Monthly Archives: January 2025

Lead prices have slightly decreased this week (1.20-1.24)

According to the monitoring of the commodity market analysis system of Shengyi Society, as of January 24th, the price of lead 1 # was 16750 yuan/ton, a decrease of 0.21% from the lead price of 16785 yuan/ton on January 20th.

 

Gamma-PGA (gamma polyglutamic acid)

This week’s market analysis

 

As the Spring Festival holiday approaches this week, trading in the spot lead market has turned weak. Recently, there has been a significant reduction in transportation vehicles, leading to an increase in freight rates and constraining spot trading. At the same time, downstream enterprises are about to take a holiday, and with the rise in lead prices, some companies’ plans to stock up on dips before the holiday have been disrupted.

 

Native end

Part of the electrolytic lead plants provide accompanying quotes for delivery, with a slight reduction in the markup. The strong trend of lead prices this week has led to companies that originally planned to stock up adopting a wait-and-see attitude or directly canceling their inventory plans.

 

Regeneration end

The supply and demand in the spot market are both showing a weak trend. Most battery manufacturers have completed pre holiday stocking, resulting in a sluggish transaction of recycled lead. The price of lead in Shanghai remains relatively strong and volatile, and the supply of goods for holders is tight, resulting in a significant decrease in quotes compared to last week.

 

Demand side

Major lead-acid battery companies have basically entered a holiday period, and the procurement of raw materials and shipment of batteries have also gradually ended. Considering that logistics vehicles will be shut down no later than around January 23rd, downstream enterprises may use this time window to carry out the final nearby stocking work. The demand for lead consumption is showing further weakness.

 

comprehensive analysis

 

At the beginning of the week, as the holiday approached, the number of logistics vehicles gradually decreased. As a result, most downstream enterprises have suspended their procurement activities for lead ingots. Next week, coinciding with the arrival of the Chinese Lunar New Year, the logistics system will be completely shut down. In this context, spot trading of lead ingots will be suspended.

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Aluminum prices strengthen in January

Aluminum prices strengthen in January

 

Gamma-PGA (gamma polyglutamic acid)

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

 

Reasons for the increase in aluminum prices in January:

 

Lun Aluminum Drive:

 

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

 

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

 

The Trump Effect:

 

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

 

In the trend of domestic aluminum ingot destocking:

 

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

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Lead prices have slightly increased this week (1.13-1.17)

According to the monitoring of the commodity market analysis system of Shengyi Society, as of January 17th, the price of lead 1 # was 16780 yuan/ton, an increase of 0.51% compared to the lead price of 16695 yuan/ton on January 13th.

 

Gamma-PGA (gamma polyglutamic acid)

This week’s market analysis

 

This week, due to downstream companies stocking up before the holiday as usual, the lead market has been actively trading in the early stage. Waiting for stocking to be completed, due to the approaching traditional Spring Festival, the market is in a weak supply-demand state.

 

Native end

The inventory of primary lead refineries has decreased, and there is a shortage of warehouse receipts, with refinery pickup and shipment being the main focus.

 

Regeneration end

Waste batteries are prone to rise but difficult to fall, and the profits from recycling and smelting are relatively low, resulting in a reluctance to sell. During the week, some refineries resumed production one after another, and the market’s spot supply increased. Manufacturers actively shipped, and some lowered their premiums.

 

Demand side

Downstream enterprises purchase on demand, and low-priced sources of electrolytic lead are in high demand, resulting in a high level of activity in the spot market. As the Spring Festival holiday approaches, most downstream enterprises have completed pre holiday stocking, while a small number of enterprises continue to replenish their inventory, resulting in a gradual decline in spot trading.

 

comprehensive analysis

 

During the two weeks leading up to the Spring Festival, most companies are on vacation and logistics will soon be suspended. Downstream enterprises stock up according to convention. As the Spring Festival approaches and the number of corporate holidays increases, it is expected that the lead market trading will further weaken.

