According to the monitoring of the commodity market analysis system of Shengyi Society, the 1 # tin ingot market in East China fell this month (7.1-7.31), with an average market price of 274490 yuan/ton at the beginning of the month and 247760 yuan/ton at the end of the month, a decrease of 9.48% in the month.

Affected by overseas macro sentiment this month, tin prices have fluctuated and fallen. Tin prices have fluctuated significantly, and currently the Federal Reserve’s interest rate cuts have not yet landed, and potential risks on the supply side of fundamentals still exist.

At the mining end, supply issues will continue to exist for at least the next few years, and there is strong uncertainty about the resumption of tin mining in the Wa State of Myanmar. Currently, negotiations on the ownership of mining rights are ongoing, and there is no clear news of resumption of production. However, the tin ore production in the Democratic Republic of Congo in Africa continues to increase, which to some extent compensates for the reduction of tin ore in Myanmar, and the overall tin ore situation is not overly tense.

On the refining side, the operating rate of smelters has not significantly declined this year, and domestic refined tin production remains high. In addition, the export of Indonesian tin ingots is gradually recovering, and the supply expectation for Indonesia in the second half of the year is expected to significantly increase compared to the first half. We can pay attention to the import volume of Indonesian tin ingots in August.

On the demand side, the consumption of solder has slightly decreased year-on-year, while the consumption of tin bars has been maintained, and the consumption of tin foil has rapidly declined. Recently, it is a low season for demand, and domestic terminal consumption is still sluggish. Downstream consumers are cautious and cautious in purchasing. The consumption of electronic products is relatively strong, and photovoltaic orders have significantly declined, with photovoltaic orders decreasing by 30% -40% month on month in June.

It is expected that there will be little support on the demand side in the short term. Recently, due to the decline in tin prices, a large amount of Shanghai tin has been destocked, and inventory has provided support for tin prices. In the short term, it has mainly been fluctuating.

1、 Price trend

According to the commodity analysis system of Shengyi Society, the overall price of caustic soda increased in July. At the beginning of the month, the average market price in Shandong was around 794 yuan/ton, and at the end of the month, the average market price in Shandong was 807 yuan/ton. The overall price increased by 1.64%, decreased by 1.34% compared to last weekend, and increased by 9.44% year-on-year. On July 29th, the chemical index was 874 points, a decrease of 1 point from yesterday, a decrease of 37.57% from the highest point of 1400 points during the cycle (2021-10-23), and an increase of 46.15% from the lowest point of 598 points on April 8th, 2020. (Note: The cycle refers to the period from December 1, 2011 to present)

2、 Market analysis

From the beginning of the month to the middle of the month, the price of caustic soda increased. Due to equipment maintenance in the Shandong region, some companies did not have much inventory pressure. Most companies increased their caustic soda prices by 10-20 yuan/ton, boosting downstream market sentiment and increasing downstream purchasing enthusiasm. At the end of the month, the equipment maintenance in Shandong region resumed, downstream procurement was average, demand was relatively weak, and caustic soda prices declined.

Can caustic soda prices rebound in August?

In terms of supply, there were 6-7 companies undergoing maintenance in July and August, with a production capacity of approximately 1.77 million tons. The supply and maintenance have narrowed or supported the price of caustic soda.

From a downstream perspective, some domestic alumina enterprises have increased their procurement of imported minerals to improve production, and currently mainly focus on fulfilling long-term orders. Aluminum oxide traders have a strong sentiment of cherishing their goods. It is expected that the short-term operating range of domestic alumina prices will be between 3850-4000 yuan/ton, and alumina prices may maintain a stable operating trend.

Business analysts believe that in recent times, caustic soda prices have fallen by the end of July, and the equipment of previous maintenance companies has gradually resumed, resulting in an increase in supply and inventory. The price of caustic soda is declining, but with the maintenance of the caustic soda plant in the later stage, it is expected that the price of caustic soda in late August may rise, depending on downstream market demand.

Aluminum prices drop to around 19000

Aluminum prices continue to decline. According to the Commodity Market Analysis System of Shengyi Society, the average price of aluminum ingots in the East China market on July 29, 2024 was 19140 yuan/ton, a decrease of 6.16% from the market average price of 20396.67 yuan/ton at the beginning of the month (July 1).

Reasons for the decline

Macro factors: There are signs of a weakening recession in overseas data, and the Federal Reserve’s Beige Book shows that businesses expect future growth to slow down, and the labor market continues to be weak. CME shows that the probability of the Federal Reserve’s descending order in September has increased to 91.9%, and the expectation of a rate cut in July has fallen through. Domestically, the economic data for the second quarter was released, with a GDP of 4.7%, which was lower than expected.

The supply and demand fundamentals are weak, downstream replenishment is falsified, and destocking is not smooth. As of July 29th, the inventory of electrolytic aluminum in major domestic markets was 795000 tons, which is 33000 tons higher than the inventory of 762000 tons on July 1st.

Short term long short game intensifies

At present, the price of aluminum ingots has fallen to near the marginal cost, and the upstream raw material side is tight, which provides some support for the price. In the short term, the long short game is intensifying.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of LLDPE (7042) was 8478 yuan/ton on July 18th, and the average price was 8411 yuan/ton on July 25th, with a price drop of 0.79% during this period.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of LDPE (2426H) was 10137 yuan/ton on July 18th, and the average price was 10037 yuan/ton on July 25th, with a price drop of 0.99% during this period.

According to the monitoring of the commodity market analysis system of Shengyi Society, the domestic price of HDPE (5000S) was 8275 yuan/ton on July 18th, and the average price was 8175 yuan/ton on July 25th, with a price drop of 1.21% during this period.

The trend of polyethylene continued to decline this week. International crude oil prices have fallen, and the cost side is bearish on the polyethylene market. With the restart of some polyethylene maintenance units, there are still expectations of an increase in the supply side. The operating rate of downstream product industry has decreased, and demand is in the traditional off-season, with limited market order follow-up. The market mentality is bearish, the trading atmosphere on the market is not good, the quotes of production enterprises are loose, traders are following the trend and lowering prices, and the main focus is on offering discounts for shipments.

On July 26th, the polyethylene L2409 contract on the Dalian Commodity Exchange opened at 8288 yuan and closed at 8291 yuan, a decrease of 4 yuan, with a maximum of 8320 yuan and a minimum of 8274 yuan, a decrease of 0.05%. This week, the polyethylene futures market fell weakly, which is bearish for the spot market.

There is an expectation of an increase on the supply side; Agricultural film is in the off-season of demand, with low factory start-up rates and low load operation; The demand for low voltage brushed products is average, and there is insufficient follow-up on new orders; The trend of polyethylene futures market is weak; There is currently no positive support, and it is expected that polyethylene will continue to operate weakly.

In terms of imports: In June, China imported 19583 tons of lithium carbonate, a decrease of 20% compared to the previous month; The average import price in June was 87000 yuan/ton.

From the perspective of import source countries, in June, lithium carbonate from Chile accounted for 80% and from Argentina accounted for 17%, with import volumes of 15652 tons and 3434 tons respectively.

In terms of exports, in June, China exported 501 tons of lithium carbonate, reaching a new high for the year.

Recently, domestic lithium carbonate has continued to accumulate inventory, import volume has increased, global lithium carbonate projects have been put into operation and production capacity has continued to increase, and prices have remained weak.