According to the commodity market analysis system of Business Society, the price of polyformaldehyde in Shandong has been fluctuating and consolidating recently. This week, the average production price of polyformaldehyde in Shandong was 4775.00 yuan/ton, an increase of 0.79% month on month and a decrease of 8.83% year-on-year.

Upstream methanol situation: The domestic methanol market has seen a narrow decline. In terms of supply, global coal supply is stable, domestic imports have increased, and the increase in domestic demand is not enough to support coal prices to continue operating at high levels; In terms of demand, the temperature has risen, the civilian electricity load has fallen, and the overall pressure on power plant inventory is relatively small. Currently, terminals mainly rely on long-term cooperative replenishment, and replenish warehouses according to demand. The demand for coal in the market is relatively flat, and the overall sentiment is more wait-and-see. It is expected that the short-term thermal coal market will maintain a volatile and weak operation. The cost side of methanol is influenced by bearish factors.

In recent times, the methanol market has been weak and volatile, with poor cost support. Enterprises are producing normally, and downstream procurement is maintaining strong demand. Business Society’s polyformaldehyde analysts predict that prices may slightly decline.

This week, the supply side of polyvinyl alcohol has shown positive support and stability, with the price center shifting upwards. As of April 10th, the benchmark price of polyvinyl alcohol for Shengyishe was 12266.67 yuan/ton, an increase of 0.54% compared to yesterday’s (12200.00 yuan/ton).

Supply side:

This week, the acetic acid market is relatively strong and upward. At the beginning of the week, the price of acetic acid fell to a relatively low level, and downstream market purchases increased. The mentality of enterprises was bullish, and the price of acetic acid rebounded after hitting the bottom. Subsequently, the inventory of manufacturers gradually decreased. With the improvement of market trading atmosphere, enterprises had a strong intention to rise, and with the support of mentality, the price of acetic acid continued to rise. As of March 29th, the average market price of acetic acid was 3100 yuan/ton, an increase of 100 yuan/ton compared to the price of 3000 yuan/ton on March 25th, an increase of 3.33%, and the price remained unchanged from the beginning of the month.

Recently, the calcium carbide market has been fluctuating and rising, and the increase in demand is the main factor contributing to the price increase. However, with the continuous updating and implementation of PVC maintenance plans, especially the increase in external sales of supporting calcium carbide, there is an expectation of a significant increase in calcium carbide supply by the end of the month. As of April 10th, the benchmark price of Shengyishe calcium carbide was 3016.67 yuan/ton, an increase of 0.56% compared to the beginning of this month (3000.00 yuan/ton).

Overall

Overall, the recent trend in the cost of polyvinyl alcohol has been relatively warm, providing slight positive support for the market. The supply side support is limited, and it is difficult for prices to continue to rise. Currently, intermediaries have no intention of lowering prices. In some regions, the equipment is restarting, and coupled with the continuous low inventory levels of various companies in the market, although the supply is stable in the face of favorable market support, the overall situation of weak demand has not significantly improved. Intermediaries are stocking up on demand, and downstream demand is purchasing, resulting in a flat trading atmosphere.

According to the Commodity Market Analysis System of Business Society, from April 1st to 9th, the price of asphalt in Shandong Province increased from 3578 yuan/ton to 3639 yuan/ton, an increase of 1.72%, a month on month increase of 0.95%, and a year-on-year decrease of 4.78%. The market is showing a strong situation in the north and weak in the south, with prices in many northern regions rising. This is mainly due to the strong operation of international crude oil, which has driven up costs and increased demand for temperature recovery. Business owners are reluctant to sell and are pushing up prices; The prices in the southern region are relatively weak, and the decrease in prices from major production enterprises has driven the market price downward.

On the supply side, the comprehensive operating rate of the asphalt industry has decreased compared to the previous month for major production enterprises, which has had a positive impact on the supply side.

On the cost side, in terms of crude oil: International oil prices have risen this week, with the main positive factors being the attack on the Iranian Embassy in Syria, market concerns that the situation in the Middle East may further escalate, and potential supply risks increasing. As of April 8th, the settlement price of Brent crude oil futures main contract was $90.38 per barrel, a decrease of $0.79 or 0.9%.

