This week (10.23-10.29), the market for butadiene rubber rose. Data shows that as of October 29th, the price of butadiene rubber in the East China region was 16970 yuan/ton, an increase of 3.22% from last Friday’s 16440 yuan/ton. During the week, the ex factory prices of CPC Northeast Daqing and Jinzhou were raised by 300 yuan/ton to 16800 yuan/ton, while the mainstream prices in the Jiangsu and Zhejiang markets of Daqing, Sichuan, and Dushanzi were reported at 16850-17100 yuan/ton.
During the week, the raw material butadiene rebounded significantly. As of October 29th, the price of butadiene was 14200 yuan/ton, an increase of 5.71% from last Friday’s 13433 yuan/ton. The geopolitical risks in the Middle East have pushed up the crude oil hub, with naphtha following suit and strong reluctance among spot traders to sell. Based on the current price of butadiene, butadiene rubber only makes a small profit, and the factory has a strong willingness to raise prices.
The domestic production rate of butadiene rubber remains at a relatively low level of around 6.3%, and the market supply is relatively tight, which provides some support for butadiene rubber.
Recently, the downstream tire industry has gradually resumed production, with semi steel tire production rates around 6.50% and all steel tire production rates around 5.90%, showing a month on month rebound but a year-on-year decline. Overall, on-demand procurement has limited acceptance of high priced Shunding, which has a certain negative impact on the Shunding rubber market.
Market forecast:
The current price of butadiene rubber is firmly above the moving averages of each cycle, and the 5/10/20 daily moving averages are in a long position. After a slight increase in short-term prices, the support of the moving average remains, and the bullish structure is intact. Predict short-term high-level fluctuations and rely on the support of the moving average to operate relatively strongly. If it falls below the 5-day moving average, the risk of a pullback will increase.

From a fundamental perspective, it is expected that the price of butadiene rubber will fluctuate strongly at a high level in the short term, with the price center following the fluctuations of crude oil and butadiene. Cost support and low inventory form the bottom, but weak year-on-year demand for tires and accumulated inventory from traders will suppress upward potential. If crude oil falls back or there is a new volume of butadiene, there is a risk of price correction; On the contrary, if geopolitical risks continue, they are prone to surge.

The price of isobutyraldehyde fluctuated and fell in October
As of October 28th, the domestic price of isobutyraldehyde was 8033.33 yuan/ton, a fluctuating decrease of 5.12% compared to the price of 8466.67 yuan/ton on October 1st. In October, the isobutyraldehyde market fell from a high level and turned from strong to weak. In October, the isobutyraldehyde market was initially sideways at a high level, but fell back under pressure in the middle and late stages, turning from strong to weak, mainly dragging down the weakness of downstream neopentyl glycol from the main force; The supply side has device maintenance support, but the demand side lacks follow-up on buying orders, resulting in increased bargaining space for actual orders.
Cost side: limited support for propylene oscillation consolidation raw materials
On October 28th, the propylene price was 10927.67 yuan/ton, a fluctuating increase of 12.57% compared to the propylene price of 9707.67 yuan/ton on October 1st. In October, propylene fluctuated within a range without a unilateral surge, and there was no strong upward momentum on the cost side; At the same time, there was no deep drop, which formed a certain bottom support for isobutyraldehyde. Cost is not the main trend of this month’s market, and supply and demand (neopentyl glycol) are the main support for isobutyraldehyde’s rise and fall.
Demand side: New pentanediol drags down the market
The largest downstream consumption is neopentyl glycol. In October, the neopentyl glycol market continued to weaken, and major factories such as Wanhua lowered their quotations for bulk water for multiple rounds. The demand for polyester and powder coatings downstream of neopentyl glