1、 Trend analysis

According to monitoring data from Business Society, copper prices rose strongly on April 8th, rising by over 2000 yuan per day to 75478.33 yuan/ton, an increase of 8.99% from the beginning of the year and a new high in nearly two years.

Duo Zhong Li Hao:

During holidays, there is a slight increase in external market sentiment

During the Qingming Festival holiday, in addition to the sharp rise in gold and silver prices, international non-ferrous metals also surged, with London copper rising 2.99%, reaching a new high in nearly a year.

Federal Reserve’s expectation of interest rate cuts

The expectation of the Federal Reserve’s interest rate cut has driven commodity prices soaring. The Federal Reserve’s March interest rate meeting, while keeping the federal funds rate unchanged, once again clarified that interest rates are currently at the peak of this cycle and are expected to cut rates this year. The Federal Reserve has hinted at three rate cuts this year. Under the continuous stimulation of interest rate cuts, prices of commodities such as crude oil, gold, and non-ferrous metals have also continued to strengthen.

Macro data is good

In March, China’s manufacturing PMI rebounded beyond expectations, with the Purchasing Managers Index (PMI) of 50.8%, an increase of 1.7 percentage points from the previous month, above the critical point, indicating a rebound in the manufacturing industry’s prosperity; In non manufacturing business activities, the PMI of the construction industry was 56.2%, an increase of 2.7 percentage points from the previous month; The PMI of the service industry was 52.4%, an increase of 1.4 percentage points from the previous month. Verifying that the economy is stable and improving, the demand side is expected to rise, and with the performance disclosure period in April, some cyclical products in the bottom or upward range of the business cycle are receiving market attention, driving the overall upward trend of the non-ferrous sector.

In March 2024, the global manufacturing PMI was 50.3%, an increase of 1.2 percentage points from the previous month, ending the 17 consecutive months of operating below 50% and returning to the expansion range of over 50%. The recovery of the manufacturing industry is expected to boost demand for industrial metals such as copper, aluminum, lead, zinc, and nickel.

AI data centers will become a new growth point for copper demand

Morgan Stanley stated in its latest report that with the rapid development of AI technology, copper demand will significantly increase, with data centers becoming a new growth point for copper demand. Da Mo wrote in the report that from 2024 to 2027, global data center demand for electricity will grow at a compound annual growth rate of 18%. The demand for copper in data centers may increase from 200000 to 500000 tons per year in 2023 to 500000 to 1.2 million tons in 2027, with a compound annual growth rate of 26%.

By 2027, data center demand for copper may account for 3.3% of global copper demand (compared to only 5.2% for electric vehicles), which will drive up copper prices and have a profound impact on the global copper market.

Fundamentals:

Supply side: With domestic smelting enterprises starting maintenance in April, capacity release is restricted, and copper processing fees have not stopped falling. There may be additional production cuts in the future, which further raises market concerns about supply shortages.

On the demand side, terminal consumption continues to rebound, and the overall recovery expectation for the peak season of the “Silver Fourth” is gradually increasing. Among them, the cumulative investment growth rate of the power grid is at a neutral position in the same period of history, with a significant increase in both domestic and export production of air conditioners, which is expected to drive the rapid repair of demand for copper rods and pipes. At the same time, the restructuring of overseas supply chains has brought about a huge incremental market, and demand will continue to improve.

LME copper inventory slightly decreased

According to the above chart, LME copper inventories have slightly declined recently. As of the 8th, LME copper inventory was 115525 tons, a decrease of 34.79% from 165700 tons at the beginning of the year.

Comparison chart of annual copper prices

According to the annual price comparison chart of copper, the trend of copper prices in April has mostly improved in the past five years.

Future Market Forecast:

Goldman Sachs believes that the copper market is at an important seasonal turning point, and the refined copper market will gradually lower inventory levels in the second quarter. In the context of strong demand and continuous supply constraints in China, the copper market will gradually shift towards a supply shortage pattern. The sustained supply shortage will support copper prices, and it is expected that copper will rise to $10000 per ton by the end of 2024!

On the whole, although the US non farm data in March showed a bright rise, driving the US dollar and US bond yields to rise and inhibiting copper prices, the domestic manufacturing PMI data in March was good, the copper supply side was reduced, and the demand was strong. In particular, the AI data center will become a new growth point of copper demand, just like injecting a “shot in the arm” into the copper market, climbing the historical peak like a flying eagle. Later, with the landing of special bonds, additional treasury bond, ultra long term special treasury bond, PSL and other broad financial instruments, domestic demand is expected to continue to improve. Goldman Sachs expects copper to rise to $10000 per ton by the end of 2024, which means there is still 7% room for copper prices to rise. It is expected that copper prices will remain strong in the short term.

