Market Trend Review
| Gamma-PGA (gamma polyglutamic acid) |
This week, the sulfur market continued its previous upward trend and showed a general upward trend. As of January 8th, the benchmark price of sulfur in Shengyi Society was 3860.00 yuan/ton, an increase of 5.44% compared to the beginning of this month (3661.00 yuan/ton). Shandong region has performed particularly well and has become the leader of this round of upward trend. Among them, Shandong Lihua Yi Group raised its price by 300 yuan/ton in a single day, with an increase of 8.1%, and the quoted price reached 4000 yuan/ton, greatly boosting market sentiment. In addition to Lihua Yi, major production enterprises such as Sinopec Qingdao Refinery and Shandong Dongming Petrochemical have also raised their prices, with increases ranging from 50 to 170 yuan/ton. The regions of East China, North China, South China, Northeast and Northwest have all shown a synchronous upward trend, and the domestic sulfur benchmark price center has significantly moved up compared to last week.
Driving factor analysis
The strong rise in the market this time is mainly driven by the resonance of supply and demand fundamentals:
1. Continuous tightening on the supply side:
In the international market, factors such as maintenance of some facilities in the Middle East and restrictions on exports from Russia have led to a reduction in global sulfur circulation resources. The contract prices of major exporting countries in January increased by about 22-25 US dollars/ton month on month, which pushed up the landed cost of imported sulfur in China. The converted RMB price has generally been above 4300 yuan/ton, forming an important cost support. Domestically, major production enterprises have started operating steadily, but there has been no significant increase in production capacity. The port inventory (taking solid sulfur as an example) remains relatively low at around 1.9 million tons, and has recently shown a slight trend of destocking, with tight supply of spot resources in the market.
2. Downstream demand enters peak season:
The demand for fertilizers has started: it is currently a critical period for “spring fertilizer and winter storage” in China. In order to ensure spring agricultural production, major agricultural producing areas such as Northeast China have taken the lead in initiating the procurement of raw materials for phosphate fertilizers. Sulfur, as an indispensable core raw material for the production of phosphate fertilizers (such as monoammonium phosphate and diammonium phosphate), has significantly increased in demand, forming the most direct and strongest driving force for price increases.
Stable demand in emerging fields: In addition to the traditional fertilizer industry, the demand for sulfur in the new energy industry also provides sustained support.
Specifically, let’s take a look:
Lithium iron phosphate cathode material: As an important cathode material for power batteries and energy storage batteries, the production of its precursor iron phosphate requires the consumption of sulfuric acid (made from sulfur). With the rapid development of new energy vehicles and energy storage industries, the indirect demand for sulfur in this field is steadily increasing.
The stocking demand in traditional fields such as chemical engineering before the Spring Festival also provides certain support to the market.
Regional market characteristics
Shandong: As a concentrated refining and important consumption area, the supply-demand game is fierce, and price changes are the most sensitive, leading the national upward trend. Solid and liquid sulfur prices are both at high levels nationwide.
East and South China: Due to high import costs and changes in port inventory, prices have shown a steady upward trend. Especially the spot prices at ports are influenced by both international and domestic demand.
North China and Northeast China: mainly following the linkage of major production areas, while the Northeast region directly benefits from the launch of spring storage demand, with strong price support.
Northwest and other regions: Prices are relatively lagging behind, but they are also rising synchronously under demand transmission and cost push.
outlook for the future market
Overall, favorable factors dominate the sulfur market in the short term. The tight supply situation is difficult to quickly ease, and international high prices will continue to be transmitted domestically. At the same time, the demand for spring plowing and fertilizer preparation season is in the release stage, and the procurement activities of downstream phosphate fertilizer enterprises and traders are expected to remain active. Therefore, it is expected that the overall sulfur price will maintain a strong oscillation trend.
However, the market also needs to pay attention to potential risks. On the one hand, we need to be vigilant about the potential suppression of downstream acceptance capacity caused by rapidly rising prices; On the other hand, it is necessary to closely monitor whether the relevant policy guidance of the country on “stabilizing prices and ensuring supply” of spring plowing fertilizers will introduce specific measures to stabilize excessive fluctuations in raw material prices. Overall, under the fundamental of tight supply-demand balance, the sulfur market will still be prone to rise but difficult to fall in the short term.
| http://www.lubonchem.com/ |