According to the Commodity Market Analysis System of Business Society, the domestic lead ingot market experienced a volatile trend in May 2023, with prices slightly decreasing. The average price in the domestic market was 15210 yuan/ton at the beginning of the month and 15120 yuan/ton at the end of the month, with a monthly decrease of 0.59%.

 

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On May 29th, the lead commodity index was 92.20, unchanged from yesterday, down 31.20% from the cycle’s highest point of 134.01 (2016-11-29), and up 23.54% from the lowest point of 74.63 on March 19th, 2015. (Note: The cycle refers to the period from September 1st, 2011 to the present).

 

On May 29th, the base metal index stood at 1163 points, an increase of 13 points from yesterday, a decrease of 28.03% from the cycle’s highest point of 1616 points (2022-03-09), and an increase of 81.15% from the lowest point of 642 points on November 24, 2015. (Note: The cycle refers to the period from December 1st, 2011 to the present).

 

The K-bar chart of commodity prices uses the concept of a price trend K-line to reflect weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell investments based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations. After the decline in lead prices in January 2023, the trend has been fluctuating in the past three months, with a mixed weekly trend.

 

In May 2023, the trend of the lead ingot market was volatile, with an overall trend of first falling, then rising, and then falling. The monthly fluctuations were not significant, basically continuing the trend of the first three months, and the off-season trend was relatively strong. The price fluctuation range is between 15110 to 15290 yuan/ton, with a monthly decrease of 0.59%. The recent changes in the supply and demand side are limited, and the overall market atmosphere remains low in the off-season. The supply performance is decent, and social inventory has also increased to some extent. In terms of demand, the downstream battery industry is generally in the off-season of the industry, with poor performance in the end consumer market. Some small storage companies have recently experienced significant pressure on finished products, high inventory, and a high demand for raw material procurement, with limited demand for lead ingot restocking. Overall, there has been a slight increase in market supply after the holiday, while demand remains weak. In the future, the business community predicts that the trend will remain weak and volatile in the short term, with limited market volatility in the off-season. We will pay attention to the impact of macro level news on the market in the future.

 

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Related data:

May 26, 2023 London Metal Exchange (LME) lead inventory temporarily stabilized at 35475 tons

 

According to the statistics of the China Association of Automobile Manufacturers, in April 2023, the production and sales of automobiles were 2.133 million and 2.159 million, respectively, with year-on-year growth of 76.8% and 82.7%. From January to April, the production and sales of automobiles reached 8.355 million and 8.235 million respectively, with year-on-year growth of 8.6% and 7.1%, respectively.

 

From 2012 to 2022, there has been a significant increase in China’s lead production in the past decade, especially since 2015. The latest data from the National Bureau of Statistics shows that China’s lead production in April 2023 was 614000 tons, a year-on-year increase of 3.9% and a month on month decrease of 19.53%.

The latest report released by the World Bureau of Metals Statistics (WBMS) shows that in March 2023, global refined lead production was 1.3525 million tons, consumption was 1.3925 million tons, and there was a supply shortage of 40000 tons. The global lead ore production in March 2023 was 569300 tons.

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According to the monitoring of the Commodity Market Analysis System of the Business Society, the East China region’s 1 # tin ingot market fluctuated and rose this week (5.19-5.26). On May 26th, the average market price was 199310 yuan/ton, and on May 19th, the average market price was 196110 yuan/ton, a weekly increase of 1.63%.

 

ferric sulfate (Poly ferric sulphate)

The K-bar chart of commodity prices uses the concept of a price trend K-line to reflect weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell investments based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations. From the monthly K-bar chart, it can be seen that after November 2022, tin prices have risen continuously for three months due to macroeconomic factors, and have fallen by 11.35% in a single month since February 2023. From the weekly K-bar chart, it can be seen that the overall trend of the tin ingot market is weak, with a narrow weekly increase after four consecutive weeks of decline.

