London, March 5, reported that copper prices rose on Tuesday after China announced economic stimulus measures, including tax cuts for manufacturing, boosting demand prospects.

Meanwhile, U.S. State Penpeo said the United States and China are “about to” reach an agreement to end trade disputes. Since last summer, the dispute has led to a sharp drop in metal prices.

London Metal Exchange (LME) copper closed up 1.1% at $6,478 a tonne, reversing Monday’s decline and approaching a seven-month high of $6,540 hit on February 25.

With the overall cooling of economic growth, China’s economic stimulus measures, including infrastructure spending commitments, are largely unexpected. The Chinese government says its economic growth target for this year is 6-6.5%, down from 6.6% in 2018.

Warren Patterson, an analyst at ING, said China would have to shift from verbal promises to fulfilling its stimulus commitments in order for copper prices to really recover. He expects copper prices to average $6,400 a tonne in April-June and to rise later this year.

Supporting copper prices is a sign of tight LME copper supply. LME copper stocks were 118,600 tons, the lowest since May 2008. The spot copper premium rose to a four-year high of $70 over the three-month copper premium.

However, during the seasonal stagnation of manufacturing activities during the winter and Lunar New Year holidays in China, stocks in warehouses on the Shanghai Futures Exchange (ShFE) more than doubled to 227,049 tons, and China’s import premium dropped from $120 in September to $55.50.

LME nickel closed up 3% at $13,650 a tonne and hit $13,725 in midday trading, the highest price since August.

Since early January last year, nickel stocks in registered warehouses on the London Metal Exchange have almost halved to 196,410 tons.

LME Aluminum closed down 0.1% at $1,874 per ton.

Zinc rose 1.1% to $2,780.

Lead fell 0.6% to $2,101.

Tin closed 0.5% higher at $21,565.

Kuala Lumpur, March 6: Malaysian spot tin prices rose by $70 on Wednesday to $21,640 per ton, Trading Volume 45 tons, compared with 18 tons on the previous trading day.

On the 4th, Asian Styrene CFR China closed at $1075-1085 per ton, up $5.0 per ton; FOB Korea closed at $1025-1035 per ton, up $5.0 per ton.

Iran’s Tasnim News Agency reported on March 2. In February, Iranian crude oil exports to Asia rebounded, nearly doubling from last month. Data show that Asian crude oil imports from Iran fell to their lowest level in two months in January, with China and India slowing down their purchases, while Japan imported zero for the third consecutive month. As a result of the US sanctions, Iranian oil buyers have to overcome transportation and payment problems. China, India, Japan and South Korea, as the four largest buyers of Iranian crude oil in Asia, imported 710,000 barrels of crude oil a day from Iran in January, down 49% from the same period in 2018. In January, as the largest customer, China imported 377,000 barrels of Iranian crude oil a day, down from 500,000 barrels a day in December last year; India imported 270,000 barrels a day; South Korea resumed importing Iranian oil in January after four months of interruption, but its imports fell by 75% compared with the same period last year; Japan imported zero in January. Sources predict that Iran’s crude oil exports to Asia nearly doubled in February to about 1.38 million barrels a day, as Japan and South Korea increased Iranian crude oil purchases in the first few months of the exemption period (May this year).

Price Trend

According to the price monitoring of business associations, as of March 4, the average price of domestic methanol market was 2480 yuan/ton, and the domestic methanol market performance was strong.

II. Market Analysis

Products: Domestic methanol market performance is strong. In the port market, the futures market has risen sharply, mainly in the hope of cash arbitrage. The trading atmosphere is good, and the port market rises with the market. Mainland market continued strong trend in the early period, olefin extraction supported by stable goods; plus later period equipment maintenance concentrated, supply side stock shrinkage expectations, business mindset strong, expected short-term market or maintain a volatile upward trend. In addition, the new olefin projects in Inner Mongolia and Jiangsu need continuous attention. Continuous arrangement of domestic methanol freight. The freight charges of Inner Mongolia North Line to Lubei are 290-350 yuan/ton for reference, 10 yuan/ton for low end, 290-310 yuan/ton for South line to Lubei, 10 yuan/ton for low end, 120-200 yuan/ton for part of Shanxi and 10-30 yuan/ton for North Shanxi, 140-200 yuan/ton for Guanzhong to North Shandong, 140-230 yuan/ton for South Shandong and 20 yuan/ton for high end. Xinjiang to North Shandong refers to about 790 yuan per ton.

Industry chain: formaldehyde: formaldehyde market is running steadily. Each enterprise’s offer is temporarily stable, start-up load is rising, downstream demand is recovering, but downstream formaldehyde is more resistant to the rise, the overall follow-up is limited. At present, the cost of formaldehyde market is at a high level, the overall inventory pressure is not large, but the follow-up of demand is limited. It is expected that the short-term market will be reorganized and operated. Acetic acid: The domestic acetic acid market is obviously weak. The North China supplier’s price drop aggravates the market’s hollowness in the latter part of the acetic acid market. The market has no buying intention for the declining acetic acid, and the market turnover is cold. Export is not good for the time being, and the market is becoming worse and worse. At present, the domestic acetic acid plant as a whole starts at a high level and the downstream demand digestion is slow, which leads to the situation that the market supply exceeds demand continues to intensify. It is expected that the weak acetic acid market will continue to dominate. Dimethyl ether: Dimethyl ether prices rose steadily and moderately, the trend warmed up. With the previous price dropping to a low level, terminals and traders have entered the market to stock up under the demand of bottom-copying, and the atmosphere of negotiation is good. The manufacturer delivers a large number of goods, and the inventory has basically returned to a controllable state. After the deep fall in the earlier period, most manufacturers’profits are hanging upside down at present, with a strong price mentality, and there is still room for dimethyl ether to rise.

3. Future Market Forecast

On the positive side, futures: futures market has risen sharply, driving the spot market to rise; domestic installations: Mainland based on spring inspection and other factors, and under the influence of environmental protection policies, maintenance enterprises have increased, local supply or contraction in the latter period; olefins: olefin procurement, pre-sale is good, supporting the price of raw material methanol. On the negative side, inventory: high inventory in the port area is difficult to digest in the short term, and the inventory pressure is high; freight: local freight of methanol has fallen significantly in the near future, which makes the cost of arrival slightly loose. Methanol analysts at business associations predict that the short-term domestic methanol market will rise slightly.