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The New Year’s flavor is gradually becoming stronger, and the melamine market is stable with small growth

1、 Market price trend

 

From the recent market prices, the price of melamine has indeed shown some stability and has shown a slight upward trend during certain periods. For example, according to the latest data from Shengyi Society, although the prices this week (based on January 21st as the reference date) have decreased compared to the beginning of the month, the daily increase is shown as 0.04%, indicating that there is a small upward space for prices on a specific date. This small fluctuation may be influenced by multiple factors, including raw material costs and market demand.

 

2、 Analysis of Supply and Demand Relationship

 

1. Supply side: The production capacity of melamine is relatively stable, and production enterprises in the industry usually adjust their production scale based on market demand and raw material costs. In a relatively stable supply situation, market prices are more likely to remain stable.

 

2. Demand side: The demand for melamine in downstream industries such as sheet metal and coatings is an important factor affecting market prices. With the recovery of the economy and the improvement of people’s living standards, the demand for melamine in these industries may gradually increase, thereby driving up market prices.

 

3、 Raw material cost

 

1. Raw material cost: The price fluctuation of raw material urea directly affects the production cost of melamine. When the price of urea rises, the production cost of melamine will also increase accordingly, which may drive up market prices. On the contrary, a decrease in urea prices may lower the production cost of melamine and exert some downward pressure on market prices. As of January 21st, the benchmark price of urea in Shengyi Society was 1705.00 yuan/ton, a decrease of -5.19% compared to the beginning of this month (1798.33 yuan/ton).

 

4、 Market outlook

 

Looking ahead, the melamine market is expected to continue to maintain a stable but rising trend. On the one hand, with the recovery of the economy and the increase in demand from downstream industries, the market demand for melamine is expected to further increase; On the other hand, integration and technological upgrading within the industry will help improve production efficiency and product quality, thereby enhancing market competitiveness. However, the fluctuation of market prices is still influenced by various factors, including raw material costs, policy regulation, international trade situation, etc. Therefore, enterprises need to closely monitor market dynamics and policy changes, and develop reasonable business strategies to cope with potential market risks.

 

In summary, the melamine market has indeed shown a stable but upward trend. However, this trend is not static, but is influenced and constrained by various factors. Enterprises need to closely monitor market dynamics and policy changes to address potential market risks and seize development opportunities.

Melamine

Negative pressure, metal silicon market weak and falling in January

According to the analysis of the Business Society’s market monitoring system, on January 21st, the reference price for the domestic silicon metal # 441 market was 11220 yuan/ton. Compared with January 1st (the market price for silicon metal # 441 was 11690 yuan/ton), the price decreased by 470 yuan/ton, a decrease of 4.02%.

 

Gamma-PGA (gamma polyglutamic acid)

From the market monitoring system of Shengyi Society, it can be seen that from January to present (1.1-1.21), the overall domestic spot market for silicon metal has shown a weak downward trend. The focus of the spot market for metal silicon in many regions of China is shifting downwards, including the market prices of metal silicon brands # 553, # 552, # 441, # 421, 3303, and other foreign silicon. As of January 21, the market price reference for oxygen # 553 in East China is around 10900-11000 yuan/ton, 441 # is around 11200-11400 yuan/ton, 521 # is around 11300-11600 yuan/ton, and 421 # is around 11500-11800 yuan/ton.

 

Analysis of Market Factors

 

Supply side: Currently, the overall operating rate of the domestic silicon metal market is at a low level, and there are few silicon metal factories in production in Yunnan and Sichuan regions. The market mentality is not good. In January, silicon metal factories continued to reduce production, and although inventory pressure was tight and accumulated slightly, demand conversion was not timely. The overall performance of the silicon metal supply side is still weak, providing limited support to the market.

 

On the demand side: The downstream market demand for silicon metal is cautious, and there are some essential orders in Xinjiang. The overall shipment of market inventory is slow, and there is insufficient market support from the demand side.