 

The futures market experienced a volatile trend in the early part of this week, following the overall market fluctuations. By the night of the 24th, non-ferrous metals had generally declined, with only the Shanghai Tin Index rising 0.13%. By the end of the 25th, the main 2306 contract of Shanghai Tin Index closed at 196980 yuan/ton, with a closing price increase of 2.17%. On the 24th, the ITA International Tin Association stated that the Ministry of Finance of the Wa State in Myanmar issued a notice on May 20, 2023, regarding the implementation of the “suspension of all mineral resource mining”. The policy of ceasing all exploration, mining, processing and other operations in mines after August 1, 2023 will be implemented. After this news was released, the market raised concerns about tin ore supply in the future, and the futures market rose. However, the recent market atmosphere has been generally negative, and demand expectations have been generally weak, resulting in limited overall market growth. From the perspective of supply and demand, there have been limited changes this week, and manufacturers still have a strong mentality of price competition. The supply at the mining end is tight but has not improved yet, and refineries have a strong reluctance to sell. The changes on the demand side are limited, and the demand is still weak. However, the recent significant rise in the semiconductor industry has given the market a certain boost. In terms of inventory, there has been a significant decline in social inventory this week, and trading has been relatively positive this week, boosted by news from Wa State. Overall, the pattern of weak downstream actual demand continues, and the impact of supply and demand on tin prices is relatively weak.

 

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On May 26, 2023, the London Metal Exchange (LME) tin storage increased by 35 tons from 1925 tons

 

On May 28th, the base metal index stood at 1150 points, unchanged from yesterday, a decrease of 28.84% from the cycle’s highest point of 1616 points (2022-03-09), and an increase of 79.13% from the lowest point of 642 points on November 24, 2015. (Note: The cycle refers to the period from December 1st, 2011 to the present).

 

According to the price monitoring of Business Society, in the 21st week of 2023 (5.22-5.26), there were a total of 11 commodities in the non-ferrous sector that rose month on month in the list of commodity prices. Among them, there were 2 commodities that increased by more than 5%, accounting for 8.7% of the monitored commodities in this sector; The top three commodities with the highest increase were neodymium oxide (5.41%), metallic praseodymium (5.04%), and praseodymium oxide (4.30%). There are 9 products that have decreased month on month, and 2 products that have decreased by more than 5%, accounting for 8.7% of the monitored products in this sector; Top 3 products in decline

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1、 Price trend

 

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According to the monitoring of the commodity market analysis system of the Business Society, the SG5 PVC carbide method fell this week. On Monday, the average domestic PVC price was 5612 yuan/ton, and on Friday, the average price was 5530 yuan/ton. The price fell by 1.46% during the week.

 

2、 Market analysis

 

The price of PVC in the domestic spot market continued to fall this week. Overall, the overall trading atmosphere in the spot market is light, and downstream procurement is lukewarm and not hot. Inquiries and procurement enthusiasm are not good, and actual transactions are cautious and more wait-and-see. As of now, the quotation range for PVC5 carbide materials in China is mostly around 5250-6170 yuan/ton.

 

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In terms of crude oil, on May 25th, international crude oil futures fell. The settlement price of the main contract for WTI crude oil futures in the United States was $71.83 per barrel, a decrease of $2.51 or 3.4%. The settlement price of the main contract for Brent crude oil futures was $76.18 per barrel, a decrease of $2.18 or 2.9%. The expectation of further production cuts by OPEC+in oil producing countries has weakened, putting pressure on oil prices.

 

In terms of calcium carbide, according to data monitored by the Business Society, the factory price of calcium carbide in the northwest region has temporarily stabilized this week. The average ex factory price of mainstream calcium carbide manufacturers in northwest China this week is 3183.33 yuan/ton. The upstream price of blue charcoal has stabilized at a high level, with good cost support. The downstream PVC market has slightly declined, and the demand for calcium carbide has weakened.

