August is already halfway through, and the off-season atmosphere in the textile market continues in the yarn and downstream markets. Last week (August 12-18), the viscose staple fiber market remained stable, with little price change. The market for raw material dissolution pulp remains stable, with cost support remaining. The demand in the end market is still light, and yarn manufacturers are following up on demand. The demand side performance is average, and the speed of on-site shipment is average. Many operators adopt a cautious and wait-and-see attitude.

Price trend of viscose staple fiber

According to the Commodity Market Analysis System of Shengyi Society, the price of adhesive short fibers remained stable last week (August 12-18). As of August 18th, the domestic factory price for 1.2D * 38mm adhesive short fiber is 13500 yuan/ton, which is the same as the previous week’s price. Compared to the beginning of the year, the price of 12900 yuan/ton has increased by 4.65%.

Cost side support still exists

The upstream raw material end main material dissolution slurry market is strong and stable. As of now, the price of domestic dissolution slurry is around 7800 yuan/ton, the price of external broad-leaved slurry is around 960 US dollars/ton, and the price of coniferous slurry is around 1040 US dollars/ton. The prices of auxiliary materials in the market have fluctuated, with prices in the upstream main raw material dissolution slurry market and sulfuric acid market remaining firm and stable. The liquid alkali market has experienced a narrow decline, while the adhesive short fiber market still has support.

Low inventory, still available supply

The pre maintenance equipment of the adhesive short fiber market has resumed normal operation, and most manufacturers’ equipment is running stably. The on-site operating rate is at a high level, and the current daily operating rate of the industry is around 83.72%. However, with the gradual delivery of orders from manufacturers in the early stage, the tight supply on site has been alleviated, and the inventory levels of various adhesive short fiber manufacturers are still at a low level. The performance of the supply side is still acceptable.

The demand side still appears sluggish

The transaction atmosphere in the downstream cotton yarn market is flat, and prices are stagnant and consolidating. As of August 18th, the average ex factory price of human cotton yarn (30S, ring spun, first-class product) is 17375 yuan/ton. The end market is still in the off-season of demand, and downstream yarn manufacturers have insufficient new orders. The overall operating rate of the industry is not high, and most yarn factories replenish their inventory to maintain normal machine operation. The demand side performance is average, and the new round of signed orders on site will last for about a month.

Future forecast

The raw material market remains strong and stable, with continued positive support from the cost side. The market supply is at a high level, and some manufacturers have eased their supply shortages. Downstream enterprises have average purchasing power, and multidimensional demand for goods is high. It is currently the off-season for textiles, and downstream demand for adhesive short fibers is unlikely to show significant signs in the short term. There are both positive and negative factors in the market. Overall, it is expected that the adhesive short fiber market will mainly maintain stable operation in the short term, with limited price fluctuations, and the price is expected to be in the range of 13500-13600 yuan/ton.

According to the Commodity Market Analysis System of Shengyi Society, as of August 16, 2024, the reference price of n-butanol in Shandong Province, China was 7300 yuan/ton. Compared with August 11 (reference price of n-butanol was 7600 yuan/ton), the price has decreased by 300 yuan/ton, a decrease of 3.95%.

From the Commodity Market Analysis System of Shengyi Society, it can be seen that in early August, the overall market situation of n-butanol in Shandong Province, China, was weak and declining. Entering this week, at the beginning of the week, the decline in the n-butanol market did not stop, and the n-butanol market continued to decline. As the weekend approached, the market stopped falling and stabilized. As of August 16th, the reference price for n-butanol market in Shandong Province, China is 7300-7400 yuan/ton.

Analysis of Factors Influencing the Market Situation of n-Butanol

In terms of demand: Currently, the overall performance of downstream demand for n-butanol is average. Under the continuous downward trend of n-butanol market, there is a strong wait-and-see sentiment in the market. Downstream demand is cautious in stocking up, and downstream users mainly purchase small orders for basic needs. The support for n-butanol from the demand side is insufficient.

Supply side: Currently, there is little change in the supply side of n-butanol, and the overall supply side is still relatively loose, with limited support from the supply side for n-butanol.

