1、 Price Review
This week (July 29th August 4th), the sulfur market showed a trend of “stabilizing first and then falling”. As of August 4th, the benchmark price of sulfur was 9169.00 yuan/ton, a slight decrease of 0.18% from the beginning of the month. From the perspective of intraday fluctuations, the daily decline on August 4th reached 1.26%, breaking the previous days’ sideways stalemate.
2、 Supply side: Low port inventory, lack of price guidance for refinery bidding and unsuccessful bidding
In terms of inventory, the national port sulfur inventory was 879600 tons, a month on month decrease of 1.08% and a significant year-on-year decrease of 66.22%. The port inventory is at a relatively low level in recent years, forming a certain bottom support for the market.
An important event on the supply side, Dalian Refinery released a tender for 6300 tons of sulfur for future supply, with a delivery date of October 7-10 and a bidding base price of 9110 yuan/ton. The final bid was unsuccessful and no effective transaction price was generated. As an important market indicator, the failure of bidding further increases the wait-and-see mentality within the theater, and the market lacks a clear price anchor point.
3、 Spot market: Trading is sluggish, and the game between buyers and sellers is intensifying
During the week, the price of granular sulfur at ports slightly decreased, with Zhenjiang Port’s granular sulfur at 9150 yuan/ton and Dafeng Port’s granular sulfur at 9130 yuan/ton, a synchronous decrease of 10 yuan/ton compared to the previous day.
The holding enterprise has shipping demands, but the willingness to proactively make external offers has weakened; Downstream buyers are only willing to accept goods at a low price, making it difficult to achieve bulk transactions, and the market only has sporadic small order negotiations. Market research sentiment shows that the proportion of bullish and bearish views in both upstream and downstream markets is only 17%, and the vast majority of practitioners choose to remain flat and wait. The overall market presents a situation where inventory is supported, but demand follow-up is weak, with strong quotations and weak transactions.
4、 Downstream demand: The phosphate fertilizer market is weak, and the raw material pull is limited
The downstream phosphate fertilizer industry as a whole maintained a weak operation and failed to bring strong consumption pull to sulfur.
As of August 5th, the benchmark price of ammonium phosphate was 4450.00 yuan/ton, a decrease of 0.37% compared to the beginning of this month (4466.67 yuan/ton). The market is weakly consolidating, and downstream only needs to replenish inventory. Although there have been a few tender releases, the psychological price of procurement is low, and actual orders are mainly negotiated on a case by case basis;
The ex factory price of 64% diammonium phosphate is 48004850 yuan/ton, but the release of terminal demand is slow, and inquiries and transactions are relatively limited. The factory operation tends to be conservative. There is no centralized replenishment action at the phosphate fertilizer end, and the consumption power of sulfur raw materials is insufficient.
5、 Market prediction
Short term low inventory in ports has a bottoming effect on prices, but the short-term indicators of spot trading technology have weakened. Coupled with the need for downstream phosphate fertilizer demand to recover, the current situation of insufficient follow-up of buying orders is difficult to improve quickly. Refinery bidding failed due to lack of direction guidance, and the wait-and-see attitude of operators continues.
Overall, analysts believe that sulfur may continue its weak consolidation pattern in the short term. Focus on tracking the shipment dynamics of refineries, changes in port inventory, and the pace of raw material replenishment for phosphate fertilizer enterprises in the future.

Recently, the price of lithium carbonate has fluctuated downward and adjusted weakly. As of August 4th, the benchmark price of battery grade lithium carbonate was 139000 yuan/ton, a decrease of 16.27% from the previous month. The fundamentals of lithium carbonate continue to recover and the supply and demand pattern is relatively tight, but why does the market price continue to fluctuate and decline, and break out of the special trend of “strong reality, weak price”.
Strong fundamentals
The strong characteristics of the current lithium carbonate fundamentals are very clear. On the demand side, the two core tracks of new energy vehicles and energy storage continue to thrive, with downstream battery manufacturers receiving full orders. In August, the month on month growth rate of domestic battery companies’ production scheduling remained stable at 6% -8%. The demand for power batteries has steadily recovered, with high capacity utilization rates and stable support for demand. The overall demand resilience far exceeds market expectations. The supply side disturbance continues to ferment, and multiple factors such as policy control of overseas lithium mining resource countries, geopolitical conflicts, extreme weather in Argentina, and centralized maintenance of domestic lithium salt enterprises have led to limited short-term lithium salt supply growth. At the same time, the industry’s inventory continues to decrease, and the market has achieved 12 consecutive weeks of destocking. As of the week ending July 30th, the social inventory has dropped to 114300 tons, and the degree of destocking of social inventory continues to expand. The overall inventory structure presents differentiated characteristics, with downstream and circulation links continuously digesting inventory, while only upstream smelters have slightly accumulated inventory. The overall inventory pressure in the industry continues to ease, and there is no negative drag on the spot market due to accumulated inventory.
