Recently (11.19-11.27), the market price of Shunding rubber has significantly declined. According to the commodity market analysis system of Shengyi Society, as of November 27th, the market price of Shunding rubber in East China was 13360 yuan/ton, a decrease of 8.99% from 14680 yuan/ton on November 19th. The price of raw material butadiene has dropped significantly, and the center of gravity of butadiene rubber has shifted downwards; Shunding rubber production slightly increased; Downstream all steel tire production has slightly decreased. The supply price of Shunding rubber suppliers has been lowered, and merchant offers have been adjusted. As of November 27th, the mainstream price in East China is 13250-13600 yuan/ton.

 

Recently, the price of butadiene has continued to decline, and the cost support for butadiene rubber has weakened. According to the Commodity Market Analysis System of Shengyi Society, as of November 27th, the price of butadiene was 9675 yuan/ton, a decrease of 4.09% from 10087 yuan/ton on November 19th.

 

Recently (11.19-11.27), the domestic butadiene rubber plant started production at 6.40%, with stable to moderate fluctuations.

 

Demand side: Downstream tires mainly provide essential support for the butadiene rubber market. As of November 22, the operating load of semi steel tires in domestic tire enterprises is around 7.9%; The operating load of all steel tires in tire enterprises in Shandong region is about 5.3%.

 

Market forecast: From a fundamental perspective, analysts from Shengyi Society believe that the price of raw material butadiene will continue to fall, and the cost center of butadiene rubber will shift downwards; Recently, downstream production has remained relatively stable, but there is resistance to high priced sources of goods. Overall, the Shunding rubber market may experience weak adjustments in the short term.

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Aluminum prices fall in November

 

Aluminum prices remained strong in early November, showing a strong performance, but have recently fallen back. According to the Commodity Market Analysis System of Shengyi Society, as of November 27, 2024, the average price of aluminum ingots in the East China market in China was 20553.33 yuan/ton, a decrease of 5.37% from the market average price of 21720 yuan/ton on November 8.

 

Positive factors for aluminum prices

 

1. The downward space for aluminum prices has narrowed

 

At present, the absolute price of aluminum ingots is not small, but the actual profit is not significant, and enterprises that do not extract aluminum oxide are experiencing significant losses. Mainly due to the high price of upstream alumina, most of the industry chain profits are allocated to alumina. Affected by the high price of alumina, the average cost price of electrolytic aluminum in China has exceeded 21000 yuan/ton, and the production of a single aluminum ingot is in a state of industry loss. Based on the promotion of industrial integration in the aluminum industry, overall, the comprehensive profit of alumina aluminum ingots aluminum materials is still high, and the expected reduction in production in the short term is not significant. However, enterprises with a large amount of external alumina mining face considerable pressure. Based on cost considerations, the downward space for aluminum prices has narrowed.

 

2. Good domestic supply and demand data for aluminum ingots

 

Overseas imports: The import window for electrolytic aluminum continues to close, leading to a downward shift in Shanghai. Import profits are negative, approaching -2000 yuan/ton. There is no expected increase in overseas supply.

 

Domestic supply: In terms of electrolytic aluminum production, the weekly output of electrolytic aluminum remains around 830000 tons; Inventory data shows that as of November 25th, the inventory of electrolytic aluminum in China’s major markets was 550000 tons, an increase of 60000 tons from 610000 tons on October 31st. As of November 21, the inventory of China’s electrolytic aluminum plant area was 67000 tons, which was 56000 tons compared to October 31, with a cumulative inventory of 9000 tons. The aluminum ingots will be sold out of stock as a whole in November.

 

Negative factors in aluminum prices

 

1. There is an expectation of weakening export demand

 

On November 15, 2024, the Ministry of Finance and the State Administration of Taxation issued a notice on adjusting the export tax rebate policy. Starting from December 1, 2024, all export tax rebates for aluminum products will be cancelled, involving 24 tax codes such as aluminum strips, aluminum foils, aluminum tubes, aluminum tube accessories, and some aluminum bar profiles.

 

The partial 301 tariff policy of the United States came into effect on September 27th. This includes a 100% tariff on Chinese electric vehicles, a 50% tariff on Chinese solar cells, and a 25% tariff on Chinese steel, aluminum, electric vehicle batteries, and key minerals.

 

The cancellation of export tax rebates for downstream aluminum products in China and the implementation of some 301 tariff policies in the United States. Prior to this, under the guidance of the new US president and tax increase policies, the overseas landing costs of exported products have been raised from a domestic perspective. The export demand of the aluminum industry chain is expected to weaken.

 

2. Doubts about the sustainability of cost support

 

Although the short-term cost support for aluminum ingots remains strong, the sustainability of cost support is questionable. The fundamentals of proximal alumina remain favorable, but it has also been reflected in prices, with even alumina prices exceeding expectations and experiencing excessive increases. Currently, the profit window for alumina exports is gradually closing, and due to high prices, there will be more production capacity in the future, and long-term excess pressure will gradually emerge; The risk of alumina price pullback has increased, and the cost support risk of aluminum ingot prices has intensified.

 

Overall, in the short term, domestic aluminum prices will mainly fluctuate weakly, with an increased probability of sideways movement.

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Ethylene glycol prices fall in November

 

The price of ethylene glycol fell in November. According to data from Shengyi Society, as of November 26th, the average price of domestic oil to ethylene glycol was 4600 yuan/ton, a decrease of 0.65% from the average price of 4630 yuan/ton on November 1st.

