1、 Price trend

According to the commodity market analysis system of Business Society, the price of pure benzene has slightly increased this week. On June 3rd, the price of pure benzene was 9300 yuan/ton, and on Friday (June 7th), the price of pure benzene was 9292 yuan/ton, an increase of 1.88% from last week and 42.76% from the same period last year.

2、 Analysis and Review

This week, the price of Sinopec pure benzene was 9300 yuan/ton (prices in Shandong and Hebei regions increased by 200 yuan/ton simultaneously)

3、 Future Market Forecast

Crude oil rebounded, and spot pure benzene fluctuated around 9280 yuan/ton in the night trading. It is expected that pure benzene in East China will consolidate at a high level in the morning.

4、 Data calendar

Crude oil: The European Central Bank has lowered interest rates for the first time in five years, and the pressure on high interest rates has eased. Coupled with the increased probability of the Federal Reserve cutting interest rates in September, international oil prices have risen. NYMEX crude oil futures contract 07 rose by $1.48/barrel or 2.00% to 75.55; ICE oil futures contract 08 rose $1.46 per barrel, or 1.86%, at 79.87. The main contract of China INE crude oil futures, 2407, rose 4.0 to 574 yuan/barrel, and rose 10.9 to 584.9 yuan/barrel in overnight trading.

Core logic: Yesterday, the atmosphere of pure benzene negotiations in East China was flat, with contract transactions being the main focus. Some refineries in Shandong have voluntarily lowered their shipments, while some refineries are sticking to bottom prices to sell their goods. Several factories auctioned off, and the transaction volume continued to shrink.

1、 Price trend

According to monitoring data from Business Society, the overall price of soda ash increased in May. The average market price of light soda ash at the beginning of the month was 2030 yuan/ton, and the average market price at the end of the month was around 2170 yuan/ton, with a price increase of 6.9%, an increase of 2.36% compared to the same period last year. On May 30th, the commodity index of light soda ash was 110.77, unchanged from yesterday, a decrease of 41.42% from the highest point of 189.10 points (2021-11-07) in the cycle, and an increase of 75.41% from the lowest point of 63.15 points on November 18th, 2015. (Note: The cycle refers to the period from September 1st, 2011 to present)

2、 Market analysis

According to the commodity analysis system of Shengyishe, the overall price of soda ash has been relatively strong this month. The price of soda ash in the central China region is strong, with a mainstream market price of around 2000-2200 yuan/ton for light soda ash. The price of soda ash in the eastern China region is strong, with a mainstream market price of around 2150-2300 yuan/ton for light soda ash. The data shows that the operating rate of soda ash during the week was around 82%. In terms of inventory, this week’s pure alkali inventory is about 810000 tons, and the production of pure alkali is about 680000 tons.

In terms of demand: According to the commodity analysis system of Business Society, the spot price of glass has been rising this month. At the beginning of the month, the average price of glass was 18.65 yuan/square meter, and at the end of the month, the average price was 19.86 yuan/square meter. The price increased within the month, with a magnitude of 6.49%. The spot prices in the glass market fluctuate. The main focus is on replenishing inventory in case of urgent needs, with a strong resistance to high prices.

According to the price monitoring of Business Society, in the 21st week of 2024 (5.20-5.24), there were a total of 3 products that rose, 1 product that fell, and 3 products that rose or fell to 0 on the chlor alkali industry price list. The main rising commodities include: light soda ash (1.91%), PVC (1.28%), and caustic soda (0.25%); The main commodities falling are baking soda (-0.84%). The average increase and decrease this week is 0.37%.

Analysts from Business Society believe that according to the Commodity Analysis System of Business Society, the price of light soda ash has been relatively strong recently, and the production of soda ash enterprises has decreased. In terms of downstream demand, with the recent increase in prices, more purchases have been made on demand, with moderate replenishment of inventory. However, there has not been much pressure on enterprises to ship goods in the near future. Based on the comprehensive analysis of supply and demand, it is expected that soda ash will continue to operate steadily in the later stage, depending on downstream market demand.

According to data monitored by Business Society, the carbon black market price continued to fluctuate and decline this month, with a price drop of 500-600 yuan/ton at the end of the month compared to the beginning of the month. As of May 31, the domestic N220 carbon black market price was at 9166 yuan/ton.

In terms of raw materials, the price trend of high-temperature coal tar market has declined this month. As of the 31st, the price of coal tar was 4425 yuan/ton. Recently, the profitability of coking enterprises has been decent, and their enthusiasm for starting production has significantly increased. This has greatly boosted the production momentum of coking enterprises, leading to a significant increase in the market supply of coal tar. The downstream main product coal tar market has a long-term oversupply, and the market situation is weak and difficult to improve, which brings a strong negative atmosphere to the high-temperature coal tar raw material market. This market atmosphere has formed a strong pressure on raw material prices, and it is expected that terminal demand will be weak and difficult to improve in the short term. The overall trend of coal tar prices is weak, and the support for carbon black cost is weak.

Production situation: The supply of carbon black in the market is relatively sufficient this month, and most carbon black enterprises have maintained stable production. Some shutdown and maintenance enterprises have gradually resumed production, and the operating rate has increased.