Market price situation of n-butanol

Region/ Product/ August 16th

Shandong region/ N-butanol/ Around 7300-7400 yuan/ton

North China region/ N-butanol/ Around 7300-7450 yuan/ton

South China region/ N-butanol/ Around 7700-7800 yuan/ton

East China region/ N-butanol/ Around 7300-7500 yuan/ton

Market analysis in the future

At present, the overall market price of n-butanol is running at a low level. After the market drops to a low level, some downstream stocking and purchasing intentions have slightly increased. Coupled with the approaching weekend, some factories have stopped for maintenance, and the supply of n-butanol in the market is tight. As the market situation approaches the weekend, the shipment situation improves. The n-butanol data analyst of Business Society believes that in the short term, the domestic n-butanol market situation may usher in a turning point, and the specific trend still needs to pay attention to the changes in supply and demand news.

Since May this year, lithium carbonate has continued to decline from around 110000/ton. According to the commodity analysis system of Shengyi Society, as of August 15th, the average price of domestic battery grade lithium carbonate was 86000/ton, a decrease of 24% compared to the same period in May, and the average price of industrial grade lithium carbonate was 83000/ton, a decrease of 21% compared to the same period in May.

Since 2021, with the hot sales of electric vehicles and the rise of the energy storage market, the demand for lithium carbonate as a key material for lithium batteries has been continuously increasing. In a short period of time, prices keep rising again and again, resulting in a shortage of supply. From 40000 tons per ton in 2020 to 600000 tons per ton in 2022. The performance of lithium mining enterprises has shown explosive growth, causing a trend of following the trend, expanding production capacity within the industry, and also investing in the production of lithium carbonate outside the industry, aiming to catch up with the upward cycle.

According to data from the Ministry of Industry and Information Technology, China’s lithium carbonate production in 2021 was 240000 tons, a year-on-year increase of 40.4%. By 2023, China’s lithium carbonate production capacity will soar to 1.1 million tons, with a production of 517900 tons, a year-on-year increase of 31.1%. In two years, the production capacity of lithium carbonate has increased by about 3.6 times. Such a large expansion of production capacity exceeded market expectations, ultimately leading to overcapacity and causing the price of lithium carbonate to continue to decline, dropping from 600000/ton to the current 80000/ton.

Although the actual cost of lithium carbonate varies depending on different mineral deposits, mining processes, and regions, 80000 yuan/ton is the recognized cost line in the industry. This means that the current price is sufficient to prevent companies from making profits or even incurring losses. Recently, more than ten lithium mining companies have released performance reports showing a decline in performance, with the two major domestic lithium industry giants experiencing losses.

In this situation, lithium mining companies have announced production shutdowns and reductions. But it has not boosted the market, and overcapacity still exists. The downward trend of lithium carbonate continues, and high cost production capacity may face elimination.

According to the Commodity Market Analysis System of Shengyi Society, as of August 12, 2024, the reference price of n-butanol in Shandong Province, China was 7433 yuan/ton. Compared with August 1 (reference price of n-butanol was 7933 yuan/ton), the price has decreased by 500 yuan/ton, a decrease of 4.20%.

From the commodity market analysis system of Shengyi Society, it can be seen that in early August, the overall n-butanol market in Shandong Province, China, experienced a narrow downward trend, with strong market sentiment and cautious downstream demand. Subsequently, the decline in the n-butanol market intensified, and major factories in Shandong lowered their n-butanol shipment prices by about 200-300 yuan/ton. The overall market focus declined. As of August 12th, the n-butanol market price in Shandong Province was around 7300-7400 yuan/ton, with a decline of 6.3% in the latter half of the year.

Analysis of Factors Influencing the Market Situation of n-Butanol

On the demand side: Due to the continuous decline of more than 20 days, there is a strong wait-and-see sentiment in the n-butanol market, which has affected the purchasing enthusiasm of downstream markets. Currently, downstream n-butanol is mostly purchased with caution for essential needs, and the demand side has failed to provide effective market support.

On the supply side: Currently, the overall supply of n-butanol is relatively stable, with ample on-site supply and some regions facing supply pressure. Recently, the overall capacity utilization rate of n-butanol has decreased compared to the end of July, and the support provided by the supply side to the market is also limited.

