As the weekend approaches, the domestic liquid ammonia market continues its decline at the beginning of the week. According to monitoring by Business News, on April 6th, the daily decline in the main production area of Shandong was 2.20%. The cumulative decline this week is 7.5%. The largest factories in Shandong province have cumulatively lowered prices by up to 300 yuan/ton this week. On the one hand, supply has increased, manufacturers’ shipments have slowed down, and inventory pressure has increased. Overlapping imported sources of goods has impacted the domestic market. On the other hand, the downstream product urea lacks support and maintains a weak trend. Subsequently, the contradiction between supply and demand further intensified. At present, the mainstream quotation in Shandong region is between 3600-3750 yuan/ton.

Future forecast: The downstream urea market continues to be weak, while ammonia enterprises are still in the process of accumulating inventory. It is expected that the supply-demand contradiction will be difficult to alleviate in the near future. The price of feed liquid ammonia will still hover at a low level.

1、 Price trend

According to the monitoring of the business community, the price of imported potassium chloride in the domestic market fell slightly in March, and the price of potassium chloride fell from 3850.00 yuan/ton at the beginning of the month to 3712.50 yuan/ton at the end of the month, a decrease of 3.57%. On March 30th, the potassium chloride (imported) commodity index was 117.86, a decrease of 1.58 points from yesterday, a decrease of 32.50% from the highest point in the cycle of 174.60 points (2022-06-21), and an increase of 102.33% from the lowest point of 58.25 points on August 6th, 2020. (Note: The cycle refers to the period from March 1st, 2012 to present)

2、 Market analysis

From the supply side perspective, the prices of mainstream domestic potassium chloride distributors have slightly decreased this month. At the end of the month, 62% of the port’s white potassium was around 3300-3400 yuan/ton, 60% of the port’s large red particles were around 350-3600 yuan/ton, and 62% of the border trade’s Russian white potassium was around 3100 yuan/ton, all of which showed a decrease. The potassium chloride port has a storage capacity of approximately 2.3 to 2.4 million tons.

From the demand side, the price of potassium carbonate market fell slightly this month, from 9120.00 yuan/ton at the beginning of the month to 9020.00 yuan/ton at the end of the month, down 1.10%, and the price at the end of the month fell 0.51% year-on-year. The factory price of potassium nitrate slightly decreased this month, from 5940.00 yuan/ton at the beginning of the month to 5725.00 yuan/ton at the end of the month, a decrease of 3.62%, a year-on-year decrease of 18.79% compared to the same period last year. Overall, the downstream market of potassium chloride has slightly declined. Agricultural demand has weakened, industrial demand is average, and downstream enthusiasm for purchasing potassium chloride has weakened.

3、 Future Market Forecast

In mid to early April, the trend of potassium chloride market may fluctuate slightly, with consolidation being the main trend. The prices of salt lakes and Zangge potassium chloride are stable, with contracts being the main focus. Downstream agricultural demand weakens, industrial demand is average, and procurement is mainly on demand. The price of potassium chloride may fluctuate and fall in the future.

Domestic cobalt prices fluctuated and fell in March

According to data monitoring from Business Society, as of March 31, the cobalt price was 290700 yuan/ton, a decrease of 4.12% compared to the cobalt price of 303200 yuan/ton on March 1. The demand for the lithium battery industry chain is poor, and the prices of products in the lithium battery sector have all declined, with cobalt prices following the decline in March.

Poor demand in the lithium battery industry chain

The quarterly tracking report of International Data Corporation (IDC) shows that the smartphone market is still difficult to say optimistic in 2023. In 2023, the global smartphone market’s shipment volume will be less than 1.2 billion units, a year-on-year decrease of 1.1%; The expected shipment volume in the Chinese market is only 283 million units, a year-on-year decrease of 1.1%. According to a report by market research firm TechInsights, global smartphone shipments (wholesale) and sales (retail) decreased by 11% and 5% year-on-year in February 2023, respectively. The global and Chinese smartphone markets have rebounded, but the consumer recovery in the smartphone market is less than expected, and the expected decline in smartphone shipments in 2023. According to the latest report by market research firm Canalys, the global wearable bracelet market shipped 50 million units in the fourth quarter of 2022, a year-on-year decrease of 18%. Due to factors such as Christmas, the fourth quarter is usually the peak season. Smart wearable devices, as a new luxury consumer, are the “second battlefield” of the mobile phone market. Smart watches have been steadily growing, but in the fourth quarter of the traditional peak season of 22 years, there was an abnormal double-digit decline. Sales of smart watches from major brands all experienced significant declines to varying degrees in the fourth quarter. Inflation and global economic uncertainty have weakened the recovery of consumer demand, The mobile phone market and wearable device market still face serious threats, with poor demand in the lithium battery industry chain and an expected decrease in demand in the cobalt market.

Completion of deposit delivery, no positive stimulus for cobalt market

Due to the impact of national storage, cobalt manufacturers limited their shipments in February, and cobalt prices rebounded and rose accordingly. With the completion of the collection and storage, the supply of cobalt in the market returned to normal in March. After the resumption of production in domestic refineries, the enthusiasm for production is still good, and new production capacity is gradually released. The oversupply situation may further expand, inventory pressure will increase, and support for cobalt price increases will weaken.

Lithium battery sector prices have all declined

From the price trend table of lithium battery industry chain products, it can be seen that the prices of lithium battery industry chain products fell significantly in March. The metal nickel related to lithium batteries has fallen, the price of lithium salts has plummeted, and the price of metal cobalt has also fallen. The sales of new energy vehicles did not meet expectations, and the demand for cobalt in the market was poor, with insufficient support for the rise in cobalt prices.

