Zinc prices plummeted significantly in May

According to the Commodity Market Analysis System of the Business Society, as of May 31, the zinc price was 19426 yuan/ton, a decrease of 9.11% compared to the zinc price of 21374 yuan/ton on May 1. In May, the spot zinc price fell below the 20000 yuan mark, setting a new historical low since March 2021.

China Manufacturing Purchasing Managers Index

According to data released by the National Bureau of Statistics, in May, the Purchasing Managers’ Index (PMI) of the manufacturing industry was 48.8%, a decrease of 0.4 percentage points from the previous month, below the critical point, and the level of manufacturing prosperity slightly declined. The level of China’s economic prosperity has declined, and the foundation for restoring development still needs to be consolidated. The recovery of the manufacturing industry has been poor, and the demand for zinc in the market has fallen short of expectations.

Low demand for zinc ingots during the off-season of consumption

According to the Commodity Market Analysis System of the Business Society, since April, the price of galvanized sheet has fluctuated and fallen, with low production levels for galvanized sheet and zinc oxide enterprises. The downstream consumption season of the zinc market is low, and the demand for zinc ingots is sluggish.

The domestic real estate market is weak

According to data released by the National Bureau of Statistics, from January to April, the national investment in real estate development reached 3551.4 billion yuan, a year-on-year decrease of 6.2%. From January to April, the construction area of real estate development enterprises’ houses was 7712.71 million square meters, a year-on-year decrease of 5.6%. The newly constructed area of houses is 312.2 million square meters, a decrease of 21.2%. The completed area of houses is 236.78 million square meters, an increase of 18.8%. In April, the real estate development prosperity index was 94.78. The real estate market is weak and the prosperity index is insufficient, and the demand for zinc ingots is less than expected, increasing the downward pressure on the zinc market.

Expected excess supply in the zinc market

From the trend chart of zinc concentrate processing fees, it can be seen that the decline in zinc concentrate processing fees slowed down in May, and there was a brief rebound in zinc concentrate processing fees. Zinc concentrate processing fees stopped falling, zinc smelting enterprises’ enthusiasm for starting operations increased, zinc ingot production is expected to increase, and zinc market supply is expected to increase.

Expectations of zinc surplus continue to expand

According to data analysis from CRU Group, demand for zinc will be relatively weak in the coming years, while zinc mining and refining production will continue to grow. In the next five years, global refined zinc production is expected to increase by 1.3 million tons, a year-on-year increase of 3.4%; Among them, there will be an increase of 800000 tons outside of China, and an increase of approximately 500000 tons in China. Due to the economic recovery in China and Europe, global refined zinc demand is expected to increase by 2.7% year-on-year this year, reversing the 4.1% decline in 2022, but the demand growth rate is slower than the supply growth. The surplus supply of zinc continues to expand, and it is predicted that the zinc price on the London Metal Exchange (LME) will decrease from $3442 per ton in 2022 to $3050 per ton in 2023, with a potential further decrease to $2525 in 2024 and $2000 in 2025. Expectations of excess supply in the zinc market have increased the pressure on zinc prices to decline.

Future Market Forecast

According to data analysts from Business Society, in terms of supply, zinc concentrate processing fees are stabilizing. At the same time, the impact of Yunnan power restrictions on zinc smelting enterprises is weakening, and the enthusiasm of zinc smelting manufacturers to start operations is increasing. The supply of zinc in the market is stable. In terms of demand, during the off-season in the galvanized sheet and zinc oxide markets, demand for zinc ingots is weak, PMI in domestic manufacturing has decreased, the real estate infrastructure market has weakened, and expectations for zinc market demand have weakened. International zinc market demand is weak, and the pressure on zinc price decline has increased. In the future, the supply of zinc in the market is stable and the demand is sluggish, with significant pressure on zinc ingots. It is expected that zinc prices will fluctuate and fall in the future.

According to the Commodity Market Analysis System of the Business Society, as of May 30th, the average price quoted by epichlorohydrin enterprises was 8875.00 yuan/ton, a decrease of 1.39% compared to May 1st.