1、 Price trend

According to the Commodity Market Analysis System of Business Society, the average price of domestic ammonium sulfate market on April 1st was 756 yuan/ton, and on April 7th, the average price of domestic ammonium sulfate market was 773 yuan/ton. This week, the price of domestic ammonium sulfate market increased by 2.20%.

2、 Market analysis

This week, the domestic ammonium sulfate market price has stopped falling and risen. Due to the continuous decline in ammonium sulfate prices in the early stage, the market’s bottoming out mentality has increased, and the trading atmosphere has improved, resulting in an increase in the bidding price of ammonium sulfate. However, terminal demand remains weak, and downstream purchases are made on demand. This week, urea prices continue to weaken, with bearish factors still present. As of April 7th, the mainstream ex factory quotation for coking grade ammonium sulfate in Shandong region is around 730 yuan/ton. The mainstream ex factory quotation for ammonium sulfate in Shandong region is around 770-790 yuan/ton.

3、 Future Market Forecast

According to analysts from Business Society, the price of ammonium sulfate has rebounded and risen recently. The demand side is still sluggish, coupled with the poor urea market, the rebound space of the ammonium sulfate market is limited. It is expected that in the short term, the domestic ammonium sulfate price will mainly consolidate and operate within a narrow range.

This week (3.29-4.3), according to the Commodity Analysis System of Business Society, the average price quoted by domestic industrial grade 98% calcium formate enterprises is 3807.00 yuan/ton, which is 75 yuan/ton higher than the reference price of 3732.00 yuan/ton on March 30th, with a 2.01% increase.

Trend of raw material formic acid:

There are two main reasons for the rise in the calcium formate market. On the one hand, the raw material formic acid was bullish in the early stage. According to the commodity market analysis system of Business Society, as of March 27th, the average price quoted by formic acid enterprises was 3300.00 yuan/ton, which is 4.76% higher than the price on March 1st (formic acid reference price is 3150.00 yuan/ton). This puts significant cost pressure on calcium formate producers; On the other hand, the overall stock on the supply side is insufficient and supply is tight, and some manufacturers are still in the stage of arranging orders and shipping. However, overall, the demand side is mostly for rigid procurement, which is at a conventional level and has limited room for growth.

Future Market Forecast:

In the short term, the domestic price of calcium formate may show a consolidation trend and maintain stable operation.

Recently, the price of hexafluoropropylene in the market has remained stable, and downstream procurement attitudes are not positive, so there is currently no good news. According to the data monitoring system of Shengyishe, as of April 2nd, the benchmark price of hexafluoropropylene in Shengyishe was 36375.00 yuan/ton, unchanged from the beginning of this month.

Raw material side: Recently, the domestic price trend of anhydrous hydrofluoric acid has increased significantly. As of the 2nd day, the market price of hydrofluoric acid was 11166.67 yuan/ton, an increase of 12.04% from the price of 9966.67 yuan/ton on March 21, and a year-on-year increase of 13.95%. In the past half month, the price trend of domestic fluorite has increased. As of the 2nd, the average price of domestic fluorite was 3525 yuan/ton, with a price increase of 5.03%.

The downstream demand is not active, with on-demand procurement being the main focus, and the atmosphere of inquiry and signing is cold.

Business Society’s hexafluoropropylene analyst predicts that due to the recent high cost support of hexafluoropropylene, downstream demand is not active, and on-demand procurement is affected, it is expected that the hexafluoropropylene market will remain strong in the near future. More attention should be paid to market news guidelines.

Price: 3073 yuan/ton

Analysis: On April 1st, the liquid ammonia market in Shandong region experienced a significant decline. According to the Commodity Market Analysis System of Business Society, the daily decline in the main production area of Shandong was 7.52%. The main reason is the resumption of work on some of the equipment that underwent troubleshooting in the early stage, resulting in a loose supply performance. Coupled with changes in downstream urea units, ammonia conversion is more common, leading to a short-term surge in ammonia production. Last weekend, along with today, a large factory in Shandong lowered prices by nearly 300 yuan/ton. On Monday, dealers mostly reported lower prices, resulting in sluggish sales. Moreover, downstream procurement enthusiasm is not high, urea remains weak, prices continue to decline, agricultural demand gap has not passed, industrial demand remains rigid, and the sluggish demand side has suppressed the price of liquid ammonia. At present, the mainstream quotation in Shandong region is between 2900-3100 yuan/ton.

Prediction: Downstream procurement will slow down before the Qingming Festival, with sufficient supply and no improvement in downstream demand. It is expected that liquid ammonia will remain weak in the near future, and it is not ruled out that prices may continue to decline.