 

3、 Future Market Forecast

 

PVC analysts from Business Society believe that PVC spot prices will continue to decline this week. At present, the demand for PVC spot market is still weak. Downstream and traders are mostly wait-and-see oriented, with poor market confidence and average trading atmosphere. It is expected that the PVC market will be weak in the short term and closely monitor changes in the news.

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According to the data monitored by the business community, the price of carbon black in the downstream market has also risen recently, driven by the rising price of raw material coal tar. On May 24, the domestic carbon black N220 was quoted at 8233 yuan/ton.

 

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Cost side: Recently, the raw material coal tar market has been operating stably, with good support for carbon black cost side. The prices of coal tar pitch and anthracene oil in the downstream have both risen significantly, driving up the market price of coal tar. Driven by the rising price of raw materials, the market price of carbon black has also risen.

 

Supply and demand side: Currently, carbon black manufacturers have produced carbon black from high priced raw materials in the early stage, and there is a buildup of inventory on site. Some carbon black enterprises have arranged for a slight reduction in their inventory, while most carbon black enterprises maintain normal operating levels. Downstream market procurement is cautious, with most of them focusing on hard demand.

 

In terms of downstream tire companies and other rubber product industries, the overall operating rate remains stable, finished product inventory is at a reasonable level, there is a strong wait-and-see atmosphere, and transactions in the carbon black market are relatively weak.

 

On the whole, the raw material coal tar market is operating stably, and the cost side has some support, but the downstream demand has not improved significantly, and there is no positive phenomenon in the field. It is comprehensively expected that carbon black will maintain stable operation in the short term.

 

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According to the Commodity Market Analysis System of the Business Society, the PP market continued to decline last week, with overall reductions in various wire drawing brands. As of May 22nd, the mainstream quoted price of T30S (wire drawing) by domestic producers and traders is around 7142.86 yuan/ton, with a decrease of -7.32% compared to the average price level at the beginning of the month.

 

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Cause analysis

 

Industry chain: On the upstream side, the recent low point recovery in the Shandong propylene market has been slight. In the early stage, crude oil continued to weaken and rebounded last week, directly benefiting the spot price of propylene on the cost side. Downstream devices are operating and maintaining, with limited procurement volume, and the export pressure of propylene enterprises remains unchanged. The current market wait-and-see atmosphere is still strong, and it is expected that the Shandong propylene market will be mainly organized and operated. It is recommended to closely monitor the cost side news.

 

The narrow rebound in propylene prices does not significantly improve the cost support for PP. In terms of industry load, the overall industry load remained at around 75% last week, and recent shipments have remained generally stable with expectations of an increase in supply. There is sufficient supply of goods on the market, and inventory pressure has increased, with poor support from the supply side for spot prices. Meanwhile, the continued decline in futures dragged down the spot market. In terms of demand, the downstream plastic weaving production of the main force has slightly declined, and the operating rate of film material enterprises has recovered to 40%. The stocking situation of terminal enterprises is poor, and procurement is mainly maintained for production.

 

In terms of fiber materials, according to the Commodity Market Analysis System of Business Society, as of May 22, the spot price of domestic fiber PP has declined. The mainstream quoted price of domestic producers and traders for Z30S (fiber) is around 7287.50 yuan/ton, with an increase or decrease of -5.36% compared to the average price at the beginning of the month, and a decrease of 17.96% compared to the same period last year. Last week, the low load of downstream non-woven fabric enterprises, the main force of PP fiber material, continued horizontally, with an overall operating rate of around 30%. The current weak demand for fiber materials on the site is dragging down the digestion speed of non-woven end products, and the enterprise’s efforts to replenish fiber PP are lagging behind. In addition, the supply side’s bearish situation is expected to remain weak and stable in the short term.

 

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In terms of melt blown materials, last week’s melt blown PP market saw a narrow decline. As of May 22nd, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of the Business Society is around 8125 yuan/ton. Compared with the average price level at the beginning of the month, the price has increased or decreased by -0.91%, with a year-on-year decrease of 17.42%. At present, the domestic health events are stabilizing, and local news in society is unable to drive the consumption of medical meltblown fabric materials. The overseas demand has also not shown significant support, and traders have given up on orders, indicating that the melt blown material market may maintain a weak consolidation trend.

