Aluminum prices fluctuated sideways in May

According to the Commodity Market Analysis System of Business Society, as of May 31, 2023, the average price of domestic aluminum ingots in the East China market was 18290 yuan/ton, a decrease of 1.08% compared to the aluminum price of 18490 yuan/ton at the beginning of the month (May 1).

In the long term, the current price is in the sideways range after a high price decline, and has been fluctuating in the range of 17500 to 19500 yuan/ton.

Overview of Fundamentals

1. The cost center of electrolytic aluminum smelting continues to move downwards. The decline in prices of pre baked anodes, alumina, and coal has weakened the cost support for aluminum prices/ P>

2. On the domestic demand side, the operating rate of downstream processing enterprises has slightly declined, and it is expected that the operating rate will be difficult to improve as the industry’s off-season approaches.

On the domestic supply side, production capacity in various regions has continued to increase slightly, and the tense situation has improved. Inner Mongolia Baiyinhua Aluminum Industry plans to fully achieve production of 400000 tons in the second half of the year.

Future market forecast

In terms of inventory, the domestic social inventory continues to decline, and the profit level per ton of aluminum is currently acceptable. It is expected that the supply of manufacturers will not decrease in the future, but it is still necessary to continue to pay attention to the water and electricity supply situation in the southwest region. It is expected that aluminum prices will maintain the current broad volatility pattern in the short term.

1、 Price trend

According to the commodity market analysis system of the business community, the average market price of 55% powdered monoammonium was 3037 yuan/ton on May 1, 2687 yuan/ton on May 30, and the market price of monoammonium phosphate fell 11.52% this month.

According to the commodity market analysis system of the business community, the average price of 64% of diammonium phosphate market was 3893 yuan/ton on May 1, and the average price of 64% of diammonium phosphate market was 3833 yuan/ton on May 30. The market price of diammonium phosphate fell 1.54% this month.

2、 Market analysis

The price of monoammonium phosphate has continued to decline this month. The price of raw material phosphate rock has decreased, and cost support is insufficient. The market demand is weak, and there is insufficient follow-up on new orders. A small amount of procurement is the main focus, and the focus of market transactions continues to shift downwards. As of May 30th, the factory quotation for 55 powdered ammonium in Henan region is about 2600 yuan/ton, the market quotation for 55 powdered ammonium in Hunan region is about 2560-2700 yuan/ton, and the market quotation for 55 powdered ammonium in Sichuan region is about 2550-2700 yuan/ton. Actual negotiations are the main focus.

The price of diammonium phosphate has decreased this month. The trend of raw material prices is poor, and cost support is weakening. The supply of corn fertilizer is relatively low, downstream demand is weak, and the market trading atmosphere is cold. The market has a strong mentality of buying up rather than buying down. As of May 30th, the 64% market price of diammonium in Heilongjiang region is around 4000-4050 yuan/ton, the 64% market price of diammonium in Shandong region is around 3700-3850 yuan/ton, and the 64% market price of diammonium in Hubei is 3450-3600 yuan/ton. The actual transaction is negotiated.

The raw material phosphate rock market has shown a weak downward trend in the overall domestic phosphate rock market this month. In early May, the downstream yellow phosphorus industry chain and terminal demand showed average performance. The overall downstream construction started at a low level, and the demand for raw materials weakened. From bottom to top, phosphorus ore support was loosened, and the overall focus of phosphorus ore was explored. In late May, the supply side of the phosphate rock field continued to be tight, and under relatively low pressure from the supply side, the overall market remained stable. Towards the end of the month, the overall shipment situation of phosphate ore is not good, and downstream demand is weak. The overall phosphate ore market continues to decline and operate in a weak manner,

The market for raw sulfur has fluctuated and increased in domestic sulfur prices this month. In mid to early May, the sulfur market in East China was relatively strong and consolidated. Due to the maintenance of some refinery equipment, the supply of goods has decreased, and manufacturers are actively shipping. The market mentality is bullish, coupled with better upstream and downstream procurement, the sulfur quotation continues to rise. In late May, downstream purchasing returned to rationality, and there was a need to follow up immediately after entering the market. Refinery shipments were mainly stable, while some enterprises had poor shipments, resulting in a slight decrease in sulfur prices.