The market price of epichlorohydrin fell slightly in May. In the first half of the month, the raw material propylene market was operating weakly, with slightly weaker support for the cost side of the propylene method. The price of raw material glycerol was stable, and there was some support for the cost side of the glycerol method. The industry’s capacity utilization rate slightly declined, and supply side support was still acceptable. However, the demand side follow-up was limited, and inventory of raw materials was consumed in the downstream. The main focus of the market was to replenish goods on dips and demand. The trading atmosphere in the market was light, and the focus of discussions on epichlorohydrin was narrow and downward. In the second half of the month, the price of raw material propylene fluctuated narrowly, while the price of glycerol remained stable. There was some support on the cost side, while the supply and demand side was average. Enterprises mainly delivered orders, but the market remained stagnant and narrow in scope. As the price of raw material propylene decreased, the cost side support for propylene method weakened, and glycerol prices remained stable and stable. The cost pressure for glycerol method remained, and the industry’s capacity utilization rate increased compared to the previous period. The demand side was sluggish, and manufacturers were under pressure to ship, resulting in insufficient mentality among operators, The market is operating in a weak state, with narrow range consolidation of enterprise quotations and mixed ups and downs. As the end of the month approaches, the overall market for epichlorohydrin is operating in a light manner.

From the upstream and downstream perspectives, the reference price of upstream propylene was 6470.75 on May 29th, a decrease of 8.25% compared to May 1st (7052.60). Downstream epoxy resin, on May 29th, the reference price of epoxy resin was 14100.00, a decrease of 3.64% compared to May 1st (14633.33).

Analysts from Business Society’s epichlorohydrin believe that the current price of raw material propylene has slightly increased, with limited cost support and weak demand support. The market trading atmosphere is flat, and it is expected that the epichlorohydrin market may be weak in the short term. More attention should be paid to market news guidance.

The price of plasticizer DOTP rose first and then fell in May

According to the Commodity Market Analysis System of the Business Society, as of May 29th, the price of DOTP was 9851 yuan/ton, a decrease of 8.45% compared to the price of 10760 yuan/ton on May 7th; The price has increased by 0.41% compared to 9811 yuan/ton on May 1st. Insufficient support for the rise of raw materials, the price of plasticizer DOTP rose first and then fell in May.

The price of isooctanol rose first and then fell in May

According to the Commodity Market Analysis System of the Business Society, during the May Day holiday, the sudden shutdown of isooctanol devices drove up the price of isooctanol rapidly. On May 8th, the price of isooctanol was 10183.33 yuan/ton, a sharp increase of 11.90% compared to 9100 yuan/ton on May 1st; DOTP production enterprises have octanol contracts to be executed, and there is also an appropriate amount of pre holiday stock of raw materials. Therefore, in the face of a sharp rise in the market, downstream customers have a low intention to buy at a high level, and there are gradually news of production stoppages. Insufficient demand has led to a rapid decline in the price of isooctanol. On May 12, the price of isooctanol was 9566.67 yuan/ton, a decrease of 6.06% compared to May 8, when the price of isooctanol was 10183.33 yuan/ton; Afterwards, the supply and demand of isooctanol were relatively balanced, and the price of isooctanol stabilized at a high level. As of May 29, the price of isooctanol was 9460 yuan/ton, an increase of 3.96% compared to 9100 yuan/ton on May 1. In May, the price of isooctanol fluctuated and consolidated, but the current price is still difficult to attract the buying sentiment of end users, resulting in weak market transactions. The support for the increase in plasticizer product costs is weakened, and the price of plasticizer DOTP fluctuated and fell.

PTA prices fluctuated and fell in May

According to the Commodity Market Analysis System of the Business Society, PTA prices fluctuated and fell in May; As of May 29th, the PTA price was 5614.55 yuan/ton, a decrease of 9.15% compared to the PTA price of 6180 yuan/ton on May 1st. Crude oil prices fluctuate and fall, naphtha prices fluctuate and fall, PTA raw material costs decrease, and PTA prices fluctuate and fall.

Downstream PVC prices fluctuate and fall

According to the Commodity Market Analysis System of the Business Society, PVC prices fluctuated and fell in May, resulting in weak downstream demand; As of May 29th, the price of PVC was 5530 yuan/ton, a decrease of 6.67% compared to the price of PVC on May 1st, which was 5925 yuan/ton. The economy is weak, PVC demand is weak, PVC prices are fluctuating and falling, and there is insufficient demand for plasticizers.

Future expectations

Analysts from Business Society’s plasticizer product data believe that in May, the price of isooctanol first rose and then fell, PTA prices fluctuated and fell, plasticizer product raw material prices fell, and DOTP costs decreased; PVC prices have fallen, and demand for plasticizer DOTP is weak. Overall, the supply of isooctanol has basically returned to normal, with insufficient support for the increase in raw material costs of plasticizer DOTP. The demand for plasticizers remains weak, and it is expected that plasticizer prices will decline weakly in the future.

According to the Commodity Market Analysis System of the Business Society, the domestic methanol market has stabilized at a low level. From May 22nd to 26th (as of 15:00 in the afternoon), the average price of the East China port in the domestic methanol market increased from 2190 yuan/ton to 2194 yuan/ton. During the cycle, the price increased by 0.15%, with a maximum amplitude of 2.51%, a month on month decrease of 15.24%, and a year-on-year decrease of 21.67%.