On the demand side, the demand for asphalt varies slightly in different regions. Due to the influence of large-scale rainfall in the southern region during the Qingming Festival, the market demand for asphalt is slightly flat, while scattered demand is mainly in the northern region. Many inquiries for low-priced resources have increased demand due to sunny weather, which provides some support for shipment. The demand side of the asphalt market has a mixed impact.

As of the close of April 9th, the petroleum asphalt futures market has risen. The main asphalt contract 2406 opened at 3820 yuan/ton, with a highest price of 3834 yuan/ton and a lowest price of 3805 yuan/ton. It closed at 3815 yuan/ton in the last trading day, an increase of 8% or 0.21% compared to the previous settlement day. The trading volume was 106783 lots, and the holding amount was 262115 lots, with a daily increase of 2354 lots.

In the future market forecast, international crude oil will continue to rise, with significant support for asphalt costs; Due to the influence of large-scale rainfall in the southern region during the Qingming Festival, the market demand for goods has been slightly flat, while the demand for sunny weather in the northern region has increased, providing some support for shipments. The asphalt analyst from Business Society predicts that the domestic asphalt market will tend to strengthen and consolidate in the short term.

Recently, PVA trading volume has been very low, coupled with increased inventory pressure. The market is gradually showing a state of price with no market, and the significance of price changes is not significant. Most of them are fluctuating and consolidating. As of April 8th, the benchmark PVA price of Shengyishe is 12200.00 yuan/ton, a decrease of 1.21% compared to last week’s (13500.00 yuan/ton).

Supply side:

The market price of vinyl acetate fluctuated and fell. The current price of acetic acid, the raw material for vinyl acetate, has slightly increased. As of April 8th, the benchmark price for acetic acid in Shengyishe was 3150.00 yuan/ton, an increase of 1.61% compared to the beginning of this month (3100.00 yuan/ton). The price of calcium carbide in the market has partially declined, and the cost side support is insufficient; Mainstream manufacturers in East China have parked their equipment, and the market’s spot resources have decreased compared to before. However, downstream demand continues to decline, and downstream purchasing enthusiasm is poor, resulting in limited actual market transactions; Under the constraint of weak demand, market prices are unsupported; The mainstream negotiations for the vinyl acetate market in South China range from 6100 to 6400 yuan/ton, while the mainstream negotiations for the high and low end of the vinyl acetate market in East China range from 6100 to 6200 yuan/ton.

Demand side:

The downstream market is showing a weak situation, and the market is gradually starting to operate, but the overall situation is not as good as in previous years. The usage has not improved, and the purchasing willingness is not good, making it difficult to increase the volume. Enterprises are offering discounts to sell. Overall, the demand side still slows down, and the negative impact on the PVA market. Polymer additives, fabric slurries, and adhesives are expected to increase in demand due to weather changes and the expected increase in terminal construction. The market negotiation atmosphere will warm up, and demand may improve. Downstream demand is expected to rebound, which will have a certain stimulating effect on the PVA market and provide support and increase.

Although the current PVA price has been repeatedly lowered, there is still profit margin. Some manufacturers sell at low prices, but the overall trading volume in the PVA market has been affected by light trading. Traders and downstream traders are cautious in their operations. After the price reduction, the market’s bottom buying sentiment is highlighted, and it is expected that the purchasing power of domestic and foreign spot goods will strengthen, boosting market confidence.

In summary, PVA supply is relatively sufficient; In terms of demand, downstream factories purchase according to demand and still maintain a cautious attitude towards procurement. Currently, the main downstream factories are producing normally, and the operating rate of terminal factories is low. Procurement still lacks enthusiasm, and operators are more cautious in procurement; At present, although supply side factories have accumulated inventory, raw material prices are slightly supported, and it is expected that PVA prices may consolidate next week or there is a possibility of an upward trend in the short term. The expected transaction center is between 5900-6600 yuan/ton.

1、 Trend analysis

According to monitoring data from Business Society, copper prices rose strongly on April 8th, rising by over 2000 yuan per day to 75478.33 yuan/ton, an increase of 8.99% from the beginning of the year and a new high in nearly two years.

Duo Zhong Li Hao:

During holidays, there is a slight increase in external market sentiment

During the Qingming Festival holiday, in addition to the sharp rise in gold and silver prices, international non-ferrous metals also surged, with London copper rising 2.99%, reaching a new high in nearly a year.

