According to data monitoring by Business Society, as of March 31, 2024, the domestic market price of butanone was referenced at 7966 yuan/ton. Compared with March 1, 2024 (reference price of butanone was 8233 yuan/ton), the price decreased by 267 yuan/ton, a decrease of 3.24%.

 

In March, the butanone market can be described as “slightly warm but still cold”. At the beginning of March, although there was a brief upward trend in the butanone market, the overall effective support of the market was insufficient. Starting from mid to late March, the butanone market began a weak downward trend, and by the end of the month, the butanone market had ended with a weak decline. As of March 31st, the domestic market price of butanone is around 7700-8300 yuan/ton, with a decrease of about 100-300 yuan/ton during the month.

 

Analysis of Factors Influencing the March Butanone Market

 

In terms of supply: At the beginning of the month, the overall on-site supply of butanone was tight, with low operating rates and low inventory in butanone factories. In addition, some butanone factories delivered export orders, resulting in lower overall supply pressure. Therefore, at the beginning of the month, both the supply side and the export side provided some upward support to the market.

 

In terms of demand: In March, the overall performance of the domestic demand market for butanone remained average, with downstream purchases continuing to be the main focus. After the export order support gradually weakened at the beginning of the month, the drag of demand on the market for butanone gradually emerged. Due to the continued weak demand, supply pressure also came. Therefore, in the middle and late stages, due to demand pressure, the focus of negotiations in the butanone market continued to decline.

 

The price situation of butanone in the mainstream market in March

 

Region/ Product/ March 31st/ Monthly fluctuations

Shandong region/ Butanone/ 7700-7800./-300

Jiangsu region/ Butanone/ 7750-7800./-200

South China region/ Butanone/ 8100-8200./-300

East China region/ Butanone/ 7700-7800./-300

Market analysis of butanone

 

At present, the overall trading atmosphere in the butanone market is quiet, and there is definitely a clear wait-and-see view in the market. Downstream stocking and replenishment are still showing caution. Business Society butanone data analysts believe that in the short term, the domestic butanone market will mainly adjust and operate within a certain range, and the specific trend still needs to pay more attention to the specific news changes on the supply and demand side.

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Domestic cobalt prices rose first and then fell in March

 

According to the cobalt market analysis system of Business Society, the cobalt price on March 29th was 224000 yuan/ton, an increase of 2.47% compared to the cobalt price of 218600 yuan/ton on March 1st; Compared to the cobalt price of 227000 yuan/ton on March 19th, it decreased by 1.32%. The import volume of cobalt raw materials increased year-on-year, and the demand for cobalt in the market grew less than expected. The support for the rise in cobalt prices was limited, and cobalt prices rose first and then fell in March.

 

Domestic production and sales of new energy vehicles have increased

 

According to the latest data from the China Association of Automobile Manufacturers, in February, China’s production and sales of new energy vehicles reached 464000 and 477000 respectively, a year-on-year decrease of 16% and 9.2%, and a market share of 30.1%. From January to February, China’s production and sales of new energy vehicles reached 1.252 million and 1.207 million, respectively, with a year-on-year increase of 28.2% and 29.4%, and a market share of 30%.

 

The China Passenger Car Association released an analysis of the national passenger car market for February 2024. In terms of wholesale sales, the wholesale sales of new energy passenger vehicles reached 447000 units in February, a year-on-year decrease of 9.7% and a month on month decrease of 35.0%. In terms of retail sales, the new energy vehicle market sold 388000 units in February, a year-on-year decrease of 11.6% and a month on month decrease of 42.1%.

 

In February, the sales of new energy vehicles decreased year-on-year, leading to a decrease in demand in the cobalt market. From January to February, the production and sales of new energy vehicles increased year-on-year, but decreased month on month. The support for the increase in demand in the cobalt market is insufficient. The Ministry of Commerce has shown significant results in promoting the “100 City Linkage” Automobile Festival and the “Thousand Counties and Ten Thousand Towns” New Energy Vehicle Consumption Season, with continuous efforts in promoting consumption policies in multiple regions, stimulating more demand for car purchases. The sales of new energy vehicles are expected to increase, and the demand for cobalt in the future is expected to rebound.

 

Mobile phone sales have increased

 

According to data from the China Academy of Information and Communications Technology, in February 2024, the domestic market shipped 14.257 million mobile phones, a year-on-year decrease of 32.9%. Among them, there were 12.532 million 5G mobile phones, a year-on-year decrease of 29.2%, accounting for 87.9% of the same period’s mobile phone shipments. From January to February 2024, the domestic market shipped 46.035 million mobile phones, a year-on-year increase of 14.6%. Among them, there were 38.697 million 5G mobile phones, a year-on-year increase of 13.3%, accounting for 84.1% of the same period’s mobile phone shipments. The sales of mobile phones have increased year-on-year, and the demand for cobalt in the market has steadily increased.

 

According to the latest forecast from IDC’s global quarterly smartphone tracking report, smartphone shipments are expected to reach 1.2 billion units in 2024, a year-on-year increase of 2.8%. Overall smartphone trading volume is still lower than pre pandemic levels, but the market has self corrected and is emerging from a downturn. In the future, the sales of mobile phones will increase, and the demand for cobalt will rebound.

