The market price of epichlorohydrin continued to rise in October. Multiple production enterprises are undergoing equipment maintenance, resulting in tight market supply. Xinyue, Binhua and other facilities operate with reduced load. A leading enterprise has ceased production, and multiple companies have been affected by the suspension of trading and reporting. The decrease in supply has caused traders to push up market prices. According to the market analysis system of Shengyi Society, as of October 28th, the benchmark price of Shengyi Society’s epichlorohydrin is 8725 yuan/ton, an increase of 9.75% compared to the beginning of this month (7950 yuan/ton).

Price influencing factors:

Raw material side: Recently, the price of propylene in the market has fluctuated and risen. According to the market analysis system of Shengyi Society, as of October 28th, the benchmark price of propylene in Shengyi Society was 6865.75 yuan/ton, an increase of 5.41% compared to the beginning of this month (6513.25 yuan/ton).

Downstream demand side: The downstream epoxy resin market is running weakly, and the purchasing mentality is not positive, with rigid demand procurement being the main focus.

In terms of equipment, the 130000 tons/year propylene based epichlorohydrin plant of the leading enterprise in epichlorohydrin production has been shut down for maintenance.

Market forecast: Business Society’s epoxy chloropropane analyst believes that there is still cost pressure on epoxy chloropropane, insufficient follow-up of downstream new orders, cautious procurement of raw materials, and the main demand for transactions. It is expected that the epoxy chloropropane market will remain stable in the short term, and more attention should be paid to changes in raw material prices.

According to the Commodity Market Analysis System of Shengyi Society, the price of acetic acid has continued to decline this week. On October 25th, the average price of acetic acid was 2950 yuan/ton, and on October 19th, it was 3050 yuan/ton. The price decreased by 100 yuan/ton during the week, a decrease of 3.28%.

This week, the acetic acid market has been weakly declining, and enterprise quotations have continued to fall. On the supply side, the acetic acid plant on site is operating normally, the market supply is sufficient, the enterprise inventory pressure is high, and the shipping sentiment is strong; On the downstream side, the entry into the market for goods is average, with a focus on small quantities as needed. The market trading is weak, and the atmosphere in the market is bearish, resulting in a continuous decline in acetic acid prices.

As of October 25th, the market prices of acetic acid in various regions are as follows:

Region/ On October 18th/ On October 25th/ Rise and fall

South China region/ 2875 yuan/ton/ 2875 yuan/ton/ 0

North China region/ 2875 yuan/ton/ 2875 yuan/ton/ 0

Shandong region/ 2950 yuan/ton/ 2850 yuan/ton/ -100

Jiangsu region/ 2750 yuan/ton/ 2725 yuan/ton/ -25

Zhejiang region/ 2850 yuan/ton/ 2825 yuan/ton/ -25

The upstream methanol market first fell and then rose. From October 19th to 25th, the average price in the domestic market increased from 2439.17 yuan/ton to 2445.83 yuan/ton, with an overall increase of 0.27%. At the beginning of the week, methanol continued to decline in the previous week’s market trend. After the price fell to a low level, downstream inquiries and purchases increased, boosting the methanol market. In addition, with the recent increase in shipping costs, methanol prices rebounded and rose accordingly.

The downstream acetic anhydride market is weak and declining. On October 25th, the average ex factory price of acetic anhydride was 5122.50 yuan/ton, a decrease of 2.06% compared to the price of 5230.00 yuan/ton on October 19th. The upstream acetic acid market is weak and declining, the cost support for acetic anhydride is weak, the enthusiasm for downstream entry into the market for acetic anhydride is not high, the actual market orders are limited, and the mentality of industry players is bearish, resulting in a decline in acetic anhydride prices.

Market forecast: Business Society’s acetic acid analyst believes that the acetic acid plant is operating normally, the market supply is stable, and there is inventory pressure on enterprises; Downstream and traders are following up as needed, and the market trading atmosphere is relatively weak, with strong supply and weak demand on the market. It is expected that the short-term acetic acid market will continue to consolidate weakly, and attention will be paid to downstream follow-up in the future.

Aluminum prices remained strong in October, showing a strong performance. According to the Commodity Market Analysis System of Shengyi Society, as of October 24, 2024, the average price of aluminum ingots in the East China market in China was 21090 yuan/ton, an increase of 5.56% from the market average price of 19980 yuan/ton on September 26.

At present, the rise in aluminum prices is mainly due to the upward shift of the cost center, which drives the rise of the industrial chain market. Merely considering the supply and demand side is not enough to support the current price. In the short term, aluminum prices are supported by cost factors and have a strong trend, but the upward space has narrowed and the risk of decline has increased. The future market is mainly cautious and optimistic. The reasons are as follows.

Short term risk points: The favorable fundamentals of alumina have already been reflected in prices, and even the price of alumina has exceeded expectations with an excessive rise. Currently, the profit window for alumina exports is gradually closing, and due to high prices, there will be more production capacity in the future, and long-term excess pressure will gradually emerge; The risk of alumina price pullback has increased, and the cost support risk of aluminum ingot prices has intensified.

Medium – and long-term risk points: Import and export may be affected by foreign policy factors, and some of the US 301 tariff policies will take effect on September 27th. This includes a 100% tariff on Chinese electric vehicles, a 50% tariff on Chinese solar cells, and a 25% tariff on Chinese steel, aluminum, electric vehicle batteries, and key minerals. The terminal demand is not optimistic.

The excessive rise in alumina prices has intensified the risk of cost support

The recent trading logic of alumina prices: In September, Guinea’s bauxite imports experienced a significant month on month decline due to the impact of the rainy season on shipments; Domestic mines (environmental interference affecting bauxite production capacity in Zhengzhou area) have tight supply at the mining end, and spot alumina is also tight in the short term.

