Summary of Precious Metal Prices in February

According to the Commodity Market Analysis System of Business Society, as of February 29, 2024, the spot market price of gold was 480.84 yuan/gram, a decrease of 0.25% from the pre holiday (February 8) gold spot market price of 482.04 yuan/gram. However, this week, the gold price began to slightly recover, rising by 0.36% in the past four days.

According to the Commodity Market Analysis System of Business Society, the average price of silver in the market on February 29, 2024 was 5861.33 yuan/kg, an increase of 1.11% compared to the average price of silver in the market before the holiday (February 8), which was 5797 yuan/kg. However, silver prices continued to decline this week, falling by 0.66% in the past four days.

From November 2022 to early February 2023, precious metal prices significantly increased. From March to the end of April, due to the impact of the US banking crisis, precious metal prices once again entered a period of skyrocketing. Silver prices began to fall in May, while gold remained relatively strong. In June, gold prices hit a high level and silver prices began to rise. After July, gold prices became stronger. In mid to late September, precious metal prices were affected by news from the Federal Reserve, leading to a high level correction. In October, due to geopolitical factors, the risk aversion sentiment rose and continued to rise. In early November, the high range was weak and fluctuated horizontally. At the end of the month, precious metal prices resumed, and silver saw a stronger monthly increase than gold. Silver prices slightly declined in December, while gold prices remained relatively strong. From January to February 2024, precious metal gold and silver fluctuated horizontally at high levels.

Macro data

On the overseas US side, the US GDP data for the fourth quarter unexpectedly revised downwards, and the US economy fell short of expectations. Market expectations for the magnitude of the Federal Reserve’s interest rate cut continue to weaken.

Federal Reserve Director Bauman stated that the time point for starting interest rate cuts has not yet been reached; The latest inflation data indicates a slowdown in inflation progress; Strong economic activity and consumer spending, coupled with a tight labor market; If inflation stagnates or reverses, still willing to raise policy interest rates; Premature reduction of policy interest rates may lead to the need for future interest rate hikes; If inflation continues to reach the 2% target, the ultimate interest rate cut will be appropriate.

Kansas Federal Reserve Chairman Jeffrey Schmid stated that there is no need to adjust policy stance in advance. In terms of interest rate cuts, patience should be maintained to continue observing the economy’s response to previous tightening policies and to seek conclusive evidence that inflation is being controlled.

In addition, the draft G20 Finance Ministers’ Communique shows that G20 finance ministers believe that the possibility of a soft landing for the global economy is increasing, and that a faster than expected decline in inflation is one of the risks.

The market still maintains the expectation of the Federal Reserve lowering interest rates for the first time in June, but the Federal Reserve’s swap rate shows that the Federal Reserve may only cut interest rates by 75 basis points in 2024.

On the domestic side, the central bank has lowered the benchmark loan interest rate LPR again after eight months. The People’s Bank of China authorizes the National Interbank Funding Center to announce that on February 20, 2024, the loan market quoted interest rate (LPR) is 3.45% for 1-year LPR and 3.95% for 5-year and above LPR. The former remained unchanged compared to the previous period, while the latter decreased by 25 basis points compared to the previous period. Lowering the medium – and long-term LPR benchmark interest rate will help reduce the pressure on residents to purchase properties and repay existing housing loans, which is conducive to further promoting investment and consumption.

Future Market Forecast

The dominant tone of precious metals remains unchanged. The Federal Reserve’s interest rate hike cycle is gradually coming to an end and entering a rate cut cycle, which logically favors interest free assets such as precious metals. Although the expectation of immediate interest rate cuts in the short term has weakened, the direction of the cycle remains unchanged. Short term precious metals continue to be affected by inflation data, and long-term support from expected interest rate cuts is still expected. It is expected that in the short term, the price of precious metals will remain high and there is a high probability of horizontal fluctuations.

According to the commodity market analysis system of Shengyishe, the domestic ammonium nitrate market price trend remained stable in February. As of the end of the month, the market price of ammonium nitrate was 4060 yuan/ton, which was the same as the price of 4060 yuan/ton at the beginning of the month, and the year-on-year price decreased by 6.45%.

