According to the Commodity Market Analysis System of Business Society, the rare earth market price index was mainly volatile in October, with the domestic heavy rare earth market slightly rising and the light rare earth market price slightly decreasing. On October 25th, the rare earth index was 515 points, a slight decrease from 516 points at the beginning of the month, a decrease of 48.86% from the highest point of 1007 points in the cycle (2022-02-24), and an increase of 90.04% from the lowest point of 271 points on September 13, 2015. (Note: The cycle refers to the period from December 1st, 2011 to the present).

 

The prices of neodymium oxide, praseodymium neodymium oxide, and metal praseodymium neodymium in China have slightly decreased, while the prices of metal neodymium have slightly increased. The prices of metal praseodymium and praseodymium oxide have remained stable, with the price of praseodymium neodymium oxide reaching 512500 yuan/ton as of the end of the month, a decrease of 1.44%; The price of praseodymium neodymium alloy was 632500 yuan/ton, a decrease of 1.17%; The price of neodymium oxide was 520000 yuan/ton, a decrease of 2.35%; The price of neodymium metal is 662500 yuan/ton, with a price increase of 0.38%; The price of metal praseodymium is 670000 yuan/ton, with a stable price trend; The price of praseodymium oxide is 527500 yuan/ton, with a stable price trend.

 

Downstream magnetic material manufacturers produced normally during the holiday in early October, but their pre holiday inventory decreased. Some magnetic material companies stated that their orders were scheduled until mid October, leading to an increase in rare earth procurement orders and an increase in domestic rare earth market prices. However, in the middle of the year, the manufacturer’s stock preparation has come to an end, and the procurement of rare earth products is not active. In addition, the inventory of waste separation enterprises is sufficient. Although the situation of metal praseodymium neodymium price inversion has improved, the transaction situation is poor, and the domestic rare earth market prices have slightly decreased. Although some traders have driven an increase in market activity, and upstream companies have offered relatively firm prices, terminal demand has fallen short of expectations, and the overall light rare earth market is relatively weak.

 

The domestic heavy rare earth dysprosium series market is mainly volatile, with the price of dysprosium oxide reaching 2.66 million yuan/ton as of the end of the month, a decrease of 1.12% compared to the beginning of the month; The price of dysprosium iron alloy is 2.63 million yuan/ton, an increase of 1.74% compared to the beginning of the month; The price of dysprosium metal was 3.39 million yuan/ton, an increase of 1.19% compared to the beginning of the month; The price of terbium series in China has mainly declined, with terbium oxide priced at 8.175 million yuan/ton and metallic terbium priced at 10.35 million yuan/ton. At the beginning of the month, downstream restocking was carried out, with an increase in inquiries and a tightening of spot supply, leading to an increase in the domestic heavy rare earth market price. The later stage of procurement has come to an end, coupled with increased wait-and-see sentiment among merchants, the prices of heavy rare earths have slightly decreased. However, in October, the demand for new energy vehicles, industrial robots and other terminals continued to increase, and the demand is still positive. The domestic heavy rare earth market still has support, and overall, the prices of the heavy rare earth market have slightly increased.

According to statistics, the production and sales of new energy vehicles completed 879000 and 904000 units respectively in September, with year-on-year growth of 16.1% and 27.7%, and a market share of 31.6%. From January to September, the production and sales of new energy vehicles completed 6.313 million and 6.278 million units respectively, with year-on-year growth of 33.7% and 37.5%, and a market share of 29.8%. In 2023, the production and sales of new energy continue to rise, coupled with the opening of the Golden Nine Silver Ten Year Plan, the demand for new energy has increased, and the increase in production and sales of new energy vehicles has formed a certain support for the rare earth market, causing fluctuations in the domestic rare earth market trend.

 

After years of governance, the domestic rare earth industry has gradually formed a supply pattern with large groups as the main body and relatively concentrated raw materials. With the continuous development of the foreign rare earth industry, China’s share of rare earth production has decreased from 90% to 70%. According to statistics, the export volume of rare earths in September was 3935.2 tons. The cumulative total export volume of rare earths in China from January to September was 40371.8 tons, a year-on-year increase of 6.6%. The export volume of rare earths in China has increased, which to some extent supports the prices of the rare earth market.

 

The Ministry of Industry and Information Technology and the Ministry of Natural Resources have issued the second batch of total control indicators for rare earth mining, smelting and separation in 2023. The total control indicators for the second batch of rare earth mining and smelting separation in 2023 are 120000 tons and 115000 tons, respectively. In 2023, the total control index of rare earth mining, smelting and separation will be 240000 tons and 230000 tons, respectively, an increase of 14.3% and 13.9% compared with 2022. The increase of mining output will correspondingly suppress the growth of rare earth market.