The import volume of cobalt raw materials increased year-on-year

From the bar chart of cobalt raw material import volume, it can be seen that the import volume of cobalt raw materials increased year-on-year in January and February 2023, and the import volume of cobalt raw materials steadily increased. The cobalt market has sufficient supply, and the downward pressure on cobalt prices will increase in the future.

Overview and outlook

Bai Jiaxin, a data analyst at Business Society, believes that the positive stimulus has weakened, the demand for cobalt remains weak, the supply surplus in the cobalt market has intensified, and the support for future cobalt price increases has weakened. Expect cobalt prices to fluctuate slightly in the future.

Data monitoring shows that the polyacrylamide commodity index stood at 93.13 on March 31, unchanged from yesterday, down 16.48% from the cycle’s highest point of 111.51 (2021-11-03), and up 12.35% from the lowest point of 82.89 on August 2, 2020. (Note: The cycle refers to 2019-04-01 to now)

Commodity market: Data monitoring shows that in March 2023, the mainstream market of polyacrylamide (CPAM, cationic, molecular weight 12 million, 10-30 ionic degree) in China’s domestic market was stable and slightly fluctuating, with the main market price of 15400 yuan/ton on the 1st day and 15242.86 yuan/ton on the 31st day, with a monthly decrease of 1.02%. This month, some manufacturers in the main production areas in China stopped production for about one to two weeks due to environmental requirements, and then returned to normal work. Most manufacturers produced normally, with sufficient inventory in stock. It is understood that the industry situation this year is very bad, downstream demand continues to be weak, and the market trend of polyacrylamide is weak.

Raw material acrylonitrile: According to data from the Business News Agency, the acrylonitrile market continued to fluctuate slightly in March. According to data monitoring by Business News Agency, as of March 31, the bulk water price in the acrylonitrile market was 10050 yuan/ton, down 4.29% from 10500 yuan/ton at the beginning of the month. This month, the domestic acrylonitrile operating rate is between 60% and 70%. On the one hand, raw material prices fell, and the cost of acrylonitrile continued to decline; On the other hand, the supply and demand side of acrylonitrile is currently deadlocked, and the acrylonitrile market is slightly weak. It is expected that the acrylonitrile market will continue to decline slightly in the future.

Raw material acrylic acid: According to the data from the Business News Agency, the acrylic acid market fell sharply in March, with the main price of 8050 yuan/ton reported in East China on the 1st, and the average price of 7100 yuan/ton on the 31st, with a drop of 11.80%. This month, the price of raw material propylene first fell, then rose, and then fell. Supply side enterprises focused on early maintenance, and later construction slightly increased. However, the purchasing mentality on the demand side was cautious, the terminal delivery intention was general, and the enthusiasm for purchasing raw materials through market inquiry was low. In the short term, the acrylic acid market may be light and wait for consolidation and operation.

Liquefied natural gas for production. According to data from Business News Agency, domestic LNG prices fell sharply in March. As of March 31, the average price of liquefied natural gas in China was 4344 yuan/ton, a decrease of 28.03% compared to the average price of 4214 yuan/ton on March 1. Cost support weakened due to lower feed gas prices. Market supply is sufficient and terminal demand is weak. After the end of the heating season in the north, the industrial operating rate is low, and the market supply is significantly oversupplied. Affected by the continuous price reduction of domestic gas, Haiqi also followed the downward trend. Under the influence of negative factors, domestic liquid prices have now fallen to a low level. It is expected that the domestic LNG market will continue to be weak in the short term.

Aftermarket Forecast: The market for raw materials and fuels has all declined this month, and cost support continues to weaken. Some manufacturers have experienced rapid resumption of production in stages, which has not affected the spot inventory of polyacrylamide at the supply end. Due to the overall impact of the current economic situation, the demand for downstream products continues to be sluggish this year, and the industry’s prosperity is not high. It is expected that the polyacrylamide market will continue to be stable, moderate, and weak in the future.

According to the monitoring by the Business Agency, the domestic asphalt market was weak and volatile in March. From March 1st to 30th, the average price of asphalt producers in Shandong fell from 3895 yuan/ton to 3710 yuan/ton, a decrease of 4.73%, and the price rose 24.53% year-on-year.

At the beginning of this month, supported by the relatively strong crude oil, the asphalt market quotation rose. The overall operation of the refinery is relatively stable, and the modification processing has warmed up, driving the upward atmosphere of the asphalt market. In the first ten days of this month, the refinery maintained a state of de-stocking, but the recovery of terminal demand was relatively slow, with the asphalt market rising and falling. In the middle of June, international crude oil fell sharply, and cost support weakened, driving down the price of asphalt market one after another. In the second half of this month, the sharp decline in crude oil and the slow recovery of terminal demand led to a significant decline in the domestic asphalt market price.

On the cost side, the international crude oil market in March fell first and then rose, but overall it still fell. As of March 29, international crude oil futures fell slightly. The settlement price of the main contract for US WTI crude oil futures was US $72.97 per barrel, a decrease of US $0.23 or 0.3%. Brent crude oil futures rose, with the main contract closing at $77.59 per barrel, a decrease of $0.55 or 0.7%. The domestic oil industry chain product market was affected by weak and volatile market conditions.

On the supply side, the comprehensive operating rate of the asphalt industry has increased on a month-on-month basis, with negative impacts on the supply side.

On the demand side, there may be precipitation weather in some areas of the south that may hinder terminal construction, while the weather in the north is moderate. The demand for roads is still tepid and tepid, and sporadic and low-priced goods are mainly needed.

In the future, it is predicted that international crude oil will maintain a volatile trend, with limited support for asphalt cost. From the supply side, the supply of asphalt is gradually increasing, while from the demand side, the demand for roads is still tepid. Asphalt analysts from the Business Agency predict that the short-term domestic asphalt market will be dominated by weak consolidation.