 

Market analysis in the future

 

At present, the pace of the Spring Festival is getting closer and closer. The fluctuation of the metal silicon market is not significant, and the market is mainly stabilizing and operating. The metal silicon data analyst of Business Society believes that in the short term, the domestic metal silicon spot market is mainly stable and operating, and specific changes in supply and demand information need to be paid more attention to.

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Analysis of Magnesium Market Trends in 2024 and Outlook for the Post-2025 Market

The average price of domestic magnesium ingots in 2024 was 20600 yuan/ton at the beginning of the year and 16266 yuan/ton at the end of the year, with an annual decline of 21.04%. The highest point of the year was 20633 yuan/ton on January 19th, and the lowest point of the year was 16000 yuan/ton at the end of December, with an average annual price of 18344 yuan/ton. The trend of the magnesium ingot market in 2024 can be divided into three stages: a significant downward adjustment at the beginning of the year, a slight upward rebound in stable prices in the middle of the year, and a continued downward dip at the end of the year.

 

Gamma-PGA (gamma polyglutamic acid)

K-bar chart of commodity prices, using the concept of price trend K-line, in the form of a bar chart, reflects the weekly or monthly price changes. Investors can make buying and selling investments based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-pillar represents the range of rise and fall. From the above chart, it can be seen that the magnesium ingot market rose for three months and fell for nine months in 2024. The largest monthly increase occurred in April, with a rise of 3.7%. The largest monthly decline occurred in March, with a drop of 6.88%.

 

The comparison chart of the annual trend of magnesium ingots from 2022 to 2024 shows that the market price of magnesium ingots is currently at its lowest level in recent years.

 

Analysis of Quarterly Price Trends in 2024:

 

first quarter

 

Starting from January 2024, magnesium prices have shown slight fluctuations. The manufacturer’s production is stable and the market supply is sufficient, but due to the approaching Spring Festival and the tense situation in the Red Sea, some export orders have been delayed, resulting in weakened demand and price reductions. Subsequently, the losses in the Lantan industry intensified, and some magnesium factories faced cost inversion pressure. However, downstream users stocking up in large quantities has reduced the inventory pressure of magnesium plants, and prices have slightly increased at one point. After the Spring Festival, with the completion of most downstream stocking, magnesium prices fell again, with this decline being the largest annual drop, and then magnesium prices stabilized. The mainstream price of magnesium metal in Fugu area has dropped to 17300-17500 yuan/ton, and market demand still needs to be boosted.

 

Second quarter

 

In mid March, magnesium prices rose for the first time after the Spring Festival, and market confidence slightly recovered. However, insufficient demand led to a further decline in magnesium prices, followed by a bottoming out and rebound. Due to severe losses, some manufacturers in Shaanxi, Inner Mongolia and other places have stopped production, resulting in reduced market supply and stimulating downstream demand. Magnesium prices have remained stable and risen to 18600-18800 yuan/ton. At the end of April, downstream users finished stocking up, demand weakened, and magnesium prices fell back to 18000-18100 yuan/ton. After the May Day holiday, downstream low-priced restocking led to a slight increase in magnesium prices. Subsequently, raw material prices rose, but downstream demand was limited, resulting in slight fluctuations in magnesium prices. At the end of May, the price of silicon iron raw materials rose significantly, driving up the price of magnesium.

 

Third quarter

 

Since June, downstream demand has been insufficient, raw material prices have decreased, shipping costs have risen, and external orders have decreased, resulting in a downward pressure on magnesium prices. Although there was an increase in sales volume during the second half of the year due to low prices and price recovery, there was weak demand follow-up, resulting in a further decline in magnesium prices. In early July, magnesium prices slightly increased. At the end of the month, due to some manufacturers resuming production and the market being cautious, transactions were limited, and magnesium prices fell again. The mainstream price in Fugu area dropped to 17600-17700 yuan/ton. From late July to early August, some manufacturers stopped production for maintenance, downstream procurement increased, and magnesium prices rose temporarily to 17900-18000 yuan/ton due to cost support. In mid August, downstream fear of high sentiment intensified, market inquiries decreased, transactions were light, and magnesium prices quickly fell to 17500-17600 yuan/ton.

