Review of polyacrylamide market trends in 2023

According to the Commodity Market Analysis System of Business Society, the average market price of polyacrylamide (CPAM, cationic, molecular weight 12 million, 10-30 ionic degree) in China in 2023 was 15442.86 yuan/ton at the beginning of the year and 13220.00 yuan/ton at the end of the year, with an annual decline of 14.39%. The highest point of the year occurred on January 11th at 15642.86 yuan/ton, and the lowest point of the year occurred on December 8th at 1322.00 yuan/ton, with a maximum amplitude of 15.49%. The polyacrylamide market will experience a high decline in 2023.

According to the K-bar chart data of the polyacrylamide market in Business Society in 2023, the polyaluminum chloride market experienced more declines and less gains, with one month of upward movement and eleven months of downward movement. The highest increase was in January, up 0.65%, and the highest decrease was in April, down 3.37%.

In 2023, the polyacrylamide market continued to decline, and due to the overall impact of the economic situation, downstream demand remained weak and the industry’s prosperity was not high; Domestic manufacturers in the main production areas have normal production and abundant stock; The overall market for polyacrylamide raw materials has fallen, with limited supply and demand support, and manufacturers continue to lower prices.

Prediction of polyacrylamide market in 2024

Cost side:

Raw material acrylonitrile: According to the commodity market analysis system of Business Society, the acrylonitrile market will fluctuate widely in 2023. At the beginning of the year, the price was 9600 yuan/ton, and at the end of the year, the price was 9812 yuan/ton, an increase of 2.21% compared to the beginning of the year; The high point of the year was 10800 yuan/ton, and the low point was 7800 yuan/ton, with an amplitude of 38.46%.

As of the end of 2023, the total production capacity of acrylonitrile in China reached 4.399 million tons/year, and the annual utilization rate of acrylonitrile industry capacity was 73.11%. According to statistics, there are still three sets of new production capacity plans totaling 920000 tons/year planned to be put into operation in China in 2024, with most of the production time in the second half of 2024. The increase in supply will put pressure on the acrylonitrile market in 2024.

Raw Material Acrylic Acid: According to the Commodity Market Analysis System of Business Society, the average quoted price of acrylic acid in the East China region was 6800 yuan/ton on January 1, 2023, and the average price of acrylic acid on December 31 was 6187.50 yuan/ton, a decrease of 9.01% in the year’s market. The lowest price point of the year was 5825.00 yuan/ton on November 3rd, and the highest price point of the year was 8200.00 yuan/ton on February 13th, with a maximum amplitude of 40.77%. In 2023, with the completion of the construction of the 180000 ton acrylic acid plant for Zhejiang Satellite, China’s acrylic acid production capacity expanded to 4.08 million tons, with a slight increase in production compared to 2022. Wanhua Chemical and Shandong Sanyue have plans to put new acrylic acid plants into operation in 2024, and the overall acrylic acid production capacity is expected to increase in 2024.

Supply side: China is the world’s largest producer of polyacrylamide, and in recent years, the scale of China’s polyacrylamide industry has continued to grow. In 2022, the production of polyacrylamide in China was 1.3623 million tons, with a demand of 1.1653 million tons. Polyacrylamide in China is mainly a mid to low-end product, while high-end products still need to be imported.

Demand side: From the application scenarios of polyacrylamide, the petroleum extraction industry is the main downstream of polyacrylamide. About 42% of the total production of polyacrylamide in China is used for petroleum extraction, 31% for water treatment, 13% for the papermaking industry, and other industries such as coal washing and metallurgy account for 14%. As of 2023, the number of urban sewage treatment plants in China has exceeded 2000, with a daily processing capacity of 170 million cubic meters. At the same time, more and more rural areas are starting to build sewage treatment facilities, further promoting the development of the industry.

Market forecast: Currently, there is not much difference between supply and demand in China’s polyacrylamide market. In 2024, the polyacrylamide market in China will still be greatly affected by upstream and downstream market trends, and it is expected that the polyacrylamide market will mainly fluctuate within a narrow range.

According to the monitoring of the commodity market analysis system of Shengyishe, the domestic price of LLDPE (7042) was 8257 yuan/ton on January 31, and the average price on February 7 was 8188 yuan/ton, with a price drop of 0.83% during the period.

According to the monitoring of the commodity market analysis system of Shengyishe, the domestic price of LDPE (2426H) was 9192 yuan/ton on January 31, and the average price on February 7 was 9245 yuan/ton, with a price increase of 0.57% during the period.

According to the monitoring of the commodity market analysis system of Business Society, the domestic price of HDPE (5000S) was 8437 yuan/ton on January 31, and the average price on February 6 was 8412 yuan/ton, with a 0.3% decrease in quotation during this period.

This week, the LLDPE market experienced a narrow and weak decline, with LDPE prices remaining stable after a slight increase, and HDPE prices remaining stable after a slight decline. The cost side provides certain support for polyethylene. Domestic polyethylene enterprises have relatively few maintenance equipment, and the supply is still sufficient; As the Spring Festival holiday approaches, downstream factories are gradually taking a break, and the operating rate has decreased compared to the previous period. Market demand has weakened, transactions are limited, and the demand side lacks support for polyethylene. There are signs of inventory accumulation in enterprises before the holiday, and there is a weakening trend in on-site quotations. Traders mainly focus on volume and profit.

On February 7th, the opening price of the polyethylene l2405 contract on the Dalian Commodity Exchange was 8145 yuan, and the closing price was 8220 yuan, up 122 yuan, with a maximum of 8231 yuan and a minimum of 8124 yuan, up 1.51%. This week, the trend of polyethylene futures was weak, bearish on the spot market.

After the Spring Festival, due to the accumulation of inventory in enterprises during the holiday period, demand remains weak, resulting in weak supply and demand for polyethylene; The frequent introduction of favorable policy news in the domestic market has boosted market confidence and provided certain support to the polyethylene market. It is expected that polyethylene will mainly adjust its operation in a narrow range after the holiday.

According to the monitoring of the commodity market analysis system of Business Society, industrial grade lithium carbonate and battery grade lithium carbonate remained stable this week. On February 6, 2024, the average domestic mixed price of industrial grade lithium carbonate was 91400 yuan/ton, which remained stable compared to the average price of 91400 yuan/ton on February 1. On February 6th, the average domestic mixed price of battery grade lithium carbonate was 100800 yuan/ton, which remained stable compared to the average price of 100800 yuan/ton on February 1st.

By observing market changes, it can be seen that this week is the last week before the Spring Festival holiday, and the price of lithium carbonate remains stable. In terms of supply, the current market continues to adopt a price boosting shipping strategy. A small number of lithium salt enterprises that purchase lithium mines have gradually reduced production and stopped production in the near future after experiencing long-term losses. Some large lithium salt factories will undergo routine seasonal maintenance during the Spring Festival period, and there is no inventory pressure in the short term. Therefore, the price of lithium carbonate remains stable.

In terms of demand, the willingness of downstream positive electrode enterprises to accept high prices of lithium carbonate is still low, and as the holiday season approaches, the market purchasing demand will gradually weaken. Downstream manufacturers have basically completed pre holiday stocking, and most small and medium-sized enterprises have stopped production since this week. In addition, logistics have been affected by weather and the Spring Festival, resulting in a trend of light trading volume. The entire market is showing a stable trend.

The lithium hydroxide market is mainly stable, and recently the industrial grade lithium carbonate market has been stable. Upstream spodumene concentrate prices are stable, with limited cost support. Some factories are operating at a low level, and downstream high nickel positive electrode pre holiday reserves are still following up. Market transactions are still mainly long-term contract orders.

The price of downstream lithium iron phosphate is stable, and the price of the main raw material lithium carbonate is temporarily stable. The price of iron phosphate is stable and weak, and the production cost of iron lithium materials is relatively stable. Lithium iron phosphate enterprises develop production plans based on received and expected orders, and some enterprises prepare sufficient inventory before holidays.

In terms of futures, on February 6, 2024, the opening price of the LC2407 main contract was 100450 yuan/ton, the highest price was 100650 yuan/ton, and the closing price was 97150 yuan/ton, with a daily decline of 3.38%. The transaction volume was 110900 lots and the position was 142239 lots.

According to analysts from Shengyishe Lithium Carbonate, the current market has entered the countdown to the Spring Festival holiday, and market quotations have remained stable. Whether prices can recover depends on post holiday market demand, and it is expected that the short-term spot price of lithium carbonate will remain stable.

According to the monitoring of the commodity market analysis system of Shengyishe, 1 # tin ingot in East China fluctuated and fell this week (1.29-2.5), with an average market price of 221460 yuan/ton at the beginning of last week and 211360 yuan/ton at the beginning of this week, a weekly decrease of 4.56%.

K-bar chart of commodity prices, using the concept of price trend K-line, reflects the weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations. From the monthly K-bar chart, it can be seen that after November 2022, tin prices have been continuously rising for three months due to macroeconomic factors. Since February 2023, prices have fallen by 11.35% in a single month, and the trend of tin prices has fluctuated narrowly in the past three months. From the weekly K-bar chart, it can be seen that the tin ingot market has seen more ups and downs in recent times.