In terms of terminals, the downstream tire industry is currently in a seasonal off-season, with weak demand in both domestic and international tire replacement markets. The export volume of foreign trade is also showing a trend of reduction, leading to serious inventory accumulation in the market. The sales performance of the downstream rubber product industry is lackluster, with a significant decrease in demand for raw materials and procurement enthusiasm. Affected by this, the shipment volume of carbon black enterprises has become sluggish, and the momentum of price increase is clearly lacking in momentum.

In terms of import and export: According to customs data, China imported 31800 tons of carbon black in April 2024, an increase of 50.79% year-on-year and 11.9% month on month; From January to April 2024, China’s cumulative imports of carbon black reached 108600 tons, an increase of 36.72% compared to the same period last year, with imports increasing by approximately 29000 tons. In April 2024, China’s carbon black exports were approximately 57600 tons, an increase of 15.67% year-on-year and a decrease of 31.87% month on month. From January to April 2024, China’s cumulative exports of carbon black reached 312200 tons, an increase of 62.11% compared to the same period last year, and the export volume increased by approximately 120000 tons.

Future outlook: The market price of high-temperature coal tar is weak, and the support for the cost side of carbon black is relatively limited; At the same time, the downstream tire and rubber product industry’s shipment volume remains stable but growth is weak, leading to a weakened willingness to purchase high priced carbon black, and often holding a price pressure attitude when inquiring. At present, there is no clear positive signal on the demand side, and the carbon black market is expected to continue to maintain the current weak operating trend.

In May, the dichloromethane market first rose and then fell, with an overall upward trend. According to the Commodity Market Analysis System of Business Society, as of May 31, the price of dichloromethane bulk water in Shandong Province was 2395 yuan/ton, an increase of 3.68% from 2310 yuan/ton in early May, and a decrease of 4.58% from the high point of 2510 yuan/ton in the cycle. In May, the production of domestic methane chloride plants slightly increased, and some enterprises had a slight increase in dichloromethane inventory at the end of the month; In May, the methanol market for dichloromethane raw materials fluctuated and rose, and the price range of liquid chlorine reorganized, continuing to support the cost of dichloromethane; The downstream refrigerant of dichloromethane started operating at a low level, and the dichloromethane terminal just needed support. At the end of May, the dichloromethane market slightly declined.

In May, the production of domestic methane chloride plants increased, and in the second half of the month, the pressure on the supply side of dichloromethane increased. The production of plants gradually increased from 7.1% in early May to around 7.9% by the end of the month.

In May, the price of raw material methanol fluctuated and rose, while the price range of liquid chlorine stabilized. The cost of dichloromethane continued to support. According to the commodity market analysis system of Shengyishe, as of May 31st, the spot price of methanol was 2761 yuan/ton, an increase of 4.15% from the beginning of the month’s 2651 yuan/ton, and a decrease of 8.55% from the high point of 3020 yuan/ton in the cycle; At the end of May, the price of liquid chlorine tank trucks in Shandong region was 500 yuan/ton, a significant increase from 300 yuan/ton in the middle of the month, and remained unchanged from 500 yuan/ton at the beginning of the month.

Downstream R 32 production has remained stable, with terminals receiving goods on demand. At the beginning of the month, merchants actively stocked up, but later on, as dichloromethane rose to a high level and the supply side relaxed again, merchants were mainly wait-and-see in the later stage. Currently, downstream demand for dichloromethane is mainly supported, and the market atmosphere is flat.

Market forecast: Analysts from Business Society’s methane chloride data believe that some companies still face pressure on inventory, and terminal inquiries are cautious; The prices of raw materials methanol and liquid chlorine continue to support the cost of dichloromethane, and overall, it is expected that the dichloromethane market will fluctuate in the later period.

According to the commodity market analysis system of Shengyishe, as of May 31st, the average price of alumina in the market was 3983 yuan/ton, and on May 1st, the average price of alumina in the market was 3500 yuan/ton, an increase of 13.81% compared to the beginning of the month.

Upstream aspect

Recently, northern mines have continued to suspend and reduce production, and there is no expectation of large-scale resumption of production, which has led to a tight supply of mines and affected the operating rate of alumina. As of the beginning of this month, the slow improvement of bauxite supply capacity and the impact of routine equipment maintenance have resulted in no further increase in alumina production capacity. At present, the insufficient supply capacity of bauxite and equipment maintenance are still the main factors restricting the increase in production of alumina enterprises in the southern region.

Affected by the news that Rio Tinto Group has announced that its Australian Yarwun smelters and Queensland Alumina Limited have experienced force majeure in their alumina shipments, with prices skyrocketing due to shortages in natural gas inventory/supply for power generation. Due to uncontrollable factors such as insufficient natural gas supply and overall shortage of overseas alumina spot, the execution of some contracts between the two alumina plants has been hindered in the short term. Domestic alumina prices are strong.

Downstream aspect

As of now, the entire domestic electrolytic aluminum industry has basically reached its peak operating level, and there is basically no growth space above. The long-term interference factors may be the phased reduction and shutdown of aluminum production capacity in Yunnan region due to the alternation of abundant and dry seasons.

The inventory of aluminum oxide in electrolytic aluminum enterprises continues to decline, especially for some individual electrolytic aluminum enterprises. Although spot orders and long orders have recovered, the inventory of aluminum oxide remains at the low level in previous years.

Future Market Forecast

Overall, the supply of domestically produced ore in the upstream continues to be tight, and the force majeure factors of foreign alumina giants have affected the supply of imported alumina, all of which are the reasons for the increase in alumina prices this month. It is expected that the price of alumina will fluctuate at a high level.