 

According to Canalys data, in January 2024, the shipment volume of smartphones in the five major markets in Southeast Asia surged to 7.26 million units, a 20% year-on-year increase. The sales of mobile phones in the Southeast Asian market are soaring, and the demand for mobile phones is increasing. The demand for cobalt in the international market is also increasing.

From domestic and global mobile phone sales, it can be seen that in the fourth quarter of 2023, domestic mobile phone sales rebounded, and the domestic mobile phone market slowly recovered; The sales of mobile phones in the Southeast Asian market are soaring, and the global mobile phone market is expected to rebound in 2024, leading to an increase in the global mobile phone market. Overall, global and domestic mobile phone market sales have slowly rebounded, and the demand for cobalt in the mobile phone market has rebounded.

 

The import volume of cobalt raw materials increased year-on-year

 

According to data from the General Administration of Customs, the import volume of cobalt raw materials in January was 69453 physical tons, equivalent to 20938 metal tons, an increase of 32.95% month on month and 133.65% year-on-year. The import volume of cobalt raw materials in February was 44761 physical tons, equivalent to 13585 metal tons, a month on month decrease of 35.12% and a year-on-year increase of 76.26%. The total import volume of cobalt raw materials from January to February was 114214 tons, equivalent to 34523 metal tons of cobalt. From January to February, cobalt raw materials gradually arrived at the port. Due to the impact of the Spring Festival, ship arrivals were delayed, and the overall arrival volume of cobalt raw materials in February decreased. It is expected that the arrival volume of cobalt raw materials in March will increase, with an expected arrival volume of 15000-16000 metal tons.

 

Overview and Outlook

 

Business Society data analyst Bai Jiaxin believes that on the demand side, global and domestic mobile phone market sales have rebounded, and the demand for cobalt in mobile phones has increased; The sales of new energy vehicles have decreased month on month, and the demand for cobalt in the market has rebounded. The growth of demand for cobalt in electric vehicles is insufficient, and the demand side has limited positive effects on the domestic cobalt market. On the supply side, the arrival of cobalt raw materials in February has slightly declined, but the expected arrival of cobalt raw materials in March has increased significantly, indicating sufficient supply in the cobalt market. Overall, the demand growth in the cobalt market is lower than expected, with sufficient supply of cobalt raw materials. The oversupply of cobalt in the market remains limited, and the support for the rise in cobalt prices is limited. It is expected that cobalt prices will remain weak and consolidate at a low level in the future.

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Recently (3.18-3.27), the trichloromethane market in Shandong region has been operating steadily. According to the commodity market analysis system of Shengyishe, as of March 27th, the price of trichloromethane bulk water in Shandong region was 2780 yuan/ton, which remained stable compared to the previous period. Downstream production remains stable with on-demand stocking, while terminal procurement performance is mediocre; The price of raw material methanol has slightly decreased, while the price of liquid chlorine has slightly increased. The cost of trichloromethane continues to support, and the trichloromethane market is stable and consolidating.

 

Recently (3.18-3.27), there has been a slight increase in domestic methane chloride supply, with overall production starting around 70%.

 

Recently (3.18-3.27), the price of raw material methanol has slightly decreased, while the price of liquid chlorine has slightly increased. The cost of trichloromethane still has support. According to the Commodity Market Analysis System of Shengyishe, as of March 27th, the spot price of methanol was 2636 yuan/ton, a decrease of 2.41% from 2701 yuan/ton on March 18th. As of March 27th, the acceptance price of liquid chlorine tank trucks in Shandong region has remained around 400 yuan/ton, which is higher than the previous period.

 

Recently (3.18-3.27), the sales of air conditioners were good during the peak season. According to statistics, the production of household air conditioners in March was 22.13 million units, an increase of 25.2% compared to the same period last year. The prices of refrigerants during the peak season have increased. However, since the issuance of HFCs refrigerant quotas, refrigerant enterprises have mainly ordered production based on the annual quota, and overall production has remained stable at a low level. Demand is weak in support of trichloromethane.

 

Business Society methane chloride data analysts believe that the cost of trichloromethane still has support; The downstream refrigerant industry is experiencing peak seasons but production remains low, with limited support for the demand for trichloromethane. Overall, in the short term, the trichloromethane market is mainly stable and consolidating.

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In the first quarter of 2024, the domestic lithium hydroxide market first fell and then rose. According to the Commodity Market Analysis System of Business Society, the average price of industrial grade lithium hydroxide in China was 133600 yuan/ton as of January 1, 2024. As of March 26, the average price of industrial grade lithium hydroxide in China was 106400 yuan/ton, and the market fell by 20.36% in the first quarter.

 

Market Review:

 

The fundamentals were weak in January, and the lithium hydroxide market declined. Within January, the price of industrial grade lithium carbonate in the upstream remained stable with small fluctuations and weak fluctuations. The market for lithium pyroxene concentrate in the upstream fell, and cost support was limited. The supply side has a low operating rate, mainly due to the digestion of inventory, and the downstream demand for high nickel materials is poor. The follow-up of lithium hydroxide procurement is slow, and market transactions are mainly long-term orders. The lithium hydroxide market is under pressure, and some companies have lowered their high-end quotations. After the decline, the market is deadlocked and stable, with a strong wait-and-see atmosphere.

