According to statistics, the price trend of the domestic rare earth market in 2023 has declined. From the rare earth industry price index chart, it can be seen that the rare earth index at the beginning of the year was 664, and as of December 28, it was 459, an overall decrease of 205 points. In early February, the domestic rare earth industry reached its highest price, and in early May, the rare earth price was at a low level for the year. The trend of the domestic rare earth industry price index in 2023 is as follows:

In 2023, the price trend of domestic light rare earth market has significantly declined. The price of neodymium oxide at the beginning of the year was 770000 yuan/ton, and the market price at the end of the year was 447500 yuan/ton, with a price drop of 41.88%; The price of neodymium metal at the beginning of the year was 952500 yuan/ton, and the market price at the end of the year was 567500 yuan/ton, with a year-on-year decline of 40.42%; The price of praseodymium neodymium oxide at the beginning of the year was 710000 yuan/ton, and the market price at the end of the year was 447500 yuan/ton, with a year-on-year decline of 36.75%; The price of praseodymium neodymium alloy at the beginning of the year was 865000 yuan/ton, and the market price at the end of the year was 547500 yuan/ton, with a year-on-year decline of 36.71%; The price of praseodymium oxide at the beginning of the year was 695000 yuan/ton, and the market price at the end of the year was 465000 yuan/ton, with a year-on-year decline of 33.09%; The price of praseodymium metal at the beginning of the year was 915000 yuan/ton, and the market price at the end of the year was 600000 yuan/ton, with an annual decline of 34.43%. The trends of each product are as follows:

In 2023, the market price of heavy rare earths slightly declined. According to statistics, the market price of dysprosium oxide in China was 2.5 million yuan/ton at the beginning of the year and 2.48 million yuan/ton at the end of the year, with a year-on-year decline of 0.8%; At the beginning of the year, the price of dysprosium metal was 3.21 million yuan/ton, and at the end of the year, it was 3.175 million yuan/ton, with a decrease of 1.09% throughout the year; The beginning price of dysprosium ferroalloy was 2.485 million yuan/ton, and the end of year market price was 2.47 million yuan/ton, with a year-on-year decline of 0.60%. The specific trend is as follows:

From the rare earth trend chart, it can be seen that the domestic trend of light and heavy rare earths has differentiated, with the overall decline mainly concentrated in the first quarter. The prices of light and heavy rare earths have significantly decreased, and the light rare earths market has been in a low and volatile stage in the later period. However, the trend of heavy rare earths market has increased in the second and third quarters, almost flattening the decline in the first quarter. The overall analysis is as follows:

Phase 1: The domestic rare earth market prices significantly decreased in the first quarter. At this stage, there are few inquiries from downstream magnetic material enterprises in China, and magnetic material factories mainly consume existing inventory. The actual transaction price of rare earths continues to shift downward, and the rare earth market is under pressure and declining. In addition, with the simultaneous decline in prices of rare earth metals and oxides, the inverted cost of raw materials in metal factories is still difficult to alleviate in the short term. Some metal factories have reduced their production burden, resulting in poor downstream procurement and oversupply, leading to a significant drop in market prices.

Phase 2: The trend of light and heavy rare earths is differentiated in the second, third, and fourth quarters. With the continuous resumption of work and production by domestic rare earth manufacturers, domestic on-site supply has increased, and inquiries for praseodymium neodymium products in the market are relatively quiet. Transactions are mainly in demand, while the light rare earth market is mainly volatile. In addition, the price of praseodymium neodymium metal is still inverted, mainly to ensure the supply of long-term orders. Intermediaries are cautious in replenishing small quantities, and transactions are limited. At this stage, the light rare earth market is mainly characterized by low volatility. However, the heavy rare earth market has risen significantly. Due to the impact of high temperatures and rainfall, some rare earth mining enterprises have limited production, and some rare earth manufacturers have voluntarily reduced production, which has led to a decrease in spot inventory in the market. Separation plants and metal plants in the Sichuan region will have varying degrees of production reduction and shutdown. In addition, import sources from Myanmar are hindered, and favorable factors support the price trend of heavy rare earth markets.

How to interpret the downward trend of the domestic rare earth market in 2023 and the rare earth market trend in 2024?

Firstly, the country has issued an increase in the total quota for rare earth mining, smelting and separation. In 2023, the Ministry of Industry and Information Technology and the Ministry of Natural Resources issued total control indicators for rare earth mining and smelting separation, which were 255000 tons and 243850 tons respectively, an increase of 45000 tons and 41850 tons compared to 2023 (total rare earth mining of 210000 tons and total smelting separation of 202000 tons), with an increase of approximately 21.43% and 20.72%, respectively. China has large rare earth reserves, high supply, and fast consumption. According to statistics, the total global rare earth reserves are about 130 million tons, and China’s rare earth reserves are 44 million tons, accounting for 33.8% of the global total reserves. With the rapid extraction and consumption of rare earth resources in China, the country has implemented strict control over rare earth extraction and separation. In the past two years, mining indicators have been raised, and the mining indicators in 2024 may be higher than those in 2023, which will have a certain inhibitory effect on the rare earth market. The total amount of mining and smelting separation over the years is as follows:

Secondly, the export volume of rare earths has increased, and export prices have declined. The total export volume of rare earths from January to November 2023 was 48868 tons, a year-on-year increase of 10%, but the export unit price was 10.7 US dollars/kg, a year-on-year decrease of 23.2%. The export volume of Chinese rare earths has increased, and the demand for foreign rare earths has increased. However, the export prices have significantly decreased, weakening the bargaining power of domestic rare earth suppliers and to some extent, negatively affecting the domestic rare earth market. The overall price trend of rare earths in 2023 has declined. From the export volume of rare earths over the years, it can be seen that an increase in export volume is the trend. Domestic rare earth suppliers should enhance their bargaining power. Rare earths, as one of the non renewable strategic resources, long-term green and healthy development is a necessary path for the rare earth industry. The statistics of rare earth export volume are as follows:

Finally, the demand side of the new energy industry continues to develop. The development of the new energy sector provides strong support for the domestic rare earth industry, with a significant increase in the production and sales of new energy vehicles. In 2023, the penetration rate of new energy vehicles continues to increase. As of November, the production and sales of new energy vehicles in China reached 8.426 million and 8.34 million, respectively, with a year-on-year increase of 34.5% and 36.7%. The continuous development of new energy vehicles has brought long-term positive support to the domestic rare earth industry. In recent years, the production and sales of new energy vehicles are as follows:

To sum up, in 2023, the domestic rare earth market will decline. The country will be more and more strict in the rectification of the rare earth industry. In 2023, the mining output of rare earth will also increase. New energy vehicles will develop faster and faster. This will form a strong support for the demand of the rare earth market. The new energy and wind power industries will continue to develop. The national policies will benefit the development of the industry. In addition, there will still be a gap in the demand for rare earth in China, Chen Ling, a rare earth analyst at Business Society, predicts that the development of the rare earth industry will continue to improve in 2024, reflecting China’s determination to achieve long-term green development of rare earths. The rare earth market may rise in 2024, and it is expected that the lowest price will appear in the second quarter, while the rare earth market may rise in the third and fourth quarters.

Overview of ethylene oxide prices in December

In December, the price of ethylene oxide remained stable. According to data from Business Society, as of December 29th, the average price of ethylene oxide in the domestic market was 6400 yuan/ton; From a regional perspective, the epoxy ethane market in East China is priced at 6400 yuan/ton externally; The listed price of ethylene oxide in the South China market is 6500 yuan/ton; The listed price of epoxy ethane in North China is 6400 yuan/ton; The listed price of epoxy ethane in the central China market is 6400 yuan/ton; The listed price of ethylene oxide in Northeast China is 6300-6350 yuan/ton.

Overview of the ethylene oxide industry chain

The main downstream polycarboxylate water reducing agent monomer enterprises have low inventory, relatively stable production, and relatively stable demand for ethylene oxide. The rest of the downstream enterprises mainly operate steadily; From the recent upstream and downstream product prices, it can be seen that downstream prices have started to rise, increasing profit margins and strengthening support for the price of raw material ethylene oxide in the short term.

Short term supply may slightly increase, but prices are unlikely to improve in January

The demand for downstream products of ethylene oxide remains stable, and recently, ethylene oxide has been operating steadily. Jiangsu Silbang device may restart, with limited increment nationwide. The main downstream industries have not undergone significant changes in production, with stable orders being the main focus. It is expected that the price of ethylene oxide will remain weak and stable in the short term.

According to monitoring data from Business Society, as of December 25, 2023, the reference market price of domestically produced industrial grade propylene glycol was 8300 yuan/ton. Compared with December 1 (reference price of propylene glycol was 8066 yuan/ton), the price increased by 234 yuan/ton, an increase of 2.89%.

From the monitoring chart of Business Society data, it can be seen that in December, the overall domestic propylene glycol market experienced an upward trend. In the first ten days, the domestic propylene glycol market saw a narrow increase, with an increase of 0.83% in the first ten days. In the later stage, the overall upward trend of the domestic propylene glycol market has relaxed, with a 2.05% increase in the second half of the year. As of December 28th, the domestic propylene glycol market price is around 8200-8400 yuan/ton.

Analysis of supporting factors for the upward trend of propylene glycol market:

In terms of supply: As we enter December, the overall operating rate of the domestic propylene glycol market is low. Due to the continued weak downstream of propylene glycol in the early stage, some factories have delayed the maintenance of propylene glycol equipment. Although downstream demand is average, with the slow shipment of propylene glycol on site, the pressure on the supply side of propylene glycol is gradually decreasing, and supply in some regions is tightening. Therefore, after entering December, the supply side has provided certain support to the propylene glycol market.

In terms of exports: In mid December, the overall export orders for propylene glycol increased, and the improvement in export demand combined with the overall tight supply in the market supported a broad upward trend in the propylene glycol market.

Market analysis of propylene glycol

At present, the overall trading atmosphere in the propylene glycol market is mild, and the mentality of propylene glycol operators is good. The overall supply side pressure on the market is relatively small, but after small-scale downstream stocking, demand has weakened. According to the propylene glycol data analyst from Business Society, in the short term, the domestic propylene glycol market is mainly subject to narrow range adjustment and operation, and the specific trend still needs to pay more attention to changes in supply and demand news.

According to data monitored by Business Society, at the beginning of the year, the mainstream ex factory price of Shanxi light potassium carbonate, including tax, was 9100.00 yuan/ton. At the end of the year, the mainstream ex factory price of Shanxi light potassium carbonate, including tax, was 7530.00 yuan/ton, a decrease of 17.25%. The lowest price of Shanxi light potassium carbonate for the whole year was 7100.00 yuan/ton on August 11th, with the largest decline of 21.98%.

Potassium carbonate

The decline in the potassium carbonate market in 2023 is greater than the increase. From the above chart, it can be seen that the potassium carbonate market has been on a downward trend for 7 months of the year, with a decline for 4 months. The highest increase was in September, with a maximum increase of 1.89%. The largest decline occurred in June, with a maximum drop of 5.38%. The continuous decline in the potassium carbonate market is mainly due to the overall low volatility of the raw material potassium chloride market, poor cost support, poor downstream operating rates, weak transactions in the potassium carbonate market, and a continuous decline in the market.

In 2023, the potassium chloride market showed a trend of first falling and then rising. The domestic potassium chloride market has had poor transactions throughout 2023, with abundant port inventory. In the first half of the year, the supply of potassium fertilizer for the China Europe freight train increased, and agricultural demand weakened, while industrial demand was average. Downstream enthusiasm for purchasing potassium chloride weakened. The market is declining. Although the autumn fertilizer preparation was launched earlier in the second half of the year, the improvement of the potassium fertilizer market was limited. Throughout the year, the decline was greater than the increase, which could not provide strong support for potassium carbonate.

Recently, port inventories have been high, and the market for potassium chloride is not optimistic. Downstream market demand is weak, and it is expected that the price of potassium carbonate will mainly decline in the short term. The long-term market still needs to wait and see.

According to the Commodity Market Analysis System of Business Society, the domestic cyclohexanone market in December saw a first mover and then an increase. From December 1st to 26th, the average price of cyclohexanone in the domestic market first fell from 9406 yuan/ton and then rose to 9412 yuan/ton, an increase of 0.07%, with a maximum amplitude of 0.94%, and a year-on-year increase of 2.31% in price.

At the beginning of the month, the raw material pure benzene was weakly declining, and Sinopec lowered its listing to 7200 yuan/ton. The cost side was weak, and downstream chemical fibers and solvents were purchased on demand. The spot supply of cyclohexanone was not high, but under the resistance of high price shipments, some companies lowered their prices, and the transaction center of the cyclohexanone market fell.

In the first half of the month, the raw material pure benzene was lowered, and Sinopec was listed to lower it to 6800 yuan/ton, lacking cost support. Downstream demand is weak, and the domestic cyclohexanone market is weak and downward, resulting in a lower focus on transactions.

In mid month, the raw material pure benzene oscillated and operated with stable cost support. Downstream demand is average and often followed up on demand. Some companies are temporarily not shipping, coupled with good follow-up of chemical fiber orders last week, resulting in a decrease in factory low price quotations and a decrease in market low prices.

As the end of the month approaches, the domestic price of cyclohexanone tends to be strong, leading to an increase in the raw material pure benzene market and providing good cost support. The spot supply of cyclohexanone has slightly decreased, with downstream companies following up on demand. Driven by cost and supply factors, the market is actively exploring an increase.

On the cost side, the domestic pure benzene market fell first and then rose in December. As of December 26th, the benchmark price of Shengyishe pure benzene was 7050.50 yuan/ton. In the cost composition of the traditional cyclohexanone process route, pure benzene accounts for 53%. The market trend of pure benzene directly affects the price trend of cyclohexanone, and the short-term cost of cyclohexanone is influenced by positive factors.

On the demand side, the domestic caprolactam market saw a significant increase in December, with cyclohexanone units mainly supporting downstream caprolactam production. Caprolactam is one of the main downstream sources of cyclohexanone. Some enterprises are undergoing equipment maintenance or planning to reduce production, resulting in a tight supply of spot goods in the market. As of December 26th, the benchmark price of caprolactam for Shengyishe is 13648.75 yuan/ton. The demand for cyclohexanone is temporarily positive.

In the future market forecast, the cost support is good, and downstream will follow up as needed. Currently, there is no inventory pressure on enterprises. Business Society cyclohexanone analysts predict that the domestic cyclohexanone market will tend to be strong and consolidate in the short term.