According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of LLDPE (7042) was 8636 yuan/ton on November 14th, and the average price was 8700 yuan/ton on November 21st, with a price increase of 0.73% during this period.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of LDPE (2426H) was 10733 yuan/ton on November 14th, and the average price was 10816 yuan/ton on November 21st, with a price increase of 0.78% during this period.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of HDPE (2426H) was 8500 yuan/ton on November 14th, and the average price was 8500 yuan/ton on November 21st, during which the quotation was temporarily stable.

Recently, the trend of polyethylene has been strong, with LLDPE and LDPE showing significant increases, and HDPE prices remaining firm. On the supply side, the maintenance of enterprise equipment is relatively concentrated, and the supply of goods is tight, which is favorable for the polyethylene market. Petrochemical companies have slightly increased their quotations, and traders have followed suit with offers. The demand for agricultural film in November has weakened from the peak season, with some factories operating at a lower rate compared to the previous period. Downstream demand for essential supplies has been maintained, with limited new orders and average market transactions. The favorable policies have boosted the plastic market, and the market mentality is relatively strong.

On November 21st, the polyethylene L2501 contract on the Dalian Commodity Exchange opened at 8475 yuan and closed at 8445 yuan, up 38 yuan, with a maximum of 8502 yuan and a minimum of 8417 yuan, up 0.45%. The recent strong trend of polyethylene futures has boosted the spot market.

The maintenance of the equipment will be concentrated in November, and new production capacity will be put into operation in December, with an expected increase in the supply side; The demand for greenhouse film is gradually coming to an end; Downstream consumers are more resistant to high priced goods sources, limiting the upward potential. It is expected that the upward potential of polyethylene will be limited in the short term.

In mid November, the domestic ABS market remained stable with small fluctuations, and the spot prices of various grades showed relatively narrow changes. According to the Commodity Market Analysis System of Shengyi Society, as of November 20th, the average price of ABS sample products was 11500 yuan/ton, an increase or decrease of+0.11% compared to the price level at the beginning of the month.

Fundamental analysis

Supply level: In mid November, the operating rate of the domestic ABS industry continued to rise, and the load level continued to increase. After the load increase in Tianjin Dagu and Jilin Petrochemical in the first ten days, the supply of Zhejiang Petrochemical has also increased recently. The industry’s operating rate has increased by nearly 4% to over 73%. The overall production of goods within the range remains higher than the digestion pattern, with an average weekly output of over 120000 tons. Although inventory accumulation has stabilized, its position remains at a high of 190000 tons. Overall, the supply side’s support for ABS spot prices continued to decline in mid November.

Cost factor: Recently, the three upstream materials of ABS have shown mixed trends, with overall support for ABS costs being average. The acrylonitrile market has seen a significant increase. Due to the high number of parking and maintenance facilities in acrylonitrile factories in East China, market prices continue to rise under tight supply. However, the downward transmission of prices is difficult, and it is expected that the short-term acrylonitrile market will have limited upward space.

In mid November, the domestic butadiene market continued to decline. There is news of equipment being put into operation in Tianjin, and the market is expected to see an increase in supply in the future. The inventory of ports in East China is also high, and overall, there are many negative factors on the supply side. On the demand side, the downstream synthetic rubber market trend is weak, and the downstream wait-and-see mentality is strong, lacking demand support. The butadiene market trend is weak this week.

Recently, the styrene market has been weak and fluctuating. The performance of crude oil in the far end of the range is average, and the direct raw material pure benzene market has seen a narrow increase in momentum, making it difficult to provide further cost support for styrene. In addition, due to the impact of inventory replenishment at various ports, the loose supply trend has provided moderate support for the spot market. Businesses are concerned about the lack of market drivers and tend to be cautious when placing orders.

On the demand side: In mid November, the main terminal demand for ABS continued to be weak, and the market sentiment remained strong this month. Although the “Double Eleven” shopping festival and subsidy policies have stimulated the sales of some terminal products, the overall load position of home appliances and other factories has limited recovery, and the willingness of terminal stocking is not strong. Purchasing operations are mainly based on weak rigid demand to maintain production, which can barely maintain the balance between domestic consumption and inventory. Merchants have insufficient willingness to establish warehouses, and their offers are subject to market conditions, resulting in average activity in the circulation of goods. Overall, the demand side does not provide significant assistance to the market.

Future forecast

The domestic ABS market remained volatile and organized in mid November. Upstream three materials showed mixed ups and downs, providing average comprehensive support for ABS cost side. The load of ABS polymerization plant continues to rise, and finished product inventory remains high and sideways. The weak demand on the demand side is difficult to change, and market trading is sluggish. The pattern of strong supply and weak demand in the market has not changed. It is expected that the ABS market will remain weak in the short term in the future.

According to the Commodity Market Analysis System of Shengyi Society, the domestic polyester staple fiber market has fluctuated and adjusted weakly since November. As of November 19th, the average price of 1.4D * 38mm in mainstream factories in Jiangsu and Zhejiang was 7226 yuan/ton, a decrease of 0.34% from the beginning of the month.

Due to weak cost adjustments, there is insufficient support for the cost of polyester staple fibers. The supply side and circulation of polyester staple fibers are relatively loose, and downstream demand is gradually weakening, resulting in low purchasing enthusiasm. The market has a strong negative sentiment, which has dragged down the price of polyester staple fibers.

Looking at the future, international crude oil prices on the cost side have declined. As of November 18th, the settlement price of the main contract for WTI crude oil futures in the United States was $69.17 per barrel, and the settlement price of the main contract for Brent crude oil futures was $73.30 per barrel. There is an expectation of further increase in PX supply in Asia, and the pressure on domestic PX inventory is rising. In recent years, negotiations for annual contracts have begun, and a cautious trading atmosphere is evident.

