Aluminum price bottomed out and rebounded

According to the data of business agency, on July 29, the average market price of domestic aluminum ingots in East China was 18633.33 yuan / ton, up 1.45% daily, down 2.27% from the average market price of 19066.67 yuan / ton at the beginning of the month (7.1), and down 4.49% from the average market price of 19090 yuan / ton in the same period last year.

At the peak in 2021 (October 19, 2021), the average market price of aluminum ingots was 24240 yuan / ton, and the recent deviation from the peak fell by 23.13%. Starting from the recent recovery (December 13, 2021), the average market price of aluminum ingots is 18693.33 yuan / ton, up 0.32% recently. At present, the price basically returns to the valley value that plummeted after last year’s peak.

Fundamentals overview

In July, the aluminum price generally operated in the “V” word. In the early stage, the social inventory went to the warehouse periodically, but the price moved down. This week, the social inventory accumulated slightly, but the price stabilized and rose.

At present, on the supply and demand side, the output continues to rise, and there is a certain pressure on the supply side. Recent non-ferrous sector capital factors dominate the upward band. The expected price rise, on the one hand, comes from the measures to stabilize real estate & the favorable policy of domestic automobile consumption and the expected improvement of terminal demand. On the other hand, in the early stage, the price fell to the 17000 line, touching part of the cost line, and the game intensified. There was expectation and demand for a rebound at the bottom of the market.

Downstream products are also in the state of destocking, and consumer demand is rising. It is expected that the price of aluminum ingots will be strong in the short term.

1、 Trend analysis

According to the nickel price monitoring of the business society, the nickel price in July was mainly wide-ranging. At the beginning of the month, the nickel price was 182833.33 yuan / ton, and at the end of the month, the nickel price rose slightly to 183550 yuan / ton, with an overall decline of 0.39% and a year-on-year increase of 24.93%.

Macro aspect: according to the data of the U.S. Department of labor, the year-on-year increase of the U.S. consumer price index (CPI) from March to May was more than 8% for three consecutive months. In June, CPI increased by 9.1% year-on-year, hitting a new high in nearly 41 years. On July 21, the European Central Bank announced that it would raise the three key interest rates by 50 basis points, which was higher than the 25 basis points previously expected by the market and exceeded the European Central Bank’s forward-looking guidance in June. On the 27th, the Federal Reserve announced a 75 basis point increase in interest rates, raising the target range of the federal funds rate to between 2.25% and 2.5%. This is the fourth interest rate hike by the Federal Reserve this year and the second consecutive 75 basis points hike.

Supply side: Philippine nickel ore exports increased, and port inventories continued to accumulate. Indonesian Ferronickel, high matte and Hydrometallurgical intermediate MHP are gradually supplied in large quantities, and the domestic ferronickel market is in surplus. In June, China’s electrolytic nickel (pure nickel) output was 16150 tons, an increase of 9.9% month on month, and will continue to increase in July; In June, nickel sulfate produced 28800 tons of metal, an increase of 12.6% month on month.

In terms of demand: the crude steel output of domestic stainless steel plants decreased significantly month on month in June, and most of the steel plants lost money. Maintenance and production reduction were arranged intensively in June and July. The crude steel output of 33 domestic stainless steel plants was 2.6219 million tons, a month on month decrease of 8.56%. In June, the production and sales of new energy vehicles hit a record high, with an average year-on-year increase of 1.3 times. The output of China’s ternary precursor was about 66900 tons, an increase of 22.2% month on month. It is expected that the output of power batteries in July will increase by 10%-20% month on month, doubling year-on-year, and the demand for new energy nickel will continue to improve.

To sum up: the supply of nickel ore has increased, and the supply of nickel is relatively loose. In terms of demand, the downstream stainless steel is weak, and the demand for new energy nickel is good. In August, the fundamentals are similar, and the nickel price is expected to continue the trend of July, with a low-level wide range shock trend.

Recently, with the red of raw materials, the market price of polyester filament has ushered in a wave of rebound. According to the price monitoring of the business club, as of July 27, the prices of various products have increased to varying degrees compared with July 22. Among them, polyester DTY and polyester POY have increased by 1.39% and 1.19% respectively, and polyester FDY has increased by 0.98%.

