the upward space for precious metal prices has narrowed, and the probability of narrow range fluctuations has increased.

According to the Commodity Market Analysis System of Business Society, the hydrogen peroxide market continued to rise in early September. On September 5th, the average market price of hydrogen peroxide was 1500 yuan/ton, with a daily increase of over 4%.

Terminal demand improving, hydrogen peroxide market rising

The demand for terminal caprolactam and papermaking industries has increased, and the operating rate of domestic hydrogen peroxide manufacturers is relatively low. The market supply is tightening, and the market is constantly rising. The mainstream quotation has risen to 1500 yuan/ton, an increase of 25% compared to early August. Prediction: Supply is tightening, the peak consumption season is approaching, and the hydrogen peroxide market is still expected to rise in the future.

Business Society Hydrogen Peroxide Analysts believe that there is still room for improvement in the future hydrogen peroxide market due to the increase in terminal rigid demand.

Product name: isobutyraldehyde

Latest price (September 4th): 8933.33 yuan/ton

On September 4th, the domestic market price of isobutyraldehyde significantly increased, with a price increase of 700 yuan/ton or 8.50% compared to September 1st, and a year-on-year increase of 14.04%. The price of raw material propylene has significantly increased, leading to increased cost support. The downstream market for new pentanediol has stabilized at a high level, and downstream customers have a good enthusiasm for purchasing isobutyraldehyde. Duo Zhong Li is good, and the market price of isobutyraldehyde has significantly increased.

In the future, it is expected that the domestic market price of isobutyraldehyde may fluctuate and rise, with consolidation being the main focus. The average market price is around 9200 yuan/ton.

List of ethylene glycol prices

According to data from Business News Agency, on September 1st, the average price of domestic oil to ethylene glycol was 4136.67 yuan/ton, an increase of 1.89% compared to the beginning of the month. The prices in various regions are as follows:

The price range for spot goods executed by mainstream manufacturers in East China is between 3950-4200 yuan/ton; The spot price of ethylene glycol in the South China market is 4050 yuan/ton, while the price range for mainstream manufacturers in Central China is 3950 yuan/ton; The spot price for mainstream manufacturers in North China is 4350 yuan/ton.

The factory price of coal based ethylene glycol is low, with a current price range of 3550-3700 yuan/ton.

On August 31st, the CIF price of ethylene glycol in China was 466 US dollars/ton; The CIF Southeast Asia price is 481 US dollars per ton.

Ethylene glycol fundamentals

The port inventory is high and in a continuous accumulation state; On the supply side, there is an expectation of an increase in production due to the restart of equipment in the early stage; On the demand side, the sustainability of polyester’s high start-up rate needs further observation. The supply and demand fundamentals of ethylene glycol are relatively weak, but the cost support has recently strengthened. The upward trend in crude oil prices and the synchronous increase in coking coal prices have formed strong cost support for ethylene glycol. The recent game point is whether the emotional benefits brought by cost factors can suppress the reality of weak fundamentals.

According to the Commodity Market Analysis System of the Business Society, the domestic TDI price trend was fluctuating in August. At the beginning of the month, the average TDI market price was 18100 yuan/ton, and at the end of the month, the price was 18500 yuan/ton. Within the month, it increased by 400 yuan/ton, an overall increase of 2.21%.

In August, the TDI market experienced a high level of volatility and overall performance was relatively strong. At the beginning of the month, TDI prices rose significantly, mainly due to the dense supply of positive news from suppliers, and strong demand from holders. Overseas BASF in South Korea and Mitsui TDI devices in Japan shut down, foreign supply tightened, and domestic orders improved. At the same time, news of a device load reduction by a large factory in North China was released, and on-site spot supply was tight, supporting a significant increase in TDI prices; By the 17th, TDI prices fluctuated within the range, and at this stage, spot prices continued to be tight. Downstream demand followed up, and trading in the trade market was moderate. The market mentality was mostly wait-and-see; In the later stage, demand weakens, downstream follow-up is limited, and the trade market mentality is entangled. Some holders have reported downward, and the focus of market transactions continues to decline slightly.

The upstream toluene market rose narrowly, with a price of 8090 yuan/ton at the end of the month, an increase of 230 yuan/ton or 2.93% compared to the price of 7860 yuan/ton at the beginning of the month. On the cost side, the price of naphtha fluctuates and increases, and the rise in raw material prices is good for toluene support. The international crude oil price fluctuates at a high level, and toluene cost support still exists. At the same time, driven by the increase in exports, the toluene market is operating at a high level.

According to the TDI data analyst from the Business Society, the supplier’s stock situation is tight, and the factory’s attitude towards the market is mainly positive. Downstream customers have a resistance towards high prices, and their enthusiasm for entering the market is average. Market trading is light, and there is insufficient support for positive market conditions on the market. Under the supply and demand game, it is expected that the TDI market will remain stagnant in the future, and specific attention will be paid to downstream follow-up.

Overview of Boric Acid Market

According to the Commodity Market Analysis System of the Business Society, the price of boric acid was relatively stable in August. As of August 30th, the average market price of boric acid in China was 7390 yuan/ton, an increase of 0.03% compared to the beginning of the month. However, compared to the beginning of the year, the average market price was 8100 yuan/ton, a decrease of 8.77%.

At present, the external quotation for imported goods is concentrated at 7000-8200 yuan/ton (the actual transaction price of different brands, specifications, and products is mainly negotiated). According to the Commodity Market Analysis System of Business Society, the average market price of imported boric acid is 7681.82 yuan/ton, an increase of 0.96% compared to the average market price at the beginning of the month.

Business Society Boric Acid Analysts believe that boric acid is gradually entering the long short game stage, with prices mainly fluctuating sideways.