3、 Future Market Forecast

According to ammonium phosphate analysts from Business Society, the market for raw material phosphate rock has been weakening and declining recently, leading to a weakening of cost support for ammonium phosphate. Insufficient follow-up of terminal demand, resulting in continued sluggish market demand. Under the current negative market impact, it is expected that the ammonium phosphate market will continue to be weak and downward in the short term.

This week (5.22-5.29), the market for chloroform rose. According to data from Business Society, as of May 29th, the price of trichloromethane bulk water in Shandong Province was 2225 yuan/ton, an increase of 4.71% from last Monday’s 2125 yuan/ton. The price of raw material methanol fluctuates slightly, and the cost support for trichloromethane is weak; Recently, some downstream enterprises have taken stock replenishment actions, and short-term demand has been supported by trichloromethane. The market for trichloromethane has slightly increased.

This week (5.22-5.29), there was a slight fluctuation in the start of the methane chloride plant.

This week (5.22-5.29), the price of raw material methanol has stabilized at a low level, and the cost support for trichloromethane is still weak. According to the Commodity Market Analysis System of Business Society, as of May 29th, the spot price of methanol was 2191 yuan/ton, an increase of 0.04% from last Monday’s 2190 yuan/ton, and the low point during the cycle was 2135 yuan/ton.

Short term export orders provide support for trichloromethane, but due to the domestic refrigeration market entering the end of the traditional peak season. The parking and maintenance prices of some downstream refrigerant R22 enterprises are temporarily stable, and in addition, the total production quota of R22 will be reduced by 19% to 181800 tons in 2023, making it difficult to improve the demand for trichloromethane in the medium to long term.

According to methane chloride data analysts from Business Society, although the supply pressure in the trichloromethane region is currently relatively low, the overall domestic demand support is weak, coupled with low cost consolidation, and it is expected that the trichloromethane market will fluctuate in a narrow range in the future.

Price trend

This week, the domestic PA66 market showed significant stability and slight fluctuations. According to data monitoring from Business Society, the average factory price of PA66 in China on May 26th was 20866.67 yuan/ton, a+2.62% increase or decrease compared to the price level at the beginning of the month.

Cause analysis

After the PA66 market recovered this week, it stabilized, and overall, spot prices of various brands rose narrowly. In terms of supply, the overall load of the domestic PA66 industry is currently around 66%, which has decreased compared to the previous period. Some enterprises have lowered their burden, and supply contraction has formed a certain support for the spot market. Inventory has also been partially digested, market supply has decreased compared to the previous period, supply side support has rebounded, and enterprise pricing operations have been narrowly repaired. On the upstream side, the raw material hexamethylene diamine remained stable, while on the other hand, the price of adipic acid continued to decline due to a lack of positive market guidance. The raw material side of PA66 has poor support for spot goods. The demand situation is stable, and terminal enterprises need to follow up on their purchases. Buyers generally have limited acceptance of high priced goods. It is expected that PA66 may continue to consolidate its market in the short term.

Future Market Forecast

This week, the spot price of PA66 stabilized after repairing. The raw material market is weak, and the cost support for PA66 is average. The load of PA66 enterprise has decreased, supply has tightened, and the overall inventory position is average. The demand side takes goods to maintain production, and it is expected that in the short term, PA66 may be supported by suppliers and tend to be more organized and operated.

On May 25th, approaching the weekend, domestic liquid ammonia continued its decline this week and continued to decline. According to the Commodity Market Analysis System of Business Society, the main production area of Shandong fell by 2.19% daily, and the trading center moved down the range of 200 to 300 yuan/ton compared to the beginning of the week.

Liquid ammonia has shown an overall downward trend this week, with an increase in supply in the main production area of Shandong, and a high operating rate among enterprises. Many ammonia companies have switched to producing liquid ammonia due to increased production, resulting in inventory backlog. Coupled with a large number of imported goods arriving at the port last week, this has had an impact on the liquid ammonia market in the region. Shandong large factories have repeatedly lowered factory prices this week, with a cumulative range of around 300 yuan/ton. On the demand side, due to the impact of the current off-season agricultural demand, downstream procurement has slowed down, and the dual pressure of supply and demand has led to a continuous decline in the price of liquid ammonia. At present, the mainstream quotation in Shandong region is between 2700-3000 yuan/ton.

Prediction: Liquid ammonia analysts from Business Society believe that the supply and demand of ammonia in the short term are not favorable, and prices will continue to be weak in the near future.