Long term pessimistic expectations
Against the backdrop of overall improvement in short-term supply and demand, inventory, and demand, the core reason for the continued weakness of lithium carbonate prices is that market funds have overdrawn pessimistic expectations in the long run, and the current market trend is completely dominated by the logic of forward supply and demand. The optimistic expectations of the previous surge in energy storage demand in the market have gradually been realized with the mid year performance of lithium battery companies. After the positive results are implemented, funds have begun to shift towards trading negative logic, with a focus on two major dimensions: first, the slowdown in long-term demand growth has raised doubts about the sustainability of subsequent energy storage installation demand, and the market no longer recognizes the demand expectations of high-speed growth in the early stage; Secondly, the long-term supply pressure will be concentrated and released, and the pace of new production capacity in the industry will accelerate. The future loose supply and demand pattern has basically become a market consensus.
Overall, the current lithium carbonate market is in a deep game stage of short-term strong reality and long-term weak expectations, which is also the core source of market differentiation. In the short term, the inventory structure of continuous destocking, the steadily recovering downstream demand, and the tight spot supply and demand pattern have built a solid bottom for spot prices, greatly limiting the downward space for prices; However, in the long-term dimension, weak demand growth and loose expectations of supply increment release, coupled with high valuation pressure from the industrial chain, continue to suppress the prices of far month contracts, resulting in a sustained weak and volatile overall market.
Looking ahead to the future market trend, it is difficult for lithium carbonate to show a unilateral trend, and it is highly likely to maintain a differentiation pattern of near strong and far weak. With the gradual release of pessimistic market sentiment and the support of solid short-term fundamentals, prices are expected to gradually stabilize and operate towards strength; However, the far month contract will continue to be suppressed by the expectation of loose supply and demand in the future, and the valuation repair market has not yet ended. Specific attention still needs to be paid to changes in market supply and demand.

The domestic maleic anhydride market saw a significant increase in July, but slightly declined at the end of the month. As of July 31st, the average price of maleic anhydride quoted was 8600 yuan/ton (including tax), an increase of 18.62% from 7250 yuan/ton on July 1st.
Supply side: In July, the supply and demand pattern of the domestic maleic anhydride market shifted from balance to tight balance: there was significant differentiation on the supply side: the integrated butane process factory was fully produced but was closed and reluctant to sell, and the enterprise prioritized the supply of long-term cooperative resin factories, BDO manufacturers, and fixed export orders; The benzene process unit has been continuously shut down due to cost pressures, and the production of new capacity has fallen short of expectations. In addition, some units in the Shandong region have undergone maintenance, resulting in a significant reduction in domestic spot supply. Manufacturers have strong bullish expectations, and their offers continue to rise, making it more difficult to obtain spot goods in the market. In terms of inventory: Social inventory remains low, and the cost of holding goods for traders increases accordingly. Most traders have prices but no goods, while a few traders with goods focus on protecting long-term cooperative customers. As of July 31st, the solid anhydride market in Shandong Province operates around a factory price of 7800-8000 yuan/ton, while the liquid anhydride market operates around a factory price of 7100-7500 yuan/ton.
Upstream: In July, the n-butane market in Shandong saw a significant increase, influenced by international geopolitical tensions and the rise in crude oil prices; Internationally, the price of CP butane in Saudi Arabia in July was $600/ton, a decrease of $220 from June, resulting in a significant reduction in imported gas costs.
Downstream: July is in the traditional high temperature off-season, and domestic demand for fiberglass, anti-corrosion building materials, and artificial stone terminals is weak. Most resin companies schedule production according to demand, and overall production remains low. After the continuous and significant increase in maleic anhydride, the production cost of resin has risen, but the terminal transmission is not smooth, and the profit of resin enterprises is under pressure. The willingness to chase after high priced maleic anhydride is weak, and multidimensional demand replenishment is necessary. In July, the BDO market rose, and the raw material costs of maleic anhydride BDO enterprises continued to rise, compressing production profits and increasing manufacturers’ willingness to raise prices.
Analysts believe that in late July, leading companies such as Qixiang Tengda and others in the maleic anhydride industry will be closed down and reluctant to sell, resulting in a tightening of spot circulation. In August, the closure may be lifted and spot sales may resume. Coupled with the expectation of restarting the maintenance equipment in the early stage, the market circulation of goods is expected to gradually increase; From the demand side, unsaturated resins were still in the traditional off-season of high temperatures in early August, and the downstream of UPR and BDO had weak willingness to maintain rigid demand procurement and chase after price increases. Only near the end of the month, there is a slight demand recovery expected from traditional stocking, making it difficult to form a sustained demand pull; In terms of raw material n-butane, Saudi Arabia introduced CP in August, with a price of 640 US dollars per ton for butane, an increase of 40 US dollars from July. The tense situation in the Middle East has supported the domestic n-butane market. It is expected that the domestic maleic anhydride market will experience high-level fluctuations and a slow downward shift in focus in August.