 

Fourth quarter

 

At the end of August and the beginning of September, magnesium prices rose rapidly. In order to maintain market stability, manufacturers raised their prices uniformly, pushing up mainstream prices in the Fugu area. However, downstream demand is weak, shipping costs have been lowered, foreign procurement is scattered, and manufacturers’ shipments are not smooth. The actual transaction price has dropped to 17600-17700 yuan/ton. After the National Day holiday, magnesium prices rose due to market transactions during the holiday period and a slight increase in raw material prices after the holiday. Since mid October, downstream demand has been insufficient, market transactions have decreased, and magnesium prices have continued to fall to 16500 yuan/ton. Although there are favorable policies, it is difficult for demand to increase significantly, and there is no significant change in the supply side. Until the end of the year, the situation of oversupply continued, and magnesium prices fell to around 16000 yuan/ton. The lowest price in recent years.

 

Magnesium price forecast for 2025:

 

Raw material end:

 

In terms of the ferrosilicon market, it is expected that its price will fluctuate within the range of 6000 to 7500 yuan by 2025. The production commencement situation will be mainly affected by the adjustment of profit levels. Therefore, we need to continuously monitor the investment in new production capacity. If there is a lack of macro favorable policies, environmental protection measures for the industry itself, and dual control of energy consumption, it will be difficult for the price of ferrosilicon to achieve significant fluctuations.

 

Supply and demand side:

 

The magnesium market is currently facing the problem of weak downstream demand, and prices have mostly remained relatively low. As a result, some manufacturers have carried out routine maintenance operations due to losses. At present, the rotating maintenance of most manufacturers has been basically completed, and the production operation is stable. As the market gradually enters the peak demand season, if there are no other unexpected factors to interfere, the supply of magnesium metal market may increase slightly, and the overall market supply will show a sufficient trend. In the absence of other relevant policy influences, it is expected that the supply of magnesium metal market will remain overall stable by 2025. From the perspective of demand, there will not be a significant change in the downstream demand pattern. Some downstream enterprises in foreign countries have stopped production, resulting in weakened demand and continued weakness on the demand side.

 

Overall, the supply and demand sides in the magnesium market are in a game with each other. It is highly likely that the magnesium metal market will remain stable by 2025, with a slight rebound in magnesium prices before turning into a narrow range oscillation trend.

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News boosts aggregated MDI prices (1.13-1.17)

According to the Commodity Market Analysis System of Shengyi Society, from January 13th to 17th, the domestic aggregated MDI market operated relatively strongly, with an average price of 18233 yuan/ton at the beginning of the week and 18283 yuan/ton at the end of the week, an increase of 0.27% during the period and a year-on-year increase of 16.45%. The domestic aggregated MDI market saw a slight increase during the week, with ASEAN Wanhua MDI and Wanhua TDI prices set to rise by $200/ton. Boosted by news, the domestic MDI market saw a slight increase, with downstream demand entering the market and mainstream factories prioritizing export orders.

 

Gamma-PGA (gamma polyglutamic acid)

On the supply side, domestic facilities are maintaining stable operation. The 410000 ton/year facility in Jinhu, South Korea is scheduled to undergo maintenance starting from February 9th, lasting for about a month.

 

On the cost side, raw material pure benzene: Recently, the pure benzene market has seen a slight increase. As of January 17th, the benchmark price of pure benzene in Shengyi Society is 7531 yuan/ton. Raw material aniline: Currently, the domestic aniline market is stable. As of January 17th, the benchmark price of aniline in Shengyi Society is 9075 yuan/ton. The overall impact of aggregating MDI costs is relatively small.