Market price situation of n-butanol

Region/ Product/ August 12th

Shandong region/ N-butanol/ Around 7300-7400 yuan/ton

North China region/ N-butanol/ Around 7300-7450 yuan/ton

South China region/ N-butanol/ Around 7700-7800 yuan/ton

East China region/ N-butanol/ Around 7300-7500 yuan/ton

Market analysis in the future

At present, the overall trading atmosphere in the n-butanol market is relatively light, and the transmission and transformation of n-butanol supply and demand are average. The n-butanol data analyst from Shengyi Society believes that in the short term, the n-butanol market in Shandong Province, China, will mainly adjust and operate in a narrow range, and the specific trend needs to pay more attention to changes in supply and demand news.

According to the Commodity Market Analysis System of Shengyi Society, from August 2nd to August 9th, the domestic butadiene market price decreased from 12662.57 yuan/ton to 12425 yuan/ton, with a price reduction of 1.88% during the period. This week, the butadiene market continued to operate weakly, and downstream market demand remained lukewarm, providing limited support for market sentiment. The overall performance of the market was weak, dragging down market quotes. On the supply side, this week’s quoted goods increased compared to the previous period, and the market supply was relatively loose. Under the weak supply-demand pattern, the butadiene market trend is relatively weak. As of August 8th, the self pickup price of butadiene in East China was around 12150 yuan/ton, a decrease of about 200 yuan/ton compared to the same period last week. The ex factory price of Sinopec is 12500 yuan/ton, reduced by 300 yuan/ton.

On the cost side: During this cycle, the crude oil market has declined. On the one hand, the OPEC+production reduction of 2.2 million barrels per day will be implemented until the end of September, but from October onwards, depending on market conditions, production may gradually increase, which is bearish for the crude oil market. On the other hand, the poor non farm payroll data and rising unemployment rate released by the United States in July, coupled with poor global economic data, have intensified market concerns about the demand outlook and increased negative pressure on the psychological level, leading to a decline in the crude oil market trend. Overall, the crude oil market has significantly declined during the cycle, with a negative rate of change in crude oil. As of August 8th, international crude oil futures have risen. The settlement price of the main contract for WTI crude oil futures in the United States was $76.19 per barrel, an increase of $0.96 or 1.3%. The settlement price of the main Brent crude oil futures contract was $79.16 per barrel, an increase of $0.83 or 1.1%

Supply side: The listed price of butadiene for various sales companies of Sinopec has been lowered to 12500 yuan/ton. The Northern Huajin 120000 tons/year butadiene plant is scheduled to shut down for maintenance on July 12th and is scheduled to restart at the end of August; The second unit of Fujian United and Zhejiang Petrochemical has been restarted in June. Recently, there has been little change in the domestic comprehensive operating rate, and the supply of butadiene is relatively stable. But with the gradual increase in load after some devices resume production, the market expects that the future supply may be relatively loose, and negative factors on the supply side will emerge.

Demand side: The downstream synthetic rubber market continued to weaken this week, affected by low corporate profits. The downstream terminal market maintained a strong demand for raw material butadiene and had a strong resistance to high priced sources. The prices of styrene butadiene and butadiene rubber slightly declined during the week. The price of raw material butadiene continues to decline, and the cost support for styrene butadiene rubber weakens. Downstream tire production has recently declined, weakening the support for rigid demand for styrene butadiene rubber; The production of styrene butadiene rubber is at a low level, and the inventory pressure of enterprises is not significant. The demand performance is weak, and the demand support for the butadiene market is insufficient.

On Thursday (August 8th), the closing price of butadiene in foreign markets was partially raised: among them, the FOB price in South Korea was reported at 1515-1525 US dollars/ton, unchanged; China CFR reported 1515-1525 US dollars/ton, unchanged; European butadiene FOB Rotterdam closed at $1175-1185/ton, unchanged; FD Northwest Europe closed at 1095-1105 euros/ton, up 5 euros/ton.

Market forecast: In the near future, there will be a significant resumption of production in the butadiene plant, and with the subsequent increase in load on the supply side, the market expects a relatively loose supply in the future. From the perspective of demand, downstream demand has always maintained strong support and price trends are weak. Downstream synthetic rubber companies have been affected by declining profits, and their purchasing enthusiasm has been significantly weakened recently. As a result, the market atmosphere is more cautious. Overall, the recent performance of the butadiene market has been weak in both supply and demand, and it is expected to maintain a stable, moderate, and weak trend in the short term. There may still be room for further decline, and the focus will be on downstream market reception in the future.