 

Future Market Forecast

 

PP analysts from Business Society believe that the polypropylene market has recently declined. The raw material propylene market is generally stable at a low level, with poor support from the cost side for the market. Terminal enterprises tend to maintain production while receiving goods, with weak demand release. The market is biased towards bearish guidance, and it is expected that the PP market may maintain a weak consolidation trend in the short term.

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According to the price monitoring data of Business Society, as of May 18, 2023, the reference price of domestic n-propanol was 7700 yuan/ton. Compared with May 12, 2023 (the reference price of n-propanol was 7866 yuan/ton), the price was reduced by 166 yuan/ton, a decrease of 2.12%.

 

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From the data monitoring chart of the Business Society, it can be seen that this week (5.12-5.19), the domestic n-propanol market as a whole showed a weak decline. This week, the overall market situation of n-propanol in Shandong Province showed a downward trend. Some n-propanol suppliers adjusted the price of n-propanol downward by 200-300 yuan/ton. At present, the difference between high and low prices in the market of n-propanol in Shandong Province has widened. As of May 18, the market price of n-propanol in Shandong Province in China was around 7000-7800 yuan/ton. The market of n-propanol in Nanjing in China is still operating stably. Distributors in different regions still have reservations about prices, and the difficulty in monitoring prices may lead to differences in specific negotiation situations. Each region also has differences, and actual negotiations are the main focus.

 

Prediction of the Future Market Trend of n-propanol

 

At present, the trading atmosphere in the domestic n-propanol market is mild. The downstream market of n-propanol mainly purchases according to volume, and new orders are generally traded. The n-propanol data analyst of the Business Society believes that in the short term, the domestic n-propanol market is mainly adjusted and operated in multiple intervals, and the specific trend still needs to pay more attention to changes in supply and demand news.

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1、 Trend analysis

 

Azodicarbonamide (AC foaming Agent)

According to the monitoring of nickel prices by the Business Society, nickel prices have slightly declined this week. As of May 12th, the spot nickel quotation was 177350 yuan/ton, a decrease of 8% from the beginning of the week and a year-on-year decrease of 18.37%.

 

Nickel weekly rise and fall chart

 

According to the weekly rise and fall chart of Business Society, nickel prices have risen by 5 and fallen by 7 in the past 12 weeks, with a weak decline in nickel prices recently.

 

Nickel industry chain

 

LME nickel inventory

 

On a macro level, the International Monetary Fund has stated that if the United States defaults on its debt, it will have a very serious negative impact on the US and global economy. Biden was originally scheduled to postpone negotiations on the debt ceiling with House Speaker McCarthy on Friday until next week. Federal Reserve hawkish official Kalikash stated that despite a short-term slowdown, inflation remains too high, and the Federal Reserve will have to maintain a tightening monetary policy for a longer period of time. The Bank of England announced a 25 basis point increase in its benchmark interest rate to 4.5% and stated that further tightening of monetary policy is necessary if there is more holding pressure on inflation.

 

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In terms of supply: Recently, the Russian Nickel Association has been receiving goods one after another, and coupled with an increase in the output of domestic electrowinning nickel projects, the global low inventory pattern of pure nickel may be difficult to continue. In terms of secondary nickel, Indonesia’s newly invested production capacity has been released, and nickel iron continues to flow back, thus impacting the domestic market.

 

In terms of demand: The weak real estate sector has led to a decrease in stainless steel production. The demand for new energy vehicles also fell short of expectations. Although the production and sales of new energy vehicles in China still maintain year-on-year growth, the production capacity of battery grade nickel sulfate has shown signs of excess. In addition, the relative advantage of lithium iron phosphate battery in price has reduced the demand for nickel.