 

On the demand side, downstream demand is following steadily, and the export market is performing well. As the holiday approaches and logistics is about to shut down, there are more concentrated deliveries.

 

Future forecast: The current trend of the aggregated MDI market is strong, with slow filling of goods sources and low inventory levels in the market. It is expected that the aggregated MDI market will operate strongly.

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MTBE market rises and then rapidly falls

According to the Commodity Market Analysis System of Shengyi Society, from January 13th to 17th, MTBE prices fell from 6562 yuan/ton to 5862 yuan/ton, with a price drop of 10.67% during the period, a month on month increase of 5.73%, and a year-on-year decrease of 8.22%. In the early stage, favorable factors such as the rise in crude oil prices and gasoline prices supported a wide upward trend, but there were many speculative factors involved in the price increase. Subsequently, the market returned to rationality, and the domestic MTBE market price fluctuated and fell, with a significant downward trend.

 

Gamma-PGA (gamma polyglutamic acid)

On the cost side, in terms of crude oil: International oil prices have risen, mainly due to favorable factors such as the US Treasury Department announcing new sanctions against Russia, market concerns about increased supply risks, and continued severe cold weather in some parts of the US and Europe, boosting fuel consumption demand. US commercial crude oil inventories have been declining for eight consecutive weeks. As of January 16th, the settlement price of the main Brent crude oil futures contract was $81.29 per barrel.

 

On the demand side, international crude oil futures have fluctuated upwards, and the market has been active in recent times under the stimulation of positive news. Refineries have raised their prices one after another, and some mid to downstream merchants have made moderate purchases under the buying sentiment. The market buying and selling atmosphere has heated up. Short term MTBE demand is influenced by favorable factors.

 

Supply side: Short term production may increase. Short term domestic MTBE supply is affected by bearish factors.

 

As of the close on January 16th, the closing price of the Asian MTBE market has increased by $6.06/ton compared to the previous trading day, with FOB Singapore closing at $760.36-762.36/ton. The closing price of the European MTBE market decreased by $4.75/ton compared to the previous trading day, and FOB ARA closed at $888.74-889.24/ton. The closing price of the MTBE market in the United States decreased by $5.56/ton compared to the previous trading day, and the FOB Gulf offshore price closed at $797.11-797.46/ton (225.07-225.17 cents/gallon).

 

The forecast for the future market is that terminal inventory will be moderately replenished before the holiday, but manufacturers also face pressure to reduce inventory. MTBE analysts from Shengyi Society believe that the domestic MTBE market is mainly experiencing slight fluctuations.

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Recent trend of alumina – caustic soda

In the first battle of 2025, alumina is the first to bear the brunt, experiencing consecutive trading days of decline, with the price center falling from 4800 yuan/ton to yesterday’s closing of 3809 yuan/ton. The previous rise was mainly due to the continuous escalation of fundamental tool contradictions and the driving force of financial strength. The recent loosening is due to:

 

Gamma-PGA (gamma polyglutamic acid)

1. Guinea’s aluminum ore supply has returned to normal, and alumina has experienced a rapid decline. Although its impact is limited, this news has stimulated bearish sentiment. It should be noted that the shortage of bauxite supply and the problem of limiting the release of alumina production capacity have been the focus of bullish speculation on alumina since 2024, and this contradiction has almost disappeared in recent market trends;

 

2. Since December, the continuous decline in overseas alumina prices has been an important reason for the turning point in domestic alumina futures and current prices. Coupled with the high cost pressure of electrolytic aluminum in China, aluminum plants find it difficult to accept high priced alumina, resulting in a significant drop in the average spot price;

 

3. Recently, a certain alumina plant in Shanxi resumed production, with a production capacity of 1 million tons. The overall production capacity operation rate has fluctuated and rebounded, and the supply has slightly increased. In the context of increasing supply margin, stable domestic demand, and narrowing export window, the social inventory of alumina has reached a turning point, and the tight supply-demand pattern is improving positively.