 

Future forecast: Recently, the purchasing sentiment of magnetic material enterprises has declined, and the increase in new orders is limited. It is expected that in the short term, the pressure on rare earth market prices to rise will increase, and the rare earth market will remain mainly volatile; In the medium to long term, there is a lack of primary and renewable supply sources, and dysprosium and terbium oxides will also face shortages. In addition, driven by emerging and traditional demands such as energy-saving motors, industrial robots, wind power, variable frequency air conditioning, and consumer electronics, the global demand for rare earth permanent magnets is expected to continue to grow.

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Gold prices rose first and then fell in October

 

The price of precious metal gold fell first and then rose in October. According to the Commodity Market Analysis System of Business Society, the spot market price of gold on October 24, 2023 was 473.42 yuan/gram, an increase of 2.27% compared to the spot market price of gold at the beginning of this month (October 1), which was 462.87 yuan/gram.

 

Silver prices fell by 0.89%

 

According to the Commodity Market Analysis System of the Business Society, the average silver market price on October 24, 2023 was 5815.33 yuan/kg, an increase of 0.86% compared to the average silver market price of 5766 yuan/kg at the beginning of this month (October 1).

 

Summary of Price Trends of Precious Metals and Crude Oil

 

In the early stage, the correlation between precious metals and crude oil trends is strong. After the second half of 2022, precious metal prices have bottomed out and stabilized, and the magnitude of macro factors affecting them has begun to show differentiation. The trend of precious metals and crude oil began to converge in late March, but after mid April, the trend began to diverge again. Mainly due to the increased impact of risk aversion on the rise of precious metal prices. Recently, crude oil prices have rebounded, and precious metal prices have also followed suit.

 

Comparison of precious metal gold and silver price trends in the past year

 

In 2022, the rise and fall trends of precious metal gold and silver have converged, but the decline in silver was deeper from April to August, and the recent recovery has been more significant. In December, silver continued its strong trend last month, and gold began to consolidate at high levels. In 2023, precious metal gold and silver have consolidated at high levels, with a slight decline in February. Since March, precious metal prices have started to rise. Silver prices began to decline in May, while gold remained relatively strong. In June, gold prices reached a high level and silver prices began to rise. After July, gold prices have become stronger.

 

Fundamental data

 

On October 23rd, the trading volume of gold on the Shanghai Stock Exchange was 12376 kilograms, a decrease of 15.18% compared to the previous trading day; The trading volume of silver was 734662 kilograms, an increase of 25.39% compared to the previous trading day;

 

The gold inventory of the previous exchange was 3222 kilograms, unchanged from the previous trading day. Silver inventory decreased by 53929 kilograms to 1027815 kilograms compared to the previous trading day.

 

The newly announced gold SPDR ETF position was 860.07 tons, a decrease of 3.17 tons from the previous trading day. The position of silver SLV ETF was 13822.13 tons, an increase of 78.38 tons compared to the previous trading day.

 

Hedge sentiment dominates the precious metal market

 

In October, precious metal prices were able to reverse the previous weak trend and show an upward trend, mainly supported by risk aversion sentiment. The escalation of the Israeli-Palestinian conflict has led to an upward trend in the VIX index, and the capital market has started trading in safe haven sentiment in the precious metal market. Although the inflation expectation premium has reached over 2.4% and the 10-year US Treasury bond interest rate is approaching the critical value of 5%, these influencing factors are weakening.

 

Future Market Forecast

At present, the price of precious metals has been fluctuating in the high range after hitting a 10-year high in the early stage. In the early stage, we expected that under the high inflation and high interest rate hikes, the pace of overseas economic recession may lead to a relatively strong sense of risk aversion, which is currently reflected in prices. Some central banks around the world have increased their holdings of gold reserves, which has also provided some support for gold prices.

 

However, as market expectations for the Federal Reserve to maintain high interest rates for a long time continue to rise, the US dollar index has significantly risen, reducing the attractiveness of gold to investors. Previously, the market expected that the Federal Reserve would raise interest rates again within the year, but currently, based on the pricing of the federal funds rate, the probability of raising rates at the November and December interest rate meetings is still low. At the same time, the recent speech attitude of Federal Reserve officials has been relatively biased, and combined with current geopolitical factors, there is still ongoing tension. In the short term, it is expected that precious metal prices will continue to maintain a high level of sideways volatility.

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According to the bulk list data of Business Society, the price of mixed xylene has significantly decreased recently (10.13-10.23). On October 23rd, the benchmark price of mixed xylene was 7510 yuan/ton, while on October 13th, the benchmark price was 8000 yuan/ton, a decrease of 6.12%.

 

Stable domestic inventory and low pressure on xylene supply

 

Stable inventory of mixed xylene at the port. It is understood that as of October 20th, the inventory of xylene in East China was around 26000 tons; The inventory of xylene in South China is around 3000 tons.