 

In summary, macro data performance is poor, with fundamental nickel prices plummeting but downstream consumption not actively purchasing on dips. The increase in nickel element supply is exerting significant pressure on nickel prices, and it is expected that nickel prices will remain weak in the short term.

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Overview of 441 # Silicon Price Trends

 

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Silicon metal prices continued to decline this week, with high inventory and sluggish demand still being important factors constraining prices. At the same time, the rebound in precipitation in the southwest region and the expected increase in resumption of production are also factors contributing to the downward trend of the spot market. According to the Commodity Market Analysis System of Business Society, as of May 15th, the average price of 441 # metal silicon spot market in China was 15460 yuan/ton, a decrease of -3.25% on a weekly basis. The futures market fell by -7.06% throughout the week, closing at 14150 yuan/ton.

 

The prices of 441 # silicon in various regions on the 15th are as follows:

 

The price range of # 441 metal silicon in the Huangpu Port area is 15400-15500 yuan/ton, with an average price of 15450 yuan/ton; The price range of # 441 metal silicon in Tianjin Port area is 15100-15400 yuan/ton, with an average price of 15250 yuan/ton; The price range of # 441 metal silicon in Kunming region is 15400-15500 yuan/ton, with an average of 15450 yuan/ton; The price range of # 441 metallic silicon in Sichuan region is 15300-15400 yuan/ton, with an average of 15350 yuan/ton; The price range of Shanghai # 441 metal silicon is 15700-15900 yuan/ton, with an average price of 15800 yuan/ton.

 

Factors Influencing the Price of Silicon Metal

On the supply side:

This week, the overall number of silicon metal furnaces was 283. As of May 12th, the silicon metal furnace rate was around 39.42%, with 144 furnaces in Xinjiang, 28 furnaces in Sichuan, and 24 furnaces in Yunnan. Under the current price, the pressure of losses for silicon factories continues to increase, and the supply in the northwest has slightly contracted. The precipitation in the southwest has rebounded, and the number of furnaces in Sichuan has started to increase, while there is currently no intention of opening furnaces in Yunnan.

 

In terms of demand:

 

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This week, the domestic polycrystalline silicon continued its downward trend, with a significant decline in the market after the holiday. The domestic supply prices generally decreased by around 10000 to 15000 yuan/ton, and the mainstream range of single crystal density for models of primary solar energy has reached 145000 to 165000 yuan/ton. Polycrystalline silicon enterprises have a relatively high level of operation, with most manufacturers maintaining normal operation and ample supply performance, with good demand for metallic silicon.

 

The price of aluminum alloy ADC12 decreased by 200 yuan/ton compared to the beginning of the month, with a mainstream quotation of 18200 yuan/ton. The profit compression of aluminum alloy enterprises is significant, and the overall operating rate has declined.

 

The reference price of domestic silicone DMC market is 14500 yuan/ton. The overall atmosphere of the organic silicon DMC market has not improved well, and downstream demand is cautious, with demand support still being mainly loose. There has been little change in the construction of organic silicon DMC, and there is still some pressure on the supply side in some regions.

 

Future Market Forecast

 

Overall, downstream demand has not improved and there is a significant pressure to remove inventory. Currently, the overall supply of metallic silicon continues to exceed demand. At present, production costs in the southern region have decreased, and there is an expectation of resuming production and supply. It is expected that metal silicon will still have a weak downward trend in the short term.

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According to the Commodity Market Analysis System of Business Society, from May 6 to May 12, 2023, the bidding price of crude benzene increased narrowly, from 5671.25 yuan/ton last weekend to 5703.75 yuan/ton this weekend, with a weekly increase of 0.57%.

 

Azodicarbonamide (AC foaming Agent)

In terms of crude oil, international crude oil futures continued to decline on May 11th. The settlement price of the main contract for WTI crude oil futures in the United States was $70.87 per barrel, a decrease of $1.69 or 2.3%. The settlement price of the main contract for Brent crude oil futures was $74.98 per barrel, a decrease of $1.43 or 1.9%. The debt ceiling impasse in the United States has intensified the fear of economic recession, and the increase in the number of Americans who apply for unemployment benefits roughly has put pressure on the oil market.