 

While alumina is heading south, caustic soda is experiencing the opposite trend, continuing the upward trend from the beginning of the year to the end of 2024, closing at 3194 yuan/ton yesterday. Core driver: The large-scale production of alumina is concentrated in the first half of the year, while the production of caustic soda is more concentrated in the second half of the year, and the production of caustic soda is often delayed due to energy consumption limitations, resulting in a low probability of overproduction. In the long run, after the comprehensive profit recovery, the previously reduced burden enterprises have already increased their burden. If no new equipment is put into operation ahead of schedule, the supply of caustic soda will lack elasticity. The production and stocking of alumina are being realized, and it is necessary to pay attention to the pace and intensity of stocking. Before the loss and production reduction of alumina, caustic soda is still being given more attention.

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In 2024, zinc prices was strong, and in 2025, zinc prices may show a trend of initially high and then low

Zinc prices show a strong trend in 2024

 

According to the Commodity Market Analysis System of Shengyi Society, in 2024, zinc prices showed a step up trend, with an overall increase of 19.48% in zinc prices. The average zinc price in 2024 was 21660.93 yuan/ton, and the center of gravity of zinc prices in 2024 has significantly shifted upward compared to 2023.

 

Unlike the low volatility of zinc prices in 2023, zinc prices in 2024 have shown a strong trend under the dual effects of macroeconomic favorable conditions and supply-demand mismatch.

 

Review of Zinc Market Trends

 

first quarter

 

In the early stage, due to macroeconomic pressure, the expectation of the Federal Reserve cutting interest rates continued to be postponed, and market sentiment tended to be pessimistic. Domestic zinc ore supply remains tight, and domestic and foreign processing fees have been successively reduced. After the Spring Festival, downstream consumption gradually rebounded, leading to a low rebound in zinc prices in late February. In March, a domestic lead-zinc mine ceased production, and foreign smelting capacity was also reduced, causing frequent market disturbances and driving zinc prices to continue to rise.

 

The European Central Bank has raised interest rates for the tenth consecutive meeting in response to inflation, raising the deposit rate from 3.75% to 4%, setting a historic high. The economy is weak, and the zinc market is bearish.

 

Second quarter

 

Foreign economic data shows positive trends, and a series of favorable policies have been introduced domestically, leading to increased expectations for market recovery. The tight supply of minerals continues, coupled with frequent maintenance of domestic smelters leading to a decrease in production, providing support for zinc prices due to weak supply side. Although the expectation of interest rate cuts has been postponed and the sentiment in the non-ferrous metal market has weakened, zinc prices have achieved the main increase of the year under the cumulative effect of multiple positive factors in the early stage.

 

Third quarter

 

From July to August, both the supply and demand sides showed weakness, and coupled with the economic data of the United States and China not meeting expectations, zinc prices showed a range oscillation pattern. In September, the Federal Reserve unexpectedly implemented a rate cut policy, and actively implemented domestic monetary and fiscal policies. Fundamentally, the tight supply of raw materials at the mining end and the decline in processing fees have triggered domestic smelters to reduce production, resulting in a sustained upward trend in zinc prices

 

Fourth quarter.

 

With the dust settled on the US election results, the strong US dollar limited the rebound space of zinc prices, and zinc prices gradually returned to fundamental dominance. Although the supply contradiction was not resolved at the end of the year, the market speculation hotspots had subsided, and coupled with weak demand in the off-season, zinc prices showed a range consolidation trend.

 

2024 Zinc Ore Status and 2025 Expectations

 

In 2024, global zinc concentrate production is expected to be approximately 12.11 million tons, a decrease of 1.5% year-on-year, or approximately 200000 tons, marking the third consecutive year of year-on-year decline in global zinc ore production.