 

Asia US arbitrage significantly narrows the price decline of isomeric grade xylene in Asia

 

In the fourth quarter, the demand for mixed blending in North America continued to decline, and the Asia US interest rate difference narrowed significantly. The prices of isomeric grade xylene in Asia continued to decline. As of October 23rd, the price of Asian isomeric grade xylene is between 890 to 891 US dollars per ton.

 

Since October, the overall international crude oil price has decreased, and the support for xylene cost has weakened

 

Since October, the overall international crude oil price has declined, and the cost support for xylene has weakened. As of October 20th, the WTI12 contract closed at $88.30 per barrel, with a settlement of 88.08 yuan per barrel; The Brent 12 contract closed at $92.43 per barrel and settled at $92.16 per barrel.

 

Downstream PX starts stable xylene with rigid support needed

 

The domestic supply of paraxylene is normal, and the domestic PX operating rate is over 70%. However, during the maintenance of some paraxylene units, spot supply is relatively normal, and the crude oil price trend is rising. The external price trend of PX is mainly volatile. As of the 19th, the closing price in Asia is 995-997 yuan/ton FOB South Korea and 1020-1022 dollars/ton CFR China. Recently, the operating rate of PX plants in Asia has been mainly fluctuating, and overall, the operating rate of xylene plants in the Asian region is around 70%.

 

Domestic mixed blending demand is gradually entering the off-season and xylene demand support is weakening

 

Since the fourth quarter, the domestic mixed blending market has entered a low season, coupled with downstream replenishment behavior before the Double Festival, downstream inquiries have been light after the festival, and the demand for toluene mixed blending continues to weaken. Recently, the operating load of refineries in China has exceeded 70%, while the operating load of local refineries in Shandong is around 65%.

 

In terms of gasoline, there has been no holiday support recently, with a decrease in self driving frequency and driving radius. The demand for gasoline has decreased, and some businesses are moderately restocking on dips. The purchasing sentiment is not positive, and some refineries have increased their inventory. The decline in gasoline is significant. In terms of diesel, the construction of outdoor infrastructure and engineering projects has maintained a high level, coupled with the support of demand for open sea fishing and agricultural autumn harvests, logistics and transportation have shown active negative performance. The overall demand for diesel is relatively stable, so the decline in diesel is relatively small.

 

Future forecast: In the short term, the international crude oil market is volatile, with strong uncertainty in the cost of xylene. Currently, port inventory is stable, and overall, the price of mixed xylene will fluctuate in a narrow range in the short term.

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According to the Commodity Market Analysis System of the Business Society, as of October 20th, the average price of epoxy propane enterprises was 9475.00 yuan/ton, which is unchanged compared to Monday’s price.

 

This week, the epoxy propane market remained stable and organized. At the beginning of the week, the raw material propylene market was relatively strong, with increased cost support, acceptable supply side shipments, and gradually easing inventory pressure. Downstream wait-and-see followed up appropriately, and the focus of negotiations in the epoxy propane market was mainly on stability. On the 20th, the mainstream quotation in the Shandong epoxy propane market was around 9250-9400 yuan/ton. The raw material propylene market showed weak performance, and the cost side still had support. Factory shipments were average, and the market wait-and-see atmosphere was strong.

 

Upstream Propylene: According to the Commodity Market Analysis System of Business Society, the Shandong propylene market maintained stable operation on October 19th, with a mainstream market quotation of 7200-7250 yuan/ton, which provides strong support for the epoxy propane market.

 

The epoxy propane analyst at Business Society believes that the current cost support is still acceptable, and the supply side is temporarily stable. The demand side is following up and watching to slow down. It is expected that in the short term, the epoxy propane market may operate steadily, showing signs of weakness, and more attention needs to be paid to market news guidance.

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According to the Commodity Market Analysis System of Business Society, in mid October, terminal rigid demand decreased, and the hydrogen peroxide market continued to decline, with a drop of over 1%. On October 16th, the average market price of hydrogen peroxide was 1533 yuan/ton. On October 19th, the average market price of hydrogen peroxide was 1516 yuan/ton, with a price drop of 1.09%.

 

Demand Drops, Hydrogen Peroxide Market Declines

 

In mid October, the demand for stocking in the terminal printing and papermaking industry fell, and the price of hydrogen peroxide slowed down after experiencing a significant decline in the previous period. The mainstream quotation for 27.5% hydrogen peroxide in Shandong region dropped to 1500 yuan/ton, while the mainstream quotation for 27.5% hydrogen peroxide in Hebei region dropped to 1550 yuan/ton, and the mainstream quotation for 27.5% hydrogen peroxide in Anhui region dropped to 1500 yuan/ton. The overall price of 27.5% hydrogen peroxide in China has dropped by about 50 yuan/ton.

 

Li Bing, a chemical analyst at Business Society, believes that terminal demand is poor, and the future market of hydrogen peroxide is under pressure.

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