Rise and fall of average market price of polyester filament unit: yuan / ton

Products, 2022-07-22, 2022-07-27, rise and fall, year-on-year rise and fall

Polyester POY (150d/48f), 7922, 8016, 1.19%, 2.12%

Polyester FDY (150d/96f), 8478, 8561, 0.98%, 6.02%

Polyester DTY (150d/48f low elasticity), 9171, 9298, 1.39%, -2.19%

In terms of raw materials, near the end of the month, due to concerns about supply tightening, crude oil prices have slightly warmed up. As of July 26, the settlement price of the main contract of WTI crude oil futures in the United States was $94.98 / barrel, and the settlement price of the main contract of Brent crude oil futures was $99.46 / barrel. The operating rate of PTA industry remained low near 73%. The price of crude oil followed the rise. As of July 27, the average market price was 6062 yuan / ton, up 4.81% from July 19 and 12.59% year-on-year.

Stimulated by the low price, the terminal textile enterprises began to have a strong atmosphere of bottom reading, and the raw material preparation was concentrated until the end of the month, with a slight improvement in the order atmosphere. However, at present, the industry is in the off-season, and the high-temperature power consumption in the south is at a peak. Some downstream enterprises in Zhejiang Province have received the notice of power restriction. At present, the startup rate of most weaving factories is at a low level, and the comprehensive startup rate of looms in Jiangsu and Zhejiang regions remains around 50%.

Business analysts believe that the current price of polyester filament is still dominated by costs, and the wait-and-see sentiment in the oil market intensifies as the Federal Reserve raises interest rates. The spot of PTA supply side is still tight, and some PTA devices still have maintenance plans. Affected by the off-season, the demand side is expected to further reduce production, and after a round of stock replenishment in the early stage, the wait-and-see mood increases, and the confidence in the future market is insufficient, mainly just need to purchase. As a result, polyester filament inventory is still at a historically high level. According to statistics, the average total inventory of polyester filament is 35.5 days, an increase of 15.4 days compared with the same period last year. With no substantial improvement in demand, the polyester price rebound is expected to be unsustainable and will continue to be under pressure in August.

According to the monitoring data of business agency, as of July 26, the average price of propylene oxide enterprises was 9326.67 yuan / ton, down 4.18% from last Thursday (July 21), 14.43% from June 26, and 20.06% year-on-year in a three-month cycle.

Recently (7.21-7.26), the propylene oxide market fell. Recently, the raw propylene market fluctuated and fell, the cost support was general, and some units fell negative, but many inventories were under pressure. The downstream reduction was followed up carefully, and the market was weak. With the price falling, the market shipment situation improved, and the inventory pressure eased. On the 26th, the mainstream quotation of epoxypropane market in Shandong fell to about 7900-8000 yuan / ton.

Upstream propylene, according to the monitoring data of business news agency, on July 25, the reference price of propylene was 7314.60, a decrease of 4.77% compared with July 1 (7680.60).

Downstream propylene glycol, according to the monitoring data of business news agency, the reference price of propylene glycol was 8933.33 on July 25, a decrease of 24.72% compared with July 1 (11866.67).

According to the propylene oxide analysts of business agency, the current propylene oxide price is low, the cost side is under pressure, some devices on the supply side are reduced, the demand side is increased, and the market atmosphere has rebounded. It is expected that the propylene oxide market may stop falling in the short term.

Trade name: cryolite

Latest price (July 25):7650 yuan / ton

Key points of analysis: on July 25, the price trend of cryolite was stable, and the average production price in Henan was flat compared with the previous working day. The upstream raw materials are tight, the prices are high, the production costs of enterprises are large, the start-up is low, the enterprise inventory is tight, the downstream demand is stable, the enterprise shipments are smooth, and the high cryolite prices are supported.

Aftermarket forecast: the short-term cryolite market is temporarily stable and on the sidelines, and the price may be reduced. The aftermarket will pay attention to the market supply.