As of November 19th, the average market price of PTA in the East China region of China was 4797 yuan/ton, a decrease of 2.09% from the beginning of the month. PTA has started to accumulate inventory, and according to statistics, the current social inventory is around 4.01 million tons. Maintenance facilities have been restarted one after another, increasing expectations of loose supply. The current industry operating rate is around 85%.

As late November approaches, the demand in the textile industry is still in the traditional off-season, and yarn mills have reduced their rigid demand for polyester staple fibers. With the end of the shopping festival, the terminal textile industry focuses on the urgent need for e-commerce orders, the clearance of raw fabric inventory, and the procurement of raw materials. Most manufacturers have reported that the order volume this year is lower than in previous years, and there is some support for domestic demand for thermal insulation fabrics. Considering the subsequent tariff issues for foreign trade orders, some orders are issued in advance but can only be processed on an average basis. The comprehensive operating rate of chemical fiber weaving in Jiangsu and Zhejiang regions has slightly declined to 76%.

Business analysts believe that the cost driven market is bearish, coupled with the end of the peak consumption season, and the weakening of cost and supply and demand structure coexists. It is expected that the price of polyester staple fiber will continue to show a downward trend in the short term.

Aluminum prices fall

Aluminum prices remained strong in early November, showing a strong performance. Recently, aluminum prices have fallen significantly. According to the Commodity Market Analysis System of Shengyi Society, as of November 18, 2024, the average price of aluminum ingots in the East China market in China was 20526.67 yuan/ton, an increase of 5.49% from the market average price of 21720 yuan/ton on November 8.

The early rise in aluminum prices was mainly due to the upward shift of the cost center, which drove the rise of the industrial chain market. In particular, the price of raw material alumina has risen significantly, and the near end fundamentals are expected to be good, resulting in strong prices and causing aluminum prices to skyrocket. At present, the main reason for the decline in aluminum prices is due to fundamental considerations of supply and demand. After rising, prices have begun to make slight corrections.

The basic logic behind the short-term decline in domestic aluminum prices is as follows:

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, the new US president took office and the expectation of increased tax policies intensified. From a domestic perspective, these policies have all raised the overseas landing costs of exported products. The export demand of the aluminum industry chain is expected to weaken.

From the divergent price trends of Shanghai Aluminum and London Aluminum in Friday night trading, it also reflects the interpretation of policies by the two markets. Domestically, downstream aluminum exports are expected to weaken, suppressing raw material aluminum ingot prices. Overseas, the opposite is true. The expectation of rising import costs from China and the potential increase in localized demand have led to an upward trend in “bread” expectations and a improvement in local “flour” aluminum ingot prices.

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.

Although the fundamentals of alumina in the near end remain strong, with tight supply in the mining sector and short-term tightness in spot alumina, there is a dynamic expectation of weakening in the far end. From the recent weekly shipment data of Guinea, the bauxite shipment volume in Guinea has shown a significant rebound, and it is expected that the arrival volume in October and November will increase significantly. At present, domestic alumina enterprises mainly using imported minerals still have high operating rates, and the tight supply at the mining end has not brought the expected risk of production reduction. There is also an expected increase in domestic spot supply of alumina. A large alumina plant in Shandong has put into operation a 1 million ton production line this month, with an expected product release date of the end of October or early November. The production situation of new production capacity on the spot side of alumina may be mainly affected by the relocation of 2 million tons of production capacity by Weiqiao Group in the fourth quarter. It is expected that the first batch will be discharged in early November, and the second batch is highly likely to be discharged at the end of November or early December. There is also a production capacity of 2 million tons for Guangxi Huasheng Phase II, with the first batch expected to be put into operation by the end of December and the second batch expected to be put into operation by the end of January 2025.

Overall, in the short term, domestic aluminum prices are under pressure and are expected to decline, with weak fluctuations being the main trend.

According to the Commodity Market Analysis System of Shengyi Society, on the 15th, the mainstream polyester filament factories in Jiangsu and Zhejiang Province quoted POY (150D/48F) at 7000-7400 yuan/ton, polyester DTY (150D/48F low elasticity) at 8400-8900 yuan/ton, and polyester FDY (150D/96F) at 7500-7800 yuan/ton. In early October, driven by favorable costs, there was some upward trend, but downstream demand did not show significant improvement. The filament market was sluggish in the middle and late months, and the gains at the beginning of the month were gradually consumed. The polyester filament market was not prosperous during the peak season of September and October.

In terms of cost, in November, under the influence of international oil prices, some polyester companies gradually opened up prices and began to slightly reduce prices last weekend. Although the price reduction is not significant, it may become the beginning of the original trend for a period of time in the future.

In terms of supply and demand, after entering November, due to the influence of temperature factors, the order situation did not show a significant decline. Overall, downstream still has strong support for polyester filament, but weaving enterprises still hold a cautious attitude towards raw material procurement. The market has a strong wait-and-see sentiment, with few spot transactions and light production and sales of polyester filament.

From the perspective of foreign trade export data, in October, China’s textile and clothing exports reached 25.48 billion US dollars, a year-on-year increase of 11.9%. Among them, textile exports amounted to 12.39 billion US dollars, a year-on-year increase of 16.1%; Clothing exports amounted to 13.09 billion US dollars, a year-on-year increase of 8.1%. There has been a significant increase in exports to the United States, including market forecasts for the outcome of the US election. These demands will provide support for polyester raw materials in the short term.

There is a strong wait-and-see sentiment in the market, with few spot transactions and light production and sales of polyester filament. The average production and sales of polyester are 34.3%.