 

Production resumption and increase project

 

In 2024, the tight supply situation in the zinc ore market will only slightly ease, mainly constrained by multiple factors such as declining ore grades, extreme weather, reduced capital expenditures of mining enterprises, and the continuation of suspended projects. Despite the expectation of resuming production and increasing output, as well as the future large-scale production of zinc mines, the actual import volume of zinc mines in China is still limited during the year. Looking ahead to 2025, the supply of zinc ore is expected to become more relaxed, with projects such as Huoshaoyun Lead Zinc Mine, Hunan Naonaopo Lead Zinc Mine, and Lanping Lead Zinc Mine expected to become the main sources of incremental production, with an estimated capacity increase of about 120000 tons. However, attention should be paid to factors such as safety and environmental protection requirements, ore quality, and mining progress that may lead to actual incremental adjustments, with an estimated actual increase of about 100000 tons.

 

In addition, it is also necessary to pay attention to factors that affect the actual production of the mining end: declining ore grade, extreme weather effects, decreased capital expenditures of mining enterprises, and continued shutdown of projects

 

Analysis of Refined Zinc Production

 

2024

 

The global refined zinc production in 2024 is 13.78 million tons, a year-on-year decrease of 2%.

 

From January to November 2024, China’s cumulative refined zinc production was 5.675 million tons, a year-on-year decrease of 5.9% or 357000 tons. It is expected that the domestic production will be 6.16 million tons in 2024, a year-on-year decrease of 6.9% or 460000 tons.

 

2025

 

The global refined zinc production is expected to increase slightly by 1.2% year-on-year to 13.94 million tons in 2025. It is expected that the domestic zinc production growth rate will be around 4.3% by 2025, reaching 6.43 million tons.

 

Zinc demand analysis

 

Infrastructure and power grid:

 

Infrastructure and power grid use zinc, which accounts for approximately 33% of zinc demand

 

According to the data released by the National Bureau of Statistics, from January to October 2024, the national fixed assets investment (excluding farmers) will reach 42322.2 billion yuan, an increase of 3.4% compared with the same period last year. Among them, the total amount of private fixed assets investment was 21277.5 billion yuan, a slight decrease of 0.3% compared with the same period. Within the tertiary industry, infrastructure investment (excluding electricity, heat, gas, and water production and supply industries) increased by 4.3% year-on-year. The investment in water management industry has increased significantly, with a growth rate of up to 37.9%; Investment in the air transportation industry followed closely behind, growing by 19.2%; The investment in railway transportation industry also achieved a growth of 14.5%.

 

From January to October 2024, the cumulative investment in power grid projects reached 450.2 billion yuan, a year-on-year increase of 20.7%; The planned completion target of State Grid Corporation of China in 2024 may exceed 500 billion yuan, slightly lower than the 520 billion yuan in 2023. Driven by the national policy of building a power system with new energy as the mainstay, the proportion of new energy power generation installed capacity in China has rapidly increased. It is expected that within the next three years, the proportion of distribution end investment in the power grid will exceed 60%. Strengthen the backbone architecture of the power grid and accelerate the development of intelligent distribution networks, thereby continuously promoting the growth of zinc demand in the power industry. In addition, the energy storage field has undoubtedly brought significant growth to the application of zinc in the power industry.

 

Policy boost, real estate downturn or slowing down:

 

From January to October 2024, the total construction area of real estate development enterprises’ houses was 7206.6 million square meters, a year-on-year decrease of 12.4%, of which the residential construction area decreased by 12.9%. The newly started and completed areas also decreased by 22.6% and 23.9% respectively, and the residential category also showed a corresponding decline. Despite the impact of real estate data on the production rate of die-casting zinc alloys, the demand for die-casting zinc alloys (especially for car door handle manufacturing) has been boosted by the growth in automobile exports. As a result, the production rate of die-casting zinc alloys remained strong throughout the second half of 2024, reaching its highest point in nearly four years.