 

The factory price of Sinopec pure benzene decreased by 250 yuan/ton on May 8, 2023, and is currently at 7050 yuan/ton.

 

Other companies: Jingbo Petrochemical quoted 7170 yuan/ton, HSBC Petrochemical quoted 7200 yuan/ton, Weilian Chemical quoted 7153 yuan/ton, Xinhai Petrochemical quoted 7150 yuan/ton, and Hongrun Petrochemical quoted 7200 yuan/ton.

 

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The K-bar chart of commodity prices uses the concept of a price trend K-line to reflect weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell investments based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations. The weekly K-bar chart of pure benzene shows that the pure benzene market has experienced a decline in recent times, with a continuous decline for four weeks.

 

In terms of industrial chain: This week, the crude oil market rose first and then fell, and overall declined. The downstream styrene market continued to decline, dragging down the external market of pure benzene. The pure benzene market overall declined this week, and there were rumors that Sinopec’s listed price had a downward expectation, which once again affected the market mentality. After the hydrogenation benzene festival, it followed the overall downward trend of pure benzene, and the current factory price in the main production area is around 6900-7050 yuan/ton.

 

The crude benzene market has performed differently this week. The Shandong region did not make any adjustments this week, but still implemented post holiday prices. The Shanxi region saw a slight increase in prices, and other price adjustment regions also had limited changes. On the supply side, coking enterprises have slightly declined in production this week, but overall they are still operating in the range of over 75%, and the supply of crude benzene is still relatively loose. In terms of demand, downstream hydrogenation benzene enterprises have slightly declined in construction this week, and under the influence of recent poor market performance, some enterprises have production reduction and maintenance plans in the future, and market demand is expected to decline in the future. Overall, the recent decline in crude oil has led to a narrow decline in the price of pure benzene due to the drag. Downstream demand is expected to be weak, and in the future, the business community predicts that the price of crude benzene will be mainly stable, moderate, and weak, with room for decline.

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Gold prices hit a new 10-year high

 

Gold prices hit a new 10-year high. According to the commodity market analysis system of the business community, the spot market price of gold will be 452.75 yuan/g on May 5, 2023, 1.81% higher than the average price of the spot market before the festival, and 3.03% higher than the beginning of last month (April 1).

 

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Silver rose 4.58% after the holiday, up 42.49% from its low point in the past year

 

According to the commodity market analysis system of the business community, the average price of silver in the market will be 5839.33 yuan/kg on May 5, 2023, 4.58% higher than the average price of spot market before the festival, 10.18% higher than the beginning of last month (April 1), and 9.25% higher than the average price of spot market at the beginning of the year (January 1). The low point in the past year appeared on July 18, 2022, and the current price has increased by 42.49% compared to the low point.

 

Summary of Price Trends of Precious Metals and Crude Oil

 

In the early stage, the correlation between precious metals and crude oil trends is strong. After the second half of 2022, precious metal prices have bottomed out and stabilized, and the magnitude of macro factors affecting them has begun to show differentiation. The trend of precious metals and crude oil began to converge in late March, but after mid April, the trend began to diverge again. Mainly due to the increased impact of risk aversion on the rise of precious metal prices.

 

Comparison of precious metal gold and silver price trends in the past year

 

In 2022, the rise and fall trends of precious metal gold and silver have converged, but the decline in silver was deeper from April to August, and the recent recovery has been more significant. In December, silver continued its strong trend last month, and gold began to consolidate at high levels. In 2023, precious metal gold and silver have consolidated at high levels, with a slight decline in February. Since March, precious metal prices have started to rise.