 

At the end of February, the lithium hydroxide market stopped falling and rose. Within February, the pre holiday cost support is limited, and the follow-up of downstream high nickel positive electrode pre holiday reserves is still acceptable. Post holiday cost support is slightly weak, inquiry enthusiasm is still acceptable, and actual transactions are light. Towards the end of the month, upstream lithium carbonate prices have risen, while upstream spodumene concentrate prices have risen. Cost support has been boosted, and the mentality of the industry is still good, driving a slight upward trend in the lithium hydroxide market.

 

The cost boost in March, combined with a rebound in demand, led to a rise in the lithium hydroxide market. As of March 26th, prices have risen by 6.40% for the month. In March, the price of upstream spodumene concentrate rose, and the upstream lithium carbonate market was relatively strong. The increase in cost prices boosted the mentality of industry players. Some companies on the supply side had relatively low inventory, and downstream demand for nickel materials improved. The 3C digital market performed average, while some manufacturers gradually increased production. The downstream inquiry atmosphere improved, but the purchasing attitude remained cautious and the market had a strong wait-and-see attitude.

 

Cause analysis:

 

Cost side: Production costs have a significant impact on the price of lithium hydroxide, with upstream lithium carbonate having a significant impact on the lithium hydroxide market. In the first quarter, the trend of lithium hydroxide mainly followed the adjustment of upstream lithium carbonate, and the price of lithium carbonate rose in March, providing strong support for the lithium hydroxide market. The impact of lithium carbonate may continue in the future.

 

Comparison chart of price trends between lithium hydroxide and upstream lithium carbonate in the first quarter:

 

Supply side: In January and February, some enterprises stopped for maintenance, and the industry’s operating rate was low. Some lithium hydroxide enterprises slowly resumed production after the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival). At present, major factories are operating normally, and most production enterprises mainly deliver long-term cooperative orders. It is expected that in April, the supply side will start construction or focus on single production, while inventory may be maintained within a controllable range.

 

Demand side: Currently, there is still a decent demand for high nickel ternary downstream, with the downstream energy storage equipment market mainly following up on demand. The downstream electronic product market has relatively stable demand, and the demand side has improved compared to the previous period. However, there is still uncertainty, and it is expected that short-term demand will mainly follow up. The purchasing mentality on the demand side may still be cautious.

 

Comprehensive prediction:

 

In summary, there is still some cost support in the near future, and manufacturers still have a mentality of raising prices. However, downstream follow-up is cautious, and procurement is mainly based on demand. It is expected that the lithium hydroxide market will be mainly wait-and-see in the short term, and more attention will still be paid to the trend of upstream lithium carbonate.

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According to the Commodity Market Analysis System of Business Society, from March 18th to 22nd, the average price of cyclohexanone in the domestic market dropped from 9768 yuan/ton to 9693 yuan/ton, with a price drop of 0.77% during the cycle, a month on month decrease of 3.54%, and a year-on-year increase of 2.40%. The domestic cyclohexanone market is operating weakly, with the raw material pure benzene rising first and then falling in recent times. The cost support has weakened from strong to weak, and downstream chemical fibers are purchased on demand. The spot supply of cyclohexanone in the market is stable and abundant, and downstream high prices are generally following suit. High priced shipments are hindered, and the focus of transactions has declined.

 

On the cost side, raw material pure benzene: The domestic production of pure benzene has slightly increased, and downstream inventory of essential raw materials is low. Demand based delivery is stable, and the price of pure benzene fluctuates and falls after a high opening. As of March 22, the benchmark price of pure benzene for Shengyishe is 8540.50 yuan/ton. In the cost composition of the traditional cyclohexanone process route, pure benzene accounts for 53%. The market trend of pure benzene directly affects the price trend of cyclohexanone, and the short-term cost of cyclohexanone is influenced by favorable factors.

 

On the supply side, according to the commodity market analysis system of Business Society, the domestic production capacity of cyclohexanone is about 7.14 million tons, and the current operating load is about 60%, which is at a relatively low level. The average weekly operating load of cyclohexanone is 69.80%, with a weekly production of 106900 tons, an increase from the previous cycle. The supply of cyclohexanone is affected by bearish factors.

 

On the demand side, cyclohexanone units are mainly equipped with downstream production of caprolactam, which is one of the main downstream sources of cyclohexanone. The caprolactam market is running weakly, with abundant supply of caprolactam in recent times, which has constrained market confidence. In addition, upstream pure benzene prices have fallen, resulting in empty costs and supply. The caprolactam market continues to weaken. The demand side for cyclohexanone is temporarily bearish.

 

In the future market forecast, pure benzene will operate in a volatile manner, with relatively stable cost support. Downstream demand is high with on-demand procurement, and the market spot supply is stable and abundant. Business Society cyclohexanone analysts predict that the domestic cyclohexanone market will mainly consolidate in the short term.

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