 

Home appliances bring incremental growth to zinc, with an expected slowdown in growth rate by 2025

 

Home appliances account for 21.5% of zinc consumption

 

Mainly stimulated by national subsidy policies and the Double Eleven shopping festival, the domestic market not only achieved a significant increase in total volume, but also showed a significant trend of optimizing and upgrading product structure. In terms of exports, in addition to the normal export of seasonal products, some enterprises have planned orders in advance due to the uncertainty of the international trade environment, resulting in a sharp increase in export volume. According to a report released by the National Bureau of Statistics, the national refrigerator production in October 2024 was 8.971 million units, a year-on-year increase of 6.8%; The cumulative production from January to October was 87.276 million units, a year-on-year increase of 8.5%. Looking ahead to 2025, given the expectation of a soft landing in the US economy, the demand for air conditioning exports is expected to decline, but the extent is limited. However, attention should be paid to the red ocean crisis caused by the early overdraft of market demand, and at the same time, the downward trend of the domestic real estate market is expected to slow down, which will relatively reduce its negative impact on the home appliance industry. Overall, it is expected that the demand for household appliances in 2025 will remain basically the same as in 2024, or slightly decrease.

 

The rapid growth of automobiles (including new energy) continues:

 

Automobiles account for approximately 18% of zinc consumption

 

According to data from the China Association of Automobile Manufacturers, in October 2024, China’s automobile production and sales volume were 2.996 million and 3.053 million respectively, with a month on month increase of 7.2% and 8.7%, and a year-on-year increase of 3.6% and 7%, respectively. The cumulative production and sales volume from January to October reached 24.466 million and 24.624 million vehicles, an increase of 1.9% and 2.7% respectively year-on-year. The production growth rate slightly decreased by 0.01 percentage points, while the sales growth rate expanded by 0.36 percentage points.

 

The rapid growth of the automotive industry has strongly promoted the recovery of zinc oxide production rate. Although automotive sheet is an important application area of galvanized sheet, its market demand is affected by the healthy growth of automobile production and sales. However, due to the weight disadvantage of galvanized sheet, it is mostly used in traditional mid to high end fuel vehicles. Therefore, the current automobile production and sales data has limited boosting effect on the galvanized sheet industry. Looking ahead, with the continuous expansion of the proportion of new energy vehicle production and sales, the market demand for galvanized automotive sheet may gradually decrease.

 

Market forecast for 2025

 

In 2024, the tight supply situation in the zinc ore market will only slightly ease, mainly constrained by multiple factors such as declining ore grades, extreme weather events, reduced capital expenditures by mining companies, and continued production shutdowns. Despite the resumption of production and the launch of new large-scale zinc ore projects, the actual import volume of zinc ore in China was still limited during the year. It is expected that the supply of zinc ore will gradually ease from 2025 onwards. Looking ahead to 2025, with the improvement of supply conditions in the mining sector and the resumption of production in overseas mines, processing fees are expected to stabilize and rebound, boosting the production enthusiasm of domestic smelters. Given the conduction time, the domestic refined zinc production is expected to be approximately 6.45 million tons by 2025.

 

According to the latest customs data, the cumulative import volume of refined zinc from January to October 2024 increased by 23.43% year-on-year to 377600 tons. The import volume is expected to remain high in the fourth quarter, and the annual import volume may exceed 450000 tons. In 2025, the refined zinc production of domestic smelters is expected to significantly increase, thanks to the release of smelting capacity and improvement in raw material supply, which will alleviate the supply pressure in the domestic market and may suppress the import of zinc ingots. It is expected that the import volume will slightly decline. The global zinc ingot surplus is expected to be 180000 tons, including 100000 tons in China and 80000 tons overseas.

 

The outlook for the zinc consumption market in 2025 is optimistic, and zinc prices may continue the trend of high prices in the first half of the year and falling in the second half.

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