In July, the domestic ABS market saw a low-level upward trend, with most spot prices of various grades stabilizing after rising. As of July 31st, the average price of ABS sample products was 9616.67 yuan/ton, an increase of 10.75% compared to the beginning of the month.
Fundamental analysis
Supply level: As we enter July, the domestic ABS industry’s equipment load remains stable with small fluctuations, with an overall operating rate of 58% at the end of the month and an average weekly output of around 125000 tons. The inventory location of finished products has been digested and reduced to about 200000 tons. The shipment situation of aggregation plants within the range has slightly rebounded, and there is no expectation of a contraction in production in the short term. Overall, the support for spot prices from the ABS supply side in July is still acceptable.
Cost factor: In July, the United States and Iran reversed their previous positive trend, and there were fluctuations in the Middle East ceasefire agreement. The risk of shipping recovery in the Strait of Hormuz has increased, and there are concerns in the market about international crude oil supply, leading to a rapid return of geopolitical premiums. Combined with the low start of production in the domestic pure benzene market and the tight supply pattern, the price of pure benzene has risen strongly, driving styrene to follow suit. However, the supply and demand expectations are still relatively loose, and the upward space for prices is limited. It is expected that the styrene market will fluctuate weakly in the short term.
Although the acrylonitrile market was suppressed by the combination of high operating rates and low consumption in the first half of the month, the rise in crude oil has provided some support for it. Approaching mid month, the market stopped falling and turned upward. In addition, in the second half of the month, the Zhenhai Refining and Chemical Plant will reduce its load, resulting in a reduction in supply in the East China region. And there will be a 20 day shutdown and maintenance plan for Liaoning Jinfa Technology’s 260000 ton acrylonitrile production line in mid August, which will lead to a reduction in supply and boost the market in the short term. However, the new production capacity of 660000 tons of Zhejiang Petrochemical and 130000 tons of Sino British Petrochemical will be successively implemented, and the oversupply in the future will continue to envelop the acrylonitrile market. At the same time, as demand levels off, the price increase of acrylonitrile in the future may be limited.
The cost sentiment support for butadiene in early July, coupled with the tightening of spot circulation on the market, has heated up the bullish atmosphere in the market, and prices continue to rise; But as raw material prices rise, downstream capacity continues to weaken, and high priced source transactions gradually cool down. In the middle and late months, the positive news on the cost side subsided, negative feedback from downstream emerged, and the market’s willingness to chase higher prices quickly cooled down, causing the market to fluctuate downward from a high level. Suggestions for future market trends include paying attention to the rebalancing of upstream and downstream profits, as well as the fulfillment of traditional demand during peak seasons.
On the demand side, there were limited changes in the start of work for downstream ABS enterprises in July. The main terminal appliance industry is still in the off-season, with poor consumption levels of appliance casings and no improvement in the profitability of terminal enterprises. The relatively concentrated partial replenishment operations in the first ten days have led to increased transaction volume. However, after the stocking is met, the buyer camp’s sentiment returns to resistance to high priced sources, and they tend to take goods as needed. The willingness to chase price increases on the market is average, and merchants follow the market and withdraw funds. Overall, the demand side showed a slight lack of momentum in July.
Future forecast
After the domestic ABS market rose in July, it sorted out. The cost and material trends within the range are relatively strong, and the production load changes of the aggregation plant are relatively narrow. Inventory digestion is still acceptable, and on-site supply remains within a sufficient range. The profit situation of ABS unit price within the range is average, and the resistance to high priced goods at the end of the month has increased. The current market has limited mobility.

In July, the mainstream market trend of polyacrylamide (CPAM, cationic, molecular weight 12 million, 10-30 ion degree) in China was weak. On the 29th, the main market price was around 13960 yuan/ton, a decrease of 1.41% from the beginning of the month at 14160 yuan/ton.
The core of polyacrylamide production relies on upstream raw materials such as acrylonitrile. In July, the acrylonitrile market first fell and then rose. As of July 29th, the average price of acrylonitrile was 10533.33 yuan/ton, an increase of 4.46% from the price of 10083.33 yuan/ton on July 1st. At present, major factories in East China are maintaining low load operation, and coupled with the planned shutdown and maintenance of a 260000 ton acrylonitrile plant in Liaoning for about 20 days in mid August, there is still an expectation of further reduction in supply.
On the downstream side, downstream demand continues to weaken, and the amount of sewage sludge generated during the rainy season is lower than expected. Paper and chemical sludge disposal enterprises have reduced their procurement volume, and the market has sufficient spot circulation. Factories have proactively lowered their quotations to promote shipments; Traders’ inventory consumption is slow, leading to a rise in bearish sentiment in the market as they follow the decline in shipments to recoup funds.
Market forecast: The current rise in the cost side acrylonitrile market provides support for the price of polyacrylamide. The high temperatures on the demand side continued in August, and there are currently no favorable factors to boost the market. Downstream demand during the off-season is difficult to quickly recover in the short term, and the pattern of high inventory and sufficient spot goods for enterprises will continue. It is expected that the polyacrylamide market will mainly consolidate in August.