Overview of Boric Acid Market

According to the Commodity Market Analysis System of the Business Society, the price of boric acid was relatively stable in August. As of August 29th, the average market price of boric acid in China was 7390 yuan/ton, an increase of 0.03% compared to the beginning of the month. However, compared to the beginning of the year, the average market price was 8100 yuan/ton, a decrease of 8.77%.

At present, the external quotation for imported goods is concentrated at 7000-8200 yuan/ton (the actual transaction price of different brands, specifications, and products is mainly negotiated). According to the Commodity Market Analysis System of Business Society, the average market price of imported boric acid is 7681.82 yuan/ton, an increase of 0.96% compared to the average market price at the beginning of the month.

Business Society Boric Acid Analysts believe that boric acid is gradually entering the long short game stage, with prices mainly fluctuating sideways.

List of ethylene glycol prices

According to data from Business News Agency, on August 28th, the average price of domestic oil to ethylene glycol was 4060 yuan/ton, a decrease of 1.97% compared to 4141.67 yuan/ton at the beginning of the month. The prices in various regions are as follows:

The price range for spot goods executed by mainstream manufacturers in East China is 3900-4160 yuan/ton; The spot price of ethylene glycol in the South China market is 4050 yuan/ton, while the mainstream manufacturers in Central China have a spot price range of 3900 yuan/ton for external execution; The spot price for mainstream manufacturers in North China is 4160 yuan/ton.

On August 24th, the CIF price of ethylene glycol in China was 467 US dollars/ton; The CIF Southeast Asia price is $469 per ton.

Ethylene glycol fundamentals

Affected by the reduction in raw material crude oil production in July and the upward trend in domestic coal prices, the cost support for ethylene glycol has strengthened compared to the previous period.

On the demand side: downstream polyester maintains high operating rates, with a polyester operating rate of over 90%; Terminal new orders followed up slightly month on month, but remained at a low level year-on-year.

From the supply side, the operating rate of domestic ethylene glycol is still high, and some devices have restarted. Shenghong Refining and Chemical’s 1 million ton unit has been lifted to 70-80%, and the Shaanxi Coal Yulin unit has been restored. Currently, it is still in the stage of oversupply.

In terms of port inventory, as of August 28th, the inventory of ethylene glycol at the East China main port was 1.0716 million tons. Recently, there has been a concentration of port arrivals, and there is a phenomenon of accumulated inventory in the data.

Ethylene glycol callback in August

In July, due to the influence of raw material prices, there was strong support for the cost of ethylene glycol; However, the supply and demand fundamentals are still weak, and after the correction of ethylene glycol prices in August, they gradually entered the gaming platform range. At present, the supply and demand of ethylene glycol are both strong, and it is expected to enter a fluctuating range in the short term, with a weak trend at present.

1、 Price trend

According to the monitoring of the commodity market analysis system of the Business Society, the spot price of PVC carbide SG5 has risen this week. Last Friday, the average domestic PVC price was 6028 yuan/ton, and this Friday’s average price was 6192 yuan/ton, with a price increase of 2.72% during the week.

2、 Market analysis

The domestic spot market price of PVC has risen this week. Upstream calcium carbide prices have risen this week. On Wednesday and Thursday, the PVC stock market continued to rise, and spot prices gradually followed suit, making it difficult to find low-priced sources of goods. However, downstream market demand is average, resisting high prices, and actual order follow-up is slightly insufficient. As of now, the quotation range for PVC5 carbide materials in China is mostly around 6050-6350 yuan/ton.

On August 24th, international crude oil futures slightly increased. The settlement price of the main contract for WTI crude oil futures in the United States was $79.05 per barrel, an increase of $0.16 or 0.2%. The settlement price of the main contract for Brent crude oil futures was $83.36 per barrel, an increase of $0.15 or 0.2%.

In terms of calcium carbide, according to data monitored by the Business Society, the prices of calcium carbide manufacturers have increased this week. Last Friday, the average price of calcium carbide was 3133.33 yuan/ton, while this Friday’s average price was 3183.33 yuan/ton, with a price increase of 1.6% during the week. Upstream blue charcoal prices have stabilized at a low level, with average cost support. Downstream PVC prices have risen, and demand for calcium carbide has increased. In the future, it is expected that the factory price of calcium carbide in the northwest region may slightly increase, with consolidation being the main focus.

3、 Future Market Forecast

PVC analysts from Business Society believe that the trading atmosphere in the PVC spot market this week is still good, with futures prices rising, driving confidence in the spot market. Upstream calcium carbide prices have increased, providing strong support and benefiting the PVC market. It is expected that the PVC market will stabilize and consolidate in the short term, and we will closely monitor changes in the news.

According to the analysis system of the commodity market of the Business Society, as of August 24th, the price of PET water bottles has been stable, with an average price of 7320.00 yuan/ton. Compared to the same period last week, the price has been mainly stable, and the market supply and demand are balanced. Currently, the mainstream price is around 7200 yuan/ton.

This week, the domestic PET price remained stable and weak, with a narrow range compared to the same period last week. Currently, the focus of negotiations is stable and the mainstream price is around 7200 yuan/ton. Downstream restocking is on demand, and the negotiation atmosphere is average. Manufacturers mainly offer discounts and take orders, while upstream cost support is average, and stable operation is the main trend.

Rubber and plastic commodity index: On August 23, the rubber and plastic index was 674 points, an increase of 2 points from yesterday, a decrease of 36.42% from the highest point in the cycle of 1060 points (2012-03-14), and an increase of 27.65% from the lowest point of 528 points on April 6, 2020. (Note: The cycle refers to the period from December 1st, 2011 to the present).

PET analysts from Business Society believe that the PET market is expected to operate in a narrow and weak range in the short term, with prices remaining around 7200 yuan/ton.