Aluminum prices are rising

Aluminum prices rose on May 22nd. According to the Commodity Market Analysis System of Business Society, the average price of domestic aluminum ingots in the East China market on May 17, 2024 was 21156.67 yuan/ton, a daily increase of 1.89%, up 3% from the market average price of 20540 yuan/ton at the beginning of the month (May 1).

Rising prices of raw alumina

Affected by the news that Rio Tinto Group has announced that its Australian Yarwun smelters and Queensland Alumina Limited have experienced force majeure in alumina shipments, with prices skyrocketing due to shortages in natural gas inventory/supply for power generation, domestic raw material alumina prices have remained strong.

The rapid increase in alumina prices has provided strong cost support for aluminum ingot prices.

Aluminum prices tend to fluctuate strongly in the future market

At present, there is not much explicit inventory of aluminum ingots in China, and the post holiday inventory situation is better than market expectations. There is expected to be an increase in supply, but due to the relatively high domestic aluminum prices and the closure of the import window, The surge in LME inventory has little impact on the domestic market. The inventory of aluminum ingots and rods in mainstream consumer areas has been slightly depleted, with good consumption expectations and a relatively balanced supply and demand in the short term; The cost side has recently received strong support, and the demand side is expected to improve. In the short term, it is expected that the market will experience strong fluctuations and operations.

The domestic MTBE market has experienced a narrow decline. From May 13th to 21st, the price of MTBE dropped from 6975 yuan/ton to 6825 yuan/ton, with a price drop of 2.15% during the cycle, a month on month decrease of 9.75%, and a year-on-year decrease of 9.00%. The domestic MTBE market continues to be weak and the decline has intensified. The international crude oil trend is weak, and the downstream gasoline market demand is not good. Operators are more resistant to high priced gasoline raw materials, and MTBE factory shipments are hindered. At the same time, with the resumption of work of some heterogeneous units due to shutdown, MTBE resource supply continues to increase. Under the imbalance of supply and demand, the decline of MTBE is more obvious.

On the cost side, international crude oil: The overall narrow decline in international oil prices is mainly due to the positive progress in the ceasefire negotiations between Palestine and Israel, the easing of geopolitical tensions, and the still bearish outlook for global demand. As of May 10th, the settlement price of Brent crude oil futures main contract was $82.79 per barrel, a decrease of $1.09 or 1.3%.

On the demand side, international crude oil prices have fluctuated downward, and the market for refined oil products is weak and difficult to improve. The main reason is that the current performance of terminal demand is insufficient, social unit inventory needs to be further digested, downstream users purchase on demand, and market transactions are mainly small orders. Short term MTBE demand is influenced by bearish factors.

Supply side: The overall output has decreased. Next week, there may be an increase in production. Short term domestic MTBE supply is affected by bearish factors.

As of the close on May 20th, the closing price of the Asian MTBE market has increased by $10/ton compared to the previous trading day, with FOB Singapore closing at $895.99-897.99/ton. The closing price of the European MTBE market decreased by $2.25 per ton compared to the previous trading day, while the FOB ARA closed at $993.74-994.24 per ton. The closing price of the US MTBE market has decreased by $12.17 per ton compared to the previous trading day, while the FOB Gulf offshore price closed at $965.56-965.91 per ton (271.99-272.09 cents per gallon).

According to future predictions, the overall operating rate of the equipment is currently high, and the situation of abundant domestic resource supply continues. The expectation for a new round of retail price restrictions on gasoline has been lowered, and there is currently no holiday travel to boost demand for MTBE. Business Society MTBE analysts believe that the domestic MTBE market may continue to be weak in the short term.

According to the Commodity Market Analysis System of Business Society, from May 6th to 20th (as of 3:00 pm), the average price of methanol in the domestic methanol market in East China ports increased from 2635 yuan/ton to 3020 yuan/ton, with a price increase of 14.57% during the cycle and a year-on-year increase of 32.31%. After the holiday, some methanol units in the main production areas were repaired as scheduled, and some units unexpectedly shut down, resulting in overall tight supply and driving the mainland market to rise. In mid month, the situation abroad was unstable, and the arrival volume of methanol at ports was affected. The inventory in ports and mainland China was relatively low, and downstream procurement was still in demand. The tight supply situation led to a significant increase in the methanol market.

As of the close of May 20th, the closing price of methanol futures on the Zhengzhou Commodity Exchange has risen. The main contract of methanol futures, 2409, opened at 2658 yuan/ton, with a highest price of 2693 yuan/ton and a lowest price of 2645 yuan/ton. It closed at 2664 yuan/ton at the end of the day, up 32% or 1.22% from the previous trading day’s settlement. The trading volume was 1173436 lots, and the position was 1079123 lots, with a daily increase of 12011.

Summary of methanol market prices in various regions as of May 20th:

Region/ price

Shanxi region/ 2460-2480 yuan/ton factory withdrawal foreign exchange

The central region of Shandong/ 2580-2620 yuan/ton

Anhui region/ 2660-2670 yuan/ton

Henan region/ 2520 yuan/ton factory withdrawal foreign exchange

On the cost side, the available resources at ports are gradually decreasing, especially due to the tight supply of some high-quality chemical coal. In addition, the market still has expectations for the upcoming peak season, and traders have a strong sentiment of price support. In mid month, most coal mines maintained normal production status, mainly focusing on fulfilling long-term agreements, and the coal supply was relatively stable. With the rise in temperature and the demand for electricity, downstream power plants may gradually replenish their warehouses, providing some support for coal prices. The cost of methanol is influenced by favorable factors.