 

On November 26, 2024, the spot operating price of ethylene glycol at the port was 4600-4630 yuan/ton. The basis of the ethylene glycol spot contract at the port remained stable during the day, with a slight increase. In the morning session, the basis price of the spot contract for this week was+46 to+49, in the afternoon session it was+48 to+50, and in December, the basis price was+55 to+57. After the futures market rose in the afternoon, a small number of customers shipped at high prices, and there were not many buyers, resulting in light trading volume.

 

On November 26th, the price of coal to ethylene glycol remained stable, with prices in the northwest region ranging from 4220-4350 yuan/ton, including taxes.

 

On November 25, 2024, the external price of ethylene glycol was as follows: the landed price in China was $536/ton, a decrease of $4/ton, and the landed price in Southeast Asia was $546/ton.

 

The supply of ethylene glycol is increasing, and the demand is weak

 

On the supply side, the overall operating rate of domestic ethylene glycol has rebounded, with a slight increase in operating rate and a slight increase in production. Specific manifestations: The load of synthesis gas to ethylene glycol is gradually recovering, and due to the weakening demand for ethylene oxide, some non coal production units have switched from producing ethylene oxide to producing ethylene glycol.

 

Demand side: The downstream polyester load is relatively high, and the filament maintains a high operating load, with little room for further improvement. The loading and weaving loads are weakening. Terminal autumn and winter orders have still fallen short of expectations in the near future, with expectations of a weakened polyester load in December.

 

Expected rebound in ethylene glycol inventory

 

The explicit inventory data of ethylene glycol at the port is still relatively low, but there is an expectation of an increase in recent arrivals. There is a strong expectation that ethylene glycol will gradually enter the trend of accumulating inventory in December.

 

Future expectations

 

The fundamentals of ethylene glycol are weakening, and the future price variables of ethylene glycol mainly depend on overseas supply and cost support. It is expected that ethylene glycol prices will fluctuate weakly in the short term.

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Last week (November 18-24, 2024), the price of upstream raw material caprolactam slightly increased, with a slight increase in cost support. However, downstream procurement enthusiasm was not high, and multiple parties followed up on demand. The trading atmosphere in the market was poor, and inventory levels were at a high level. The market lacked positive news support, and the industry had a strong wait-and-see atmosphere. The nylon filament market price remained stable.

 

According to the Commodity Market Analysis System of Shengyi Society, last week (November 18-24, 2024), the market price of nylon filament continued to remain weak and stable. As of November 24, 2024, the price of nylon filament DTY (premium product; 70D/24F) in Jiangsu region is 17240 yuan/ton, which is the same as last week’s price; Nylon POY (premium product; 86D/24F) is priced at 14650 yuan/ton, which is the same as last week’s price. The price of nylon FDY (premium: 40D/12F) is reported at 18150 yuan/ton, which is the same as last week’s price.

 

Raw material prices have slightly increased but remain low

 

Last week (November 18-24, 2024), there was high inventory pressure on the nylon filament raw material caprolactam, and the supply side was still under pressure. Spot prices slightly increased, but prices remained low. The market price of nylon PA6 chips has fallen below the low level in recent years. Although the trend has rebounded after a decline, the market supply is still abundant, and the growth rate of downstream demand is slow. The market for nylon PA6 chips lacks upward momentum, and prices are operating at a low level. The industry chain is mostly pessimistic. As of November 24th, the benchmark price of caprolactam in Shengyi Society is 10826 yuan/ton, which is at a low level.

 

Supply demand

 

The operating rate of nylon filament market equipment is relatively high, currently operating at around 8.4%. The inventory of various manufacturers continues to accumulate, and the overall supply performance on site is loose, with average supply side support; There is still no significant improvement in demand in the terminal market, and downstream yarn factories have a certain degree of risk aversion. They hold onto rigid demand orders from multiple sources, with only a few DTY models showing slightly better demand. It is difficult to find positive support from the demand side in the short term.

 

Future forecast

 

The spot market for raw material caprolactam may be slightly stronger, with a slight increase. The nylon PA6 chip market has bottomed out and rebounded, but the market is still mainly weak, with slightly improved cost support. The supply in the market is at a high level, and downstream market demand is difficult to improve. Negative factors still exist in the market. With the exchange of news in the market, analysts from Shengyi Society predict that the short-term nylon filament market will mainly fluctuate and consolidate, and prices may rebound slightly.

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According to the monitoring of the commodity market analysis system of Shengyi Society, the 1 # tin ingot market in East China fell this week (11.18-11.22), with an average market price of 239860 yuan/ton at the beginning of the week and 242280 yuan/ton at the end of the week, an increase of 1.01%.

 

The recent rebound trend of tin prices within the range. Despite the continued shortage of upstream mineral supply in Myanmar, domestic smelting expectations have increased and there has been no reduction in raw material production.

 

The tin consumer side is highly sensitive to prices, and last week the tin price was adjusted back for replenishment on the consumer side. In the case of insufficient supply from Indonesia, it is expected that the domestic transfer to destocking will likely continue, but the smelting end will not reduce production, so the destocking will not be too significant. At the end of the year, China entered the off-season for consumption, and imported tin ingots continued to flow in. It is expected that tin prices will fluctuate in the future.

 

Overall analysis shows that insufficient upstream supply provides support for tin prices, but an increase in import volume has a restraining effect on the rise of tin prices. In the short term, the upward trend lacks momentum and is expected to fluctuate and consolidate within the range.

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