In February, the domestic ammonium nitrate market was mainly stable in price, with stable operation of domestic ammonium nitrate manufacturers. Recently, the supply of goods on site has been normal, and the sales situation is average. Downstream demand is normal, and the price trend of ammonium nitrate market is temporarily stable. Recently, the shipping market of ammonium nitrate manufacturers has been normal, and downstream purchases are on demand. Recently, downstream purchases of nitro compound fertilizers have been average, and domestic purchases in the downstream civil explosive industry have been average. Domestic ammonium nitrate manufacturers are operating normally, and the market price of ammonium nitrate is mainly stable. As of now, the mainstream negotiation prices in Shaanxi region are 5500-5600 yuan/ton, Shandong region is 3800-4000 yuan/ton, and Hebei region is 3800-3900 yuan/ton.

The price trend of concentrated nitric acid in China declined in February, with an average price of 1916.67 yuan/ton as of the end of the month, a 4.17% decrease from the price of 2000 yuan/ton at the beginning of the month. Mainstream enterprises in East China offer a price range of 1900-2000 yuan/ton, while those in the North and Central China offer a price range of 1800-2000 yuan/ton. At present, there is not much change in the supply side of the concentrated nitric acid market. The supply of concentrated nitric acid is normal, and the market mainly relies on orders. The market transaction situation is not good, and industry insiders are mostly wait-and-see. The price of nitric acid in the market has slightly decreased, and the price trend of ammonium nitrate in the market is stable.

The domestic liquid ammonia market price trend declined in February, with a price of 2960 yuan/ton as of the end of the month, a decrease of 8.55% from the initial price of 3236.67 yuan/ton. The liquid ammonia price trend declined in February. The amount of ammonia released in the main production areas in the north has not changed much, and some units in Shandong have started operating steadily. The market has shown sufficient supply, and prices of large factories in Shandong and surrounding Hebei have generally declined. In addition, downstream procurement enthusiasm is poor, and there is a sharp supply-demand contradiction. Some manufacturers have lowered their factory prices. Currently, the mainstream quotation in Shandong is between 2900-3000 yuan/ton, and the fluctuation of ammonium nitrate prices is not significant due to this impact.

Recently, the downstream purchase order situation has been average, coupled with a downward trend in the market price of raw material nitric acid. However, there is an upward trend in the price of liquid ammonia, which is influenced by both long and short factors. The ammonium nitrate analyst at Business Society believes that the market price of ammonium nitrate may stabilize in the future.

Price trend

According to the bulk list data from Business Society, the domestic PC market stabilized first and then rose in February, with most spot prices of brand names concentrated in the post holiday period. As of February 27th, the mixed benchmark price of Shengyishe PC is around 16133.330 yuan/ton, with a+1.89% increase or decrease compared to the beginning of the month.

Cause analysis

In terms of raw materials, it can be seen from the above chart that the market price of bisphenol A has gradually increased this month. In the early stage, there were many restart devices for bisphenol A, and there were also new devices put into operation, which put pressure on the supply side. With the continuous increase of raw materials such as pure benzene and phenol, the cost support for PC has been strengthened. But the downstream stocking intensity is average, and it will shift to consolidating the market at the end of the month. Bisphenol A has a stronger overall support for PC in February.

In terms of supply: In February, the overall operating rate of domestic PC increased, and the industry average operating rate increased from 72% at the beginning of the month to around 84%. Enterprise production capacity returns and supply increases. However, due to the excessive delivery of pre-sale contracts before the holiday, the pressure on on-site shipment of goods is not high. The factory price often increases after the price increase, which provides sufficient support for spot prices.

In terms of demand: During the Spring Festival, PC consumption will continue to follow the previous rigid demand pattern, with a focus on digesting inventory. Downstream enterprises returning after the holiday are lagging behind in resuming work, and there is poor demand for on-site stocking. In addition, buyers have some resistance to PC sources with rising prices, and the demand side generally supports spot prices.

Future Market Forecast

The PC market saw a positive increase in February. After the strengthening of the upstream bisphenol A market, the consolidation has increased the support for PC costs. The load of domestic polymerization plants has significantly increased, and the market has abundant spot supply, but there is no significant accumulation of inventory, and the supply pressure is still acceptable. The confidence of traders is supported by suppliers, and their offers are actively high. The demand side is expanding slowly after the holiday, and the increase in PC prices is limited. It is expected that the PC market in the future may form a stalemate pattern.