On the demand side, downstream formaldehyde: the Lianyi formaldehyde plant has increased its load, the Liuyang Jinggang plant has restarted, and the demand for formaldehyde has increased; Downstream Dimethyl Ether: The plan for the start-up of Xinxiang Xinlian Xincun device may increase the demand for Dimethyl Ether; Downstream chlorides: The Guangxi Jinyi plant is operating at a reduced capacity, and the expected storage and operation of the East China plant have led to an increase in demand for chlorides; Downstream MTBE: Qixiang Tengda’s maintenance plan reduces MTBE demand; Downstream acetic acid: Seranis and Henan Shunda are expected to undergo maintenance, resulting in reduced demand for acetic acid. The impact of methanol demand is mixed.

On the supply side, many devices undergo maintenance or production reduction; At the same time, many devices have been restored. The loss is greater than the recovery, resulting in a decrease in capacity utilization. The supply side of methanol is influenced by favorable factors.

In terms of external market, in April 2024, China’s methanol import volume was 1.0952 million tons, a month on month increase of 35.12%, and the average import price was 304.19 US dollars/ton, a month on month increase of 1.23%. The largest import volume from the United Arab Emirates is 341100 tons, with an average import price of 303.67 US dollars per ton. The cumulative import volume of methanol in China from January to April 2024 was 4.1817 million tons, a year-on-year increase of 5.61%.

In April 2024, China’s methanol export volume was 3300 tons, with little change compared to the previous month. The average export price was 776.12 US dollars per ton, an increase of 45.08% compared to the previous month. The cumulative export volume of methanol from China from January to April 2024 was 11300 tons, a year-on-year decrease of 27.56%.

As of the close on May 17th, the CFR Southeast Asian methanol market closed at $369.00-370.00 per ton, up $1 per ton. The closing price of methanol in the US Gulf methanol market is 92.00-93.00 cents per gallon; The closing price of the FOB Rotterdam methanol market was 300.75-301.75 euros/ton, a decrease of 1.75 euros/ton.

In the future, it is predicted that the arrival situation at the port may ease, some devices are planned to restart, supply side performance may increase, some MTO companies plan maintenance, and the demand side is weak. The methanol analyst from Business Society predicts that the domestic methanol market will mainly consolidate in the short term.

Stable operation of ethylene oxide prices in May 2024

This week, the price of ethylene oxide has slightly decreased, with a magnitude of 100 yuan/ton. According to data from Business Society, as of May 17th, the average price of ethylene oxide in the domestic market was 6900 yuan/ton, a decrease of 1.43% from last week’s average price of 7000 yuan/ton; Compared to the beginning of the year, the average market price was 6400 yuan/ton, an increase of 7.81%.

Loose prices of some downstream products

At present, the industrial chain is in a state of poor cost oriented transmission. After the upstream raw material ethylene price rose, it remained at a relatively high level, but some downstream product prices slightly fell. Coupled with the main downstream polycarboxylate water reducing agent monomer prices remaining stable, the demand for ethylene oxide is generally supported.

Fallback logic

The early maintenance equipment has started to resume production, and there has been a slight increase in supply pressure. Coupled with the unsatisfactory transmission of downstream product prices, the price of ethylene oxide has begun to decline. However, the cost support brought by the raw material side remains, and it is expected that there is not much room for price decline in the short term, with short-term fluctuations being mainly weak.

Domestic cobalt prices are rising

According to the cobalt market analysis system of Business Society, the cobalt price on May 16th was 215900 yuan/ton, an increase of 2.42% compared to the cobalt price on May 14th, which was 210800 yuan/ton; The price of cobalt fluctuated and increased by 2.18% compared to May 9th at 211300 yuan/ton. Stimulated by storage news, cost support still exists, demand rebounds, and cobalt prices rebound and rise.

Demand support recovery

The Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, and the National Energy Administration jointly organized the 2024 New Energy Vehicles Going to the Countryside Campaign. From May to December 2024, support policies such as exchanging old cars for new ones and filling gaps in county-level charging and swapping facilities will be implemented to directly reach consumers with “real gold and silver” discounts. The sales of new energy vehicles are expected to increase, and the demand for cobalt in the market is expected to rise. In addition, the news of storage and recovery has stimulated confidence in the cobalt market, leading to a rebound in cobalt prices.

The price of MB cobalt is weak and stabilizing

According to the trend chart of MB cobalt prices, it can be seen that in May, the price of MB cobalt weakened and stabilized, with standard grade cobalt prices slightly falling and alloy grade cobalt rising first and then falling. The decline in international cobalt prices has slowed down.

Overview and Outlook

According to data analysts from Business Society, cost support is limited, and the news of collection and storage is stimulating. In addition, the domestic demand for new energy vehicles going to rural areas has rebounded in the domestic cobalt market. Positive demand stimulates expectations for an increase in cobalt prices in the future.