However, dynamically speaking, there has been a significant improvement in the supply from the mining end. Based on recent weekly shipping data from Guinea, there has been a significant increase in bauxite transportation volume, and it is expected that the arrival volume in October and November will significantly increase. At present, domestic alumina enterprises mainly using imported minerals still have high operating rates, and the tight supply at the mining end has not brought the expected risk of production reduction.

There is also an expected increase in domestic spot supply of alumina. A large alumina plant in Shandong has put into operation a 1 million ton production line this month, with an expected product release date of the end of October or early November. The production situation of new production capacity on the spot side of alumina may be mainly affected by the relocation of 2 million tons of production capacity by Weiqiao Group in the fourth quarter. It is expected that the first batch will be discharged in early November, and the second batch is highly likely to be discharged at the end of November or early December. There is also a production capacity of 2 million tons for Guangxi Huasheng Phase II, with the first batch expected to be put into operation by the end of December and the second batch expected to be put into operation by the end of January 2025.

1、 Price trend

According to the Commodity Market Analysis System of Shengyi Society, the price of bromine has slightly increased. On October 22nd, the average market price of bromine was around 20800 yuan/ton, an increase of 4.73% compared to the beginning of the month. On October 21, the bromine commodity index was 72.28, up 1.89 points from yesterday, down 70.52% from the highest point of 245.18 points during the cycle (2021-10-27), and up 22.67% from the lowest point of 58.92 points on October 29, 2014. (Note: The cycle refers to the period from September 1, 2011 to present)

2、 Market analysis

Recently, the price of bromine has been operating strongly, with prices in Shandong region remaining firm. The mainstream market price is around 20000-21000 yuan/ton. This week, it is not affected by weather factors, and rainfall has significantly decreased. Bromine enterprises are operating normally with low inventory levels. The enthusiasm for inquiries and purchases of downstream flame retardants for bromine is relatively high, and the current downstream demand has limited cost support for bromine, which has boosted the overall market. In terms of raw materials, domestic sulfur prices are operating steadily, with an average market price of 1461 yuan/ton on October 22nd. Downstream purchases are mainly based on demand.

Prediction: Bromine prices are expected to remain strong in the near future, while upstream sulfur prices are expected to remain strong. Downstream flame retardants have a high level of enthusiasm for inquiries and purchases, which has boosted the overall market trend. Downstream inquiries are also more active in the supply-demand game. Overall, it is expected that bromine prices will continue to remain strong in the later stage, depending on downstream market demand.

Aluminum prices remain firm in October

Aluminum prices remained strong in October, showing a strong performance. According to the Commodity Market Analysis System of Shengyi Society, as of October 21, 2024, the average price of aluminum ingots in the East China market in China was 20803.33 yuan/ton, an increase of 4.12% from the market average price of 19980 yuan/ton on September 26.

Strong alumina prices and strong cost support

The supply of raw alumina is tight and the price is high. The limited domestic mining has led to a slow progress in the resumption of alumina production (due to environmental interference with bauxite production capacity in Zhengzhou area), coupled with export problems faced by Guinea bauxite overseas, resulting in tight supply at the mining end, making it difficult for the alumina production rate to continue to rise. The price of alumina has risen rapidly and is relatively high, providing strong cost support for aluminum prices.

Macro positive release policies boost aluminum prices

Domestic macroeconomic benefits are gradually being released, and policies are boosting the non-ferrous sector. The central bank has proposed further interest rate cuts and reserve requirement ratio cuts to release liquidity, while also creating a shift towards refinancing to guide listed companies to repurchase and increase their holdings of stocks. At the real estate level, it is proposed to lower the interest rates of existing housing loans and unify the minimum down payment ratio for housing loans. Vice Minister of Finance Liao Min: We will actively study and introduce measures that are conducive to the stable development of the real estate industry. Make good use of special bonds to acquire existing commercial housing and use it as affordable housing in various regions. We are urgently studying and clarifying the value-added tax policy that links the standards for ordinary and non ordinary residential properties.

On October 21, the People’s Bank of China authorized the National Interbank Funding Center to announce that the loan market quotation rate (LPR) on October 21, 2024 was 3.10% (3.35% before) for 1-year term and 3.60% (3.85% before) for 5-year term and above, both of which were 0.25 percentage points lower than before.

With the gradual implementation of favorable domestic policies and the directional guidance of policies, market confidence has returned.

The destocking status supports aluminum prices

The social inventory of aluminum ingots is in a continuous state of destocking. As of October 21, the mainstream domestic market’s social inventory of aluminum ingots was 627000 tons, down 19000 tons from 646000 tons on September 30; Compared to 673000 tons on October 8th, 46000 tons have been destocked.

On the supply side, Yunnan electrolytic aluminum enterprises have high daily production, and the upward space has narrowed. However, recently, Southern Power Grid announced that Yunnan electrolytic aluminum may lift power restrictions this winter and next spring, and downstream electrolytic aluminum in Yunnan is expected to not reduce production in the fourth quarter; Multiple downstream sectors on the demand side have experienced a rebound in operating rates, with electrolytic aluminum and aluminum rod inventories both experiencing slight destocking.

Future expectations

The upward shift of the cost center has driven up the reasonable price of aluminum. In the short term, aluminum prices are supported by cost factors, with a strong trend that is easy to rise but difficult to fall, but the upward space has narrowed.

Medium – and long-term risk points: Import and export may be affected by foreign policy factors, and some of the US 301 tariff policies will take effect on September 27th. This includes a 100% tariff on Chinese electric vehicles, a 50% tariff on Chinese solar cells, and a 25% tariff on Chinese steel, aluminum, electric vehicle batteries, and key minerals.