Federal Reserve’s expectation of interest rate cuts

The expectation of the Federal Reserve’s interest rate cut has driven commodity prices soaring. The Federal Reserve’s March interest rate meeting, while keeping the federal funds rate unchanged, once again clarified that interest rates are currently at the peak of this cycle and are expected to cut rates this year. The Federal Reserve has hinted at three rate cuts this year. Under the continuous stimulation of interest rate cuts, prices of commodities such as crude oil, gold, and non-ferrous metals have also continued to strengthen.

Macro data is good

In March, China’s manufacturing PMI rebounded beyond expectations, with the Purchasing Managers Index (PMI) of 50.8%, an increase of 1.7 percentage points from the previous month, above the critical point, indicating a rebound in the manufacturing industry’s prosperity; In non manufacturing business activities, the PMI of the construction industry was 56.2%, an increase of 2.7 percentage points from the previous month; The PMI of the service industry was 52.4%, an increase of 1.4 percentage points from the previous month. Verifying that the economy is stable and improving, the demand side is expected to rise, and with the performance disclosure period in April, some cyclical products in the bottom or upward range of the business cycle are receiving market attention, driving the overall upward trend of the non-ferrous sector.

In March 2024, the global manufacturing PMI was 50.3%, an increase of 1.2 percentage points from the previous month, ending the 17 consecutive months of operating below 50% and returning to the expansion range of over 50%. The recovery of the manufacturing industry is expected to boost demand for industrial metals such as copper, aluminum, lead, zinc, and nickel.

AI data centers will become a new growth point for copper demand

Morgan Stanley stated in its latest report that with the rapid development of AI technology, copper demand will significantly increase, with data centers becoming a new growth point for copper demand. Da Mo wrote in the report that from 2024 to 2027, global data center demand for electricity will grow at a compound annual growth rate of 18%. The demand for copper in data centers may increase from 200000 to 500000 tons per year in 2023 to 500000 to 1.2 million tons in 2027, with a compound annual growth rate of 26%.

By 2027, data center demand for copper may account for 3.3% of global copper demand (compared to only 5.2% for electric vehicles), which will drive up copper prices and have a profound impact on the global copper market.

Fundamentals:

Supply side: With domestic smelting enterprises starting maintenance in April, capacity release is restricted, and copper processing fees have not stopped falling. There may be additional production cuts in the future, which further raises market concerns about supply shortages.

On the demand side, terminal consumption continues to rebound, and the overall recovery expectation for the peak season of the “Silver Fourth” is gradually increasing. Among them, the cumulative investment growth rate of the power grid is at a neutral position in the same period of history, with a significant increase in both domestic and export production of air conditioners, which is expected to drive the rapid repair of demand for copper rods and pipes. At the same time, the restructuring of overseas supply chains has brought about a huge incremental market, and demand will continue to improve.

LME copper inventory slightly decreased

According to the above chart, LME copper inventories have slightly declined recently. As of the 8th, LME copper inventory was 115525 tons, a decrease of 34.79% from 165700 tons at the beginning of the year.

Comparison chart of annual copper prices

According to the annual price comparison chart of copper, the trend of copper prices in April has mostly improved in the past five years.

Future Market Forecast:

Goldman Sachs believes that the copper market is at an important seasonal turning point, and the refined copper market will gradually lower inventory levels in the second quarter. In the context of strong demand and continuous supply constraints in China, the copper market will gradually shift towards a supply shortage pattern. The sustained supply shortage will support copper prices, and it is expected that copper will rise to $10000 per ton by the end of 2024!

On the whole, although the US non farm data in March showed a bright rise, driving the US dollar and US bond yields to rise and inhibiting copper prices, the domestic manufacturing PMI data in March was good, the copper supply side was reduced, and the demand was strong. In particular, the AI data center will become a new growth point of copper demand, just like injecting a “shot in the arm” into the copper market, climbing the historical peak like a flying eagle. Later, with the landing of special bonds, additional treasury bond, ultra long term special treasury bond, PSL and other broad financial instruments, domestic demand is expected to continue to improve. Goldman Sachs expects copper to rise to $10000 per ton by the end of 2024, which means there is still 7% room for copper prices to rise. It is expected that copper prices will remain strong in the short term.