 

Policy logic

 

The Federal Reserve raised interest rates by 25BP in May, and Powell’s comments on further interest rate policy were dove like, leading to expectations of easing monetary policy tightening in the future. The end of the bearish period is a positive one; Coupled with the renewed concern over the US banking crisis during holidays, concerns about regional banks and debt ceilings in the US have led to an increase in market risk aversion, and precious metal prices have once again reached new highs. Overall, the short-term interest rate hike cycle is still ongoing, and the upward space for precious metals has always been constrained before the expected rate hike is falsified. The pullback in precious metal prices on Friday night trading was mainly due to stronger than expected US employment data, with non farm employment data showing that US employers increased their recruitment and wages in April. This has cooled market expectations for the Federal Reserve’s interest rate cut. Although Friday’s employment data will not lead to the Federal Reserve raising interest rates in June, it is enough to calm those who are eager for the Fed to cut rates soon. The longer US interest rates remain high, the more pressure they put on non interest bearing gold.

 

Fundamental logic

 

1. Domestic consumption of precious metals has improved

 

According to the latest statistics from the China Gold Association, the national gold consumption in the first quarter of 2023 was 291.58 tons, an increase of 12.03% compared to the same period in 2022.

 

Among them: 189.61 tons of gold jewelry, a year-on-year increase of 12.29%; 83.87 tons of gold bars and coins, a year-on-year increase of 20.47%; Industrial and other gold consumption reached 18.10 tons, a year-on-year decrease of 16.90%.

 

2. Strong demand for central bank purchases

 

The global central bank’s gold purchase volume reached a record high of 1136 tons in 2022, and this trend is still continuing in 2023. In the first quarter of 2023, global central banks maintained net purchases of gold, with central banks and other institutions purchasing 228 tons of gold in the first quarter, a year-on-year increase of 176%. Among them, the Singapore Monetary Authority purchased 51.8 tons of gold in the first two months of this year; The People’s Bank of China has increased its holdings of gold for five consecutive months. The People’s Bank of China increased its holdings of gold for five consecutive months from November 2022 to March 2023, with a total increase of 57.85 tons in the first quarter. By the end of March, China’s gold reserve had reached 2068.38 tons.

 

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3. Year-on-year growth in domestic supply

 

In the first quarter of 2023, the domestic raw material gold production was 84.972 tons, an increase of 1.571 tons compared to the same period in 2022, a year-on-year increase of 1.88%. Among them, 66.506 tons of gold from gold minerals and 18.466 tons of non ferrous byproducts were produced. Among them, large gold enterprises (groups) produce 32.717 tons of mineral gold in their mines, accounting for 49.19% of the national total. Overseas mines such as Zijin Mining, Shandong Gold, and Chifeng Gold achieved a mineral gold output of 14.395 tons, a year-on-year increase of 29.17%.

 

In addition, in the first quarter of 2023, the production of imported raw materials was 29.901 tons, a year-on-year increase of 24.41%. If this part of the imported raw material production was added, a total of 114.873 tons of gold were produced nationwide, a year-on-year increase of 6.92%.

 

Increased probability of high consolidation of precious metals

 

At present, the price of precious metals has reached a new decade high. In the early stage, we expected that under the high inflation and high interest rate hikes, the pace of overseas economic recession may lead to relatively full risk aversion, which has been basically reflected in the price. Some central banks around the world increased their holdings of gold reserve, which also formed some support for gold prices.

 

However, the economic vitality demonstrated by domestic consumption during the May holiday, coupled with China’s first quarter economic data growth of 4.5%, partially alleviated concerns about a global economic recession. Coupled with the high interest rate state of the Federal Reserve, this has to some extent suppressed the prices of non bearing asset precious metals.

 

It is expected that precious metal prices may experience weak upward trend in the short term, with high volatility and consolidation being the main trend, while they remain bullish in the medium to long term.

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According to the commodity market analysis system of the business community, the price index of the rare earth market fell sharply in April, and the trend of the domestic rare earth market declined. On April 27, the commodity price index BPI was 967 points, down 24 points from the first day, down 28.00% from the cycle’s highest point of 1343 points (2021-10-19), and up 46.52% from the lowest point of 660 points on February 3, 2016. (Note: The cycle refers to the period from December 1st, 2011 to the present).

 

The prices of neodymium oxide, metallic neodymium, praseodymium oxide, metallic praseodymium praseodymium neodymium oxide, and metallic praseodymium neodymium in China have significantly decreased. As of the 28th, the price of metallic praseodymium neodymium was 540000 yuan/ton, and the price decreased by 13.94% in April; The price of praseodymium neodymium oxide was 435000 yuan/ton, which decreased by 16.75% in April; The price of neodymium oxide was 455000 yuan/ton, with a decrease of 18.02% in April; The price of neodymium metal was 600000 yuan/ton, and the price decreased by 16.08% in April; The price of metal praseodymium was 610000 yuan/ton, with a decrease of 12.23% in April; The price of praseodymium oxide was 455000 yuan/ton, with a decrease of 14.95% in April.

 

In early April, the listed prices of rare earths in the northern region remained generally stable, with prices higher than market expectations. The light rare earths market stabilized after the decline, but the continued lack of downstream demand after the Qingming Festival intensified the wait-and-see sentiment of buyers, and the light rare earths market continued to decline. The order situation in the domestic terminal market has not significantly improved. Overall, the order volume has decreased, and large manufacturers have a clear competitive advantage. Some small and medium-sized neodymium iron boron enterprises are facing operational difficulties. In addition, the operation of enterprises with export orders is not ideal, and due to the drastic fluctuations in raw material prices, the purchasing party has a serious resistance mentality. The order situation of downstream magnetic material enterprises has remained sluggish, with magnetic material factories mainly consuming existing inventory. The actual transaction price of rare earths continues to shift downward, putting pressure on the rare earth market. The pessimism in the rare earth market is heavy. Most of the operators continue to be bearish on the short-term price of rare earth. Under the influence of multiple factors, the price of the domestic rare earth market continues to fall.

 

The price of heavy rare earth dysprosium series in China has decreased, with the price of dysprosium oxide reaching 1.905 million yuan/ton as of the 28th, a decrease of 8.19% compared to the beginning of the month; The price of dysprosium iron alloy was 1.875 million yuan/ton, a decrease of 8.09% compared to the beginning of the month; The price of dysprosium metal was 2.63 million yuan/ton, a decrease of 7.07% compared to the beginning of the month; The price of terbium series in China has mainly declined, with terbium oxide prices of 8.4 million yuan/ton and metal terbium prices of 10.75 million yuan/ton. The price trend of heavy rare earth has declined, the production enterprises in Sichuan and other places have started to rise, the downstream procurement is very cold, and the oversupply has caused the market price to fall. In addition, there is an increase in rare earth mines from Southeast Asia, and the supply of rare earth is sufficient. The recovery of the rare earth terminal industry is slow, and transactions are scarce. The rare earth market prices continue to decline.

 

EDTA

According to statistics, although the demand for new energy vehicles is moderate, and the production and sales increased in March, the downstream permanent magnet procurement is very scarce, and the price of rare earth market is still not optimistic.

 

At the end of March, the Ministry of Industry and Information Technology and the Ministry of Natural Resources issued a notice on the total control indicators for the first batch of rare earth mining, smelting and separation in 2023: the first batch of rare earth mining indicators in 2023 was 120000 tons, an increase of approximately 19% compared to last year, including 109057 tons of rock and mineral rare earth, an increase of 22% compared to last year; Ionic rare earth ore is 10943 tons, a decrease of 5% compared to last year. The mining output of rare earth has risen sharply, which has hit market confidence in some ways, and the price of rare earth has continued to decline.

 

Future Market Forecast: In the near future, downstream rare earth merchants have been purchasing weakly, and demand is unlikely to improve. In addition, upstream supply is sufficient, the supply-demand contradiction is sharp, and the transaction situation is not good. In addition, the second quarter is gradually in the off-season of the rare earth industry, and the decline of the light rare earth market is difficult to change in the short term.

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