In terms of the futures market, the futures market continued to decline during the week, and social inventory continued to accumulate, dragging down the trend of the futures market. On Monday, the Shanghai tin futures market continued to decline in early trading, and the spot market continued to follow suit. Fundamentally speaking, refineries still maintain a price push mentality on the supply side, but unfortunately, the poor performance of market demand has led to consecutive price declines, affecting the mentality of enterprises. In terms of demand, as the holiday approaches, the downstream has basically entered the holiday mode. Recently, there have been many difficulties in transportation, and downstream procurement intentions are low, resulting in overall weak demand. Overall, the holiday atmosphere in the market is relatively strong, and the lack of demand support has led to a downward pressure on the market under the influence of high inventory.

Related data:

On February 4th, the base metal index was 1160 points, unchanged from yesterday, a decrease of 28.22% from the highest point in the cycle of 1616 points (2022-03-09), and an increase of 80.69% from the lowest point of 642 points on November 24th, 2015. (Note: The cycle refers to 2011-12-01 present).

On February 4th, the non-ferrous index was 1092 points, unchanged from yesterday, a decrease of 29.00% from the highest point in the cycle of 1538 points (2021-10-18), and an increase of 79.90% from the lowest point of 607 points on November 24th, 2015. (Note: The cycle refers to 2011-12-01 present).

According to the price monitoring of Business Society, in the 5th week of 2024 (1.29-2.2), there were a total of 4 commodities in the non-ferrous sector that showed a month on month increase in commodity prices. The top 3 commodities with the highest increase were sponge titanium (0.97%), antimony (0.83%), and gold (0.79%). There are a total of 7 products with a month on month decline, and the top 3 products with the largest decline are zinc (-3.03%), tin (-2.96%), and nickel (-1.76%). The average increase and decrease this week is -0.3%.

Zinc prices fluctuated and fell in January

According to the Commodity Market Analysis System of Shengyishe, as of January 31st, the price of zinc was 21250 yuan/ton, a decrease of 1.57% from the zinc price of 21588 yuan/ton on January 1st. As the Spring Festival approaches, both supply and demand are weak, and zinc prices fluctuated and fell in January.

Manufacturing Purchasing Managers Index rebounded in January

According to data released by the National Bureau of Statistics of China, the Purchasing Managers Index (PMI) of the manufacturing industry in January was 49.2%, an increase of 0.2 percentage points from the previous month. The domestic manufacturing industry has rebounded, and the expansion of the production index has accelerated, but overall it is still in a contraction range. The lack of macroeconomic benefits is generally bearish for the zinc market.

The processing cost of zinc concentrate has decreased

From the trend chart of zinc concentrate processing fees, it can be seen that the zinc concentrate processing fees continued to decline in January, with a slight decrease. As the Spring Festival approaches, smelters are still in the stage of reserving raw materials in the first quarter, and their procurement is relatively active. The tight mining situation provides cost support for zinc prices. The profits of smelters are in an inverted state, and some smelters have experienced maintenance and production reduction. Expected decrease in zinc supply in the market.

Zinc concentrate port inventory decline

From the statistical chart of zinc concentrate port inventory, it can be seen that in January, zinc concentrate inventory decreased, zinc concentrate supply decreased, and zinc market supply tightened, providing some positive support for zinc prices.

Domestic zinc ingot social inventory fluctuates and rises

From the domestic zinc ingot inventory statistics chart, it can be seen that zinc ingot inventory fluctuated and increased in January. As the Spring Festival approached, downstream enterprises stocked up, and zinc ingot inventory briefly declined. However, overall zinc ingot inventory increased, and downstream demand was poor, resulting in a clear negative impact on zinc prices.

Decreased demand

As the year-end approaches, downstream sectors have gradually entered a holiday period. Last week, the operating rate of galvanized sectors declined significantly, with a weekly operating rate decrease of 2.76%; Most die-casting zinc alloy companies will start reducing production lines and taking maintenance breaks in late January; Last week, the orders of various downstream sectors in the zinc oxide sector increased and decreased, and the overall operating rate remained weak. This week, as zinc oxide enterprises continued to holiday, the operating rate of enterprises continued to decline. As the Spring Festival approaches, downstream production has significantly declined, downstream consumption is weak, and zinc prices are bearish.

Future Market Forecast

According to data analysts from Business Society, the supply and demand of zinc in China were weak in January, and downstream customers stopped production for maintenance more. The supply of zinc in the market was relatively sufficient. Overall, the supply of zinc exceeded the demand, and zinc prices fluctuated and fell. In the future, the supply of zinc in the market is still sufficient, and it is difficult to improve in the short term during the off-season of the zinc market. It is expected that zinc prices will consolidate at a low level.