The domestic methanol market continued to be weak, the futures price fell below the 200 yuan/ton mark, the raw coal market continued to be depressed, and the market sentiment became increasingly lack of confidence. The downstream demand has been weak for a long time, the social inventory in the methanol market has been accumulating, and the source of import goods has also been pouring in. The spot market price of methanol has fallen again and again. Towards the weekend, there was a wave of bargain hunting, and the market rebounded in a narrow range.

As of the close on May 26th, methanol futures on the Zhengzhou Commodity Exchange fluctuated upwards. The MA2309 contract opened at 1988 yuan/ton, with a maximum price of 2055 yuan/ton and a minimum price of 1953 yuan/ton. It closed at 2049 yuan/ton, a decrease of 37 yuan/ton compared to the previous trading day. As of the closing date, the position of the MA2309 contract was 2021800 hands, an increase of 121800 hands compared to the previous trading day.

On the cost side, there is a clear contradiction between supply and demand in the market, and the trading atmosphere is weak. The price of raw coal is mainly weak. The cost of methanol is relatively weak.

On the demand side, the demand for methanol is mixed.

On the supply side, Inner Mongolia Dongri’s 200000 ton/year device has been put into operation. Inner Mongolia and Baitai, Xinjiang Xinye, Northwest Energy, Jiangsu Sopu, Pucheng Clean Energy, and a set of equipment maintenance in Shanxi. Shandong Mingshui, Xianyang Petroleum, Shenhua Ningmei, Inner Mongolia Dongneng, Jinmei Huayu, and a set of equipment maintenance in Inner Mongolia. The overall recovery exceeds the loss, so the capacity utilization rate has increased this week. The supply side of methanol is negatively affected.

In terms of external trading, as of the close on May 25th, the CFR Southeast Asian methanol market closed at $325.00- $327.00 per ton, a decrease of $3 per ton. The closing price of the US Gulf methanol market is 80.00-83.00 cents per gallon; The closing price of the FOB Rotterdam methanol market is 2700.00-272.00 euros/ton.

According to future forecasts, supply remains abundant, demand changes are limited, and costs continue to be weak. Business Society Methanol Analysts predict that the domestic methanol market may continue to be weak.

According to the monitoring of the commodity market analysis system of the Business Society, the prices of industrial grade and battery grade lithium carbonate have fluctuated this week. On May 25th, the average domestic mixed price of industrial grade lithium carbonate was 282000 yuan/ton, an increase of 1.81% compared to the average price of 277000 yuan/ton on May 21st. On May 25th, the average domestic mixed price of battery grade lithium carbonate was 304000 yuan/ton, an increase of 1.33% compared to the average price of 300000 yuan/ton on May 21st.

By observing market changes, it can be seen that the price of lithium carbonate has increased first and then decreased this week, with a slight downward trend. The price of upstream raw material lithium mica is still at a high level and the supply is limited, so traders have a certain reluctance to sell. The pricing power of spodumene is concentrated in overseas mines, and some lithium salt plants that extract spodumene from overseas are still in a state of production reduction due to cost issues. In addition, there was a strong sentiment of lithium carbonate being overpriced in the early stage, making it relatively difficult to find low-priced spot goods.

In terms of demand, downstream material factories mainly restock on demand, while some downstream companies accept high lithium prices due to strong demand, leading to a slight increase in the actual transaction price of lithium carbonate and a significant shift in lithium salt inventory. But at the same time, some downstream areas are still in a wait-and-see state. At present, the market sentiment of lithium carbonate is somewhat calm, and the price gradually returns to the fundamental operation.

Downstream lithium hydroxide prices are stabilizing. As the lithium carbonate market gradually returns to rationality, the lithium hydroxide market is also paying more attention to the actual recovery of demand, and the wait-and-see sentiment in the spot retail market has intensified.

The price trend of downstream lithium iron phosphate is on the rise, with a positive market trading atmosphere. The demand from downstream manufacturers is moderate, and the inventory of lithium iron phosphate is average. The price of upstream lithium carbonate is at a high level, with some cost support. The current trend is still strong, with an increase in downstream demand for lithium iron phosphate and smooth shipping.

Lithium carbonate analysts from Business Society believe that the current trend of the lithium carbonate market is gradually rational, with an increase in market supply. Some traders are in a selling mood, and despite no significant improvement in actual demand, the upstream and downstream games are still ongoing. It is expected that the short-term price of lithium carbonate will be mainly volatile and organized.