After the holiday, accompanied by rainy and snowy weather in most northern regions, logistics continued to be hindered, leading to a significant increase in enterprise inventory. Many enterprises have reduced their operating rates to alleviate the pressure of losses, while downstream enterprises have encountered insufficient replenishment. Starting this week, transportation has gradually eased, factory inventory has decreased significantly, terminals have arrived one after another, and market transactions have heated up. However, overall market prices are still not optimistic. Since February, the market has continued to decline, with the price of Northwest calcium carbide monitored by Business Society dropping to 2900 yuan/ton, a decrease of 3.33%. It is understood that the mainstream price in the Wuhai area has dropped to 2700-2750 yuan/ton.

From the supply side perspective, production enterprises had high inventory before and after the Spring Festival. In order to actively ship goods, many enterprises provided subsidies and discounts, leading to a slight decline in the market. In the middle and late stages, logistics were hindered by the Spring Festival holiday and post holiday rainy and snowy weather, leading to further increase in enterprise inventory. Factories were forced to reduce production burden, leading to a shortage of raw materials near the end of the month. With the gradual arrival of goods, the supply side inventory pressure has decreased, and it is expected that the operating rate of enterprises may slightly increase.

From the demand side, due to the delayed arrival of calcium carbide, enterprises have been passively reducing their burden and have gradually recovered in the near future. It is expected that there will be fewer maintenance plans for the downstream PVC industry in March, and the overall demand will be relatively stable. The demand for calcium carbide will increase in the later stage.

In the future, the calcium carbide market has bottomed out. Considering that enterprise inventories are still at a medium to high level and prices remain relatively stable, as the speed of outbound shipments increases and downstream demand gradually improves, the calcium carbide market is steadily improving.

According to the commodity market analysis system of Business Society, the mainstream price of styrene in Shandong has fluctuated slightly recently. This week, the average price of styrene in Shandong was 8750.00 yuan/ton, with a month on month increase of 5.42%. The price has increased by 2.34% compared to the same period last year.

styrene

Recently, the market price of styrene has risen. From the above chart, it can be seen that the price of styrene has been mainly fluctuating and consolidating in the past three months, with slight fluctuations in the market this week. International oil prices continue to decline, with poor cost support. As the Spring Festival approaches, the supply of styrene increases while spot demand weakens. The spot transactions in the styrene market are flat, with slight fluctuations in the market.

In terms of raw materials, the price of pure benzene has slightly increased this week, with Sinopec’s pure benzene price at 8300 yuan/ton (prices in Shandong and Hebei regions have increased by 450 yuan/ton simultaneously). The price of pure benzene in East China continues to rise significantly, and downstream buying is still acceptable, with a positive transaction atmosphere. Some refineries in Shandong have a weak willingness to hold goods, resulting in a slight decline in their offers. Some businesses are bullish and actively buy, driving higher trading volume within the day.

On the downstream side, the prices of styrene in the three major downstream markets have fluctuated. At the beginning of this week, the average price of PS was 9633 yuan/ton, and over the weekend, the average price of PS was 9633 yuan/ton. The price remained stable and decreased by 1.03% compared to the same period last year. PS (Polystyrene) petrochemical manufacturers have gradually stopped reporting, and cost support is still acceptable. Some merchants have withdrawn from the market and are observing, resulting in a weak market atmosphere.

This week’s EPS market has fluctuated and stabilized, with an average price of 10171 yuan/ton for ordinary materials over the weekend. EPS is affected by the upstream pull up, and the market atmosphere has slightly improved. It is expected that the domestic EPS market may experience a narrow range of fluctuations.

Recently, the domestic ABS market has been consolidating. The number of market participants has decreased, and ABS may gradually have a price but no market. It is expected that the market will consolidate and operate horizontally in the short term.

International oil prices continue to decline, with poor cost support. As the Spring Festival approaches, the supply of styrene increases while spot demand weakens. It is expected that the short-term volatility of the styrene market will be mainly downward.

According to the commodity market analysis system of Business Society, the domestic Shandong propane market experienced narrow fluctuations this week. On January 29th, the average price of propane in Shandong’s market was 5370 yuan/ton, and on February 4th, it was 5375 yuan/ton. The weekly increase was 0.09%, a decrease of 16.33% compared to the same period last year.

As of February 4th, the mainstream prices of propane in different regions of China are as follows:

Region/ February 4th

East China region/ 5000-5250 yuan/ton

North China region/ 5100-5250 yuan/ton

Shandong region/ 5200-5250 yuan/ton

Northeast region/ 5000-5150 yuan/ton

This week (1.29-2.4), the Shandong propane market first rose and then stabilized, with an overall slight increase. At the beginning of the week, crude oil and external markets rose one after another, and with positive news, the buying and selling atmosphere on the market improved. Downstream active stocking led to a continued rise in propane prices. Subsequently, oil prices fell, coupled with a weakening of downstream stocking, and the market atmosphere began to weaken, leading to upstream discounts and selling.

Saudi Aramco announced its CP in February 2024, with propane priced at $630 per ton, an increase of $10 per ton compared to the previous month; Butane is $640 per ton, an increase of $10 per ton compared to the previous month.

Overall, as the Spring Festival approaches and logistics capacity weakens, demand will further weaken. It is expected that the propane market will experience a narrow decline in the short term.

According to the monitoring of the commodity market analysis system of Business Society, the price of potassium sulfate with a 50% content at the beginning of this week was 3466 yuan/ton, and the price of potassium sulfate with a 50% content at the end of this week was 3450 yuan/ton, a decrease of 0.48%.

The domestic potassium sulfate market prices are weak, and resource-based potassium sulfate manufacturers have normal operating rates and normal production during the Spring Festival period, ensuring sufficient supply of resource-based potassium sulfate. The official prices of manufacturers have no new policies, and the market prices are inconsistent, resulting in negotiated transaction orders. At present, 52% of Guotou Luo potassium powder arrives at the station at 3500-3600 yuan/ton, and 50% of Qinghai water and salt powder arrives at the station at 3400-3450 yuan/ton. This price is insufficient for new transactions.

As the Spring Festival holiday approaches, due to multiple factors such as logistics, transportation, and labor, most downstream factories and intermediate trade banks carry out a certain amount of raw material procurement reserves. Some downstream factories plan to end the holiday early after the year to ensure the supply of raw materials to a certain extent.

Prediction: The domestic potassium fertilizer market has sufficient supply, and it is expected that the domestic potassium fertilizer market prices will mainly fluctuate and weaken in the short term.

According to the commodity market analysis system of Business Society, the price of polyformaldehyde in Shandong has been fluctuating and consolidating recently. This week, the average production price of polyformaldehyde in Shandong was 4762.50 yuan/ton, a decrease of 2.81% month on month and 10.98% year-on-year.

Upstream methanol situation: The domestic methanol market is operating with a narrow upward trend. During the week, there were relatively few socially available spot goods, coupled with the impact of weather and other factors on unloading speed. At the same time, the transportation cost from the northwest production area to the sales area market increased, leading to a significant increase in domestic methanol prices. As supply gradually recovers, downstream receiving sentiment is average, and the market is mainly wait-and-see.

Recently, the price of raw material methanol has risen, with good cost support. However, downstream procurement remains in high demand, and the holiday is approaching. Business Society’s polyformaldehyde analysts predict that the price may fluctuate slightly.

Recently (1.26-1.31), the acrylonitrile market has been mainly deadlocked. According to the commodity market analysis system of Shengyishe, as of January 31st, the price of acrylonitrile in the loose water market was 9287 yuan/ton. At present, the mainstream price for self extraction of acrylonitrile from tanks in the market is between 9200 to 9500 yuan/ton. The price of raw material propylene has slightly decreased, and the cost support for acrylonitrile has weakened; Near the end of the lunar year, the main downstream ABS production has dropped to around 65%, with a small amount of inquiries about acrylonitrile; The overall supply of acrylonitrile units is loose, and the acrylonitrile market is slightly stagnant before the holiday.

Recently (1.26-1.31), domestic acrylonitrile units have been operating steadily with sufficient supply.

Recently (1.26-1.31), the raw material propylene market has slightly declined, and the cost support for acrylonitrile has weakened. As it rose to a high level within the month, the price difference with downstream polypropylene narrowed, suppressing downstream demand and leading to a slight pullback at the end of the month. According to the Commodity Market Analysis System of Shengyishe, as of January 31st, the domestic propylene price was 6880 yuan/ton, a decrease of 1.43% from 6980 yuan/ton on the 26th.

It is understood that since mid to late January, downstream ABS prices have risen but production has gradually decreased to a low level of around 6.5%, resulting in a significant weakening of demand for acrylonitrile; At present, acrylic fiber factories are frequently receiving purchase orders from yarn factories at the beginning of the month, with overall low production and weak demand for acrylonitrile; The nitrile rubber plant is operating normally, with slight support for the demand for acrylonitrile; The acrylamide industry is operating at a low rate of 40-50%, and the demand for acrylonitrile is weakening. Overall, the demand for acrylonitrile before the holiday was weak, and the supply of acrylonitrile was loose, resulting in a weak market consolidation.

Market forecast: Business Society acrylonitrile analysts believe that the current supply of acrylonitrile is still sufficient; The demand side support is weak, and the price of raw material propylene has fallen from a high level. Overall, it is expected that the acrylonitrile market will continue to maintain a narrow consolidation trend before the holiday.

Price trend in 2023

According to the Commodity Market Analysis System of Business Society, the average market price of caprolactam on January 1st was 11066 yuan/ton, and on December 31st, the average market price of caprolactam was 13842 yuan/ton. The overall domestic caprolactam market rose by 25.08% for the whole year of 2023. The highest value for the year was 14162 yuan/ton on September 21, and the lowest value for the year was 11066 yuan/ton on January 1.

2023 Market Analysis

In 2023, the domestic caprolactam market fluctuated and rose.

In the first half of 2023, the caprolactam market showed a strong upward trend and then fluctuated. In January, the price of raw material pure benzene increased, and cost support strengthened. The spot supply of caprolactam in the market is tight, and the price of caprolactam has increased accordingly. From February to March, the price of caprolactam fluctuated and fell. The supply of caprolactam in the spot market has increased, and the market situation has weakened. In April, due to the increase in the price of pure benzene raw material and strengthened cost support, the market price of caprolactam rose again with the raw material. The downstream PA6 market is improving, with an increase in procurement demand. Partial maintenance of caprolactam equipment in enterprises has led to a decrease in market supply. From May to June, the price of caprolactam fluctuated and fell. The price of raw material pure benzene continues to decline, with insufficient cost support. Downstream demand performance is insufficient, procurement is more cautious, and the market is mostly low price transactions.

In the second half of 2023, the caprolactam market continued to rise, then fell and rose again. In mid to early September, the market price of caprolactam fluctuated and increased. The market for raw material pure benzene is strengthening, with favorable cost support. The supply of caprolactam in the market has decreased, and downstream demand has followed up. The focus of caprolactam transactions has increased. From late September to October, the market price of caprolactam fell. The price of raw material pure benzene has been lowered, weakening cost support. Downstream on-demand procurement, weak terminal demand. From November to December, the market price of caprolactam rose again. Some enterprises are undergoing parking and maintenance, resulting in a decrease in local market supply. Downstream procurement is on demand, and the demand side is relatively stable.

According to the K-bar chart of 2023, it can be seen that the maximum increase in caprolactam in January 2023 was 14.76%. The largest decline of the year was in February, with a decrease of 4.94%.

2024 Aftermarket Forecast

Capacity situation

In 2023, the total domestic production capacity of caprolactam was 6.53 million tons, an increase of 840000 tons compared to 2022, and a year-on-year increase of 14.8% in production capacity.

Cost situation

In 2023, the price of raw material pure benzene fluctuated, with overall fluctuations and upward movements. On January 1st, the price was 6532 yuan/ton, and on December 31st, the price was 7193 yuan/ton, with an annual price increase of 10.11%. In 2023, the pure benzene industry chain will continue to expand, with a dual increase in supply and demand pattern. The rise in benzene prices in 2023 provides favorable support for the cost side of caprolactam, and the price trend of raw material pure benzene has a significant impact on the caprolactam market.

Supply situation

In April 2023, there was a significant maintenance of the caprolactam unit, resulting in a reduction in market supply. Due to the tight spot market, the price of caprolactam has increased. In September, some caprolactam units were unexpectedly shut down, resulting in a further reduction in supply and an increase in caprolactam prices. At the end of the year, some enterprises stopped for maintenance, resulting in a decrease in local market supply.

Demand situation

In 2023, the estimated growth rate of caprolactam consumption is over 16%, a significant increase from 5.97% in 2022. With the end of the domestic epidemic and the growth of national consumption level, the demand for terminal clothing market has recovered, driving the growth of downstream PA6 slicing and terminal nylon industry demand, and the demand for caprolactam market continues to increase. The steady increase in domestic nylon industry exports also supports caprolactam.

summary

In summary, the overall market for caprolactam in 2023 has been fluctuating, consolidating, and rising. In 2023, caprolactam production capacity will continue to expand, terminal demand will increase, cost support will be provided, and profitability will improve. With the development of the domestic economy, the demand for caprolactam in the market will continue to increase in 2024, production capacity will continue to increase, industry competition will become more intense, and market prospects will develop positively.