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.

According to the Commodity Market Analysis System of Shengyi Society, there was a significant decline in domestic PTA prices this week (October 14-18). The average spot price of PTA in East China was 4912 yuan/ton, a decrease of 5.69% from the beginning of the week. The weakening of cost support and the increase in PTA supply and demand are the main reasons for the price decline.

Looking at the future market, Hengli Huizhou’s 2.5 million ton PTA plant is planned to restart next week, while Zhongtai Petrochemical’s 1.2 million ton plant will shut down on October 6th and is scheduled to restart in early November. At present, the industry’s operating rate is around 85%, and it will continue to operate at a high level in the short term, with ample supply of goods.

In the crude oil market, as of the 17th, the settlement price of the main contract for WTI crude oil futures in the United States was $70.67 per barrel, and the settlement price of the main contract for Brent crude oil futures was $74.45 per barrel. The recent trend of crude oil prices has fallen, and the geopolitical situation in the Middle East is controllable. In addition, the future demand for crude oil market is worrying, which has led to a continuous decline in the oil market; However, the recent decline in US crude oil inventories still provides support for the crude oil market, and overall, crude oil market prices are expected to slightly decrease.

The downstream polyester production rate is around 88%, and the peak consumption season is coming to an end, with limited room for further improvement. With the decline in raw material costs, the terminal market is affected by the mentality of “buying up instead of buying down”, and the purchasing willingness is generally low, resulting in relatively insufficient confidence in the subsequent market. Market atmosphere deviation, maintaining a focus on purchasing in small quantities according to demand. The intensification of supply-demand contradictions further puts pressure on the polyester market.

Business analysts believe that under the dual pressure of cost and supply and demand, the PTA market lacks positive news in the short term, and it is expected that prices may continue to show a weak trend.

According to the Commodity Market Analysis System of Shengyi Society, as of October 17th, the PET factory’s quotation has been lowered, and its average market price has been adjusted to 6350 yuan per ton.

Overnight crude oil prices plummeted, and PET currently lacks cost support, causing a shift in focus. Recently, PTA plant maintenance has been limited, but the overall market supply is sufficient. There is currently no significant release of new orders downstream of the terminal, maintaining normal production and consuming more raw materials for stocking up in the early stage, resulting in weak procurement follow-up. Short term fundamentals are weak and difficult to change, and PTA prices will continue to decline. Due to the drag of raw materials, the quotation of polyester bottle chip factories has been lowered, and the market focus is weak and stable.

Overall, the PET market may experience weak fluctuations in the short term. The actual trend still depends on the trend of the raw material side and the subsequent actual supply and demand situation.

According to the Commodity Market Analysis System of Shengyi Society, the mixed xylene market first rose and then fell in the first half of October. On October 16th, the benchmark price of mixed xylene was 5950 yuan/ton, a decrease of 0.17% from 5960 yuan/ton on October 1st. After the holiday, the mixed xylene market saw an overall rebound, with external and crude oil markets rising during the holiday period, driving the domestic market to make up for the holiday. The mixed xylene market saw a rebound of about 5%. However, the enthusiasm for downstream entry into the market is generally low, lacking downstream support, and the mixed xylene market lacks the driving force to continue rising. Subsequently, with the decline of the external market and the general correction of the domestic market, the market maintains rigid demand trading, and prices continue to decline. Currently, the overall operation is weak.

On the cost side: The international oil price market has risen, and during China’s National Day holiday, international oil prices have significantly increased. On the one hand, the tense geopolitical situation in the Middle East has had an impact, which is good news for international oil prices. On the other hand, the supply of crude oil remains tight. The OPEC+2.2 million barrels per day production reduction before the end of November will still be effective, and some oil producing countries have stated that they will carry out compensatory production cuts. The supply shortage still exists, and the international crude oil price trend is rising. However, concerns about the global economy and demand outlook still exist in the market, coupled with the end of the US oil peak and the increase in US crude oil inventories suppressing the rise in crude oil prices. Overall, the trend of crude oil prices has risen during the cycle. As of October 14th, the settlement price of the main contract for WTI crude oil futures in the United States was $73.83 per barrel. The settlement price of the main Brent crude oil futures contract is $77.46 per barrel.

Supply side: During this cycle, Sinopec’s xylene quotations mostly rose first and then fell. Currently, the company is operating normally, with stable plant production and sales. The company’s quotations remain unchanged from the previous day. As of October 16th, East China Company quoted 5850 yuan/ton, North China Company quoted 5850-5900 yuan/ton, South China Company quoted 5900-6000 yuan/ton, and Central China Company quoted 5700 yuan/ton.

Demand side: The trend of xylene is still weak, and the support on the demand side is weak

On September 23rd, Sinopec Sales Company implemented a price of 7800 yuan/ton for xylene, which remained unchanged from the price on September 16th. The PX price continued to decline both inside and outside the cycle, with CFR China closing at $840-842/ton as of September 20th, a cumulative decrease of $6/ton from $834-836/ton on September 17th.

Market forecast: The crude oil market is expected to operate weakly in the near future, with weak cost support. In terms of supply, the recent accumulation of port inventory in East China has had a bearish impact on the market. On the demand side, the trend of refined oil products is weak, and the purchasing intention is biased towards rigid demand. Overall, the recent bearish impact on the spot market is significant, and it is expected that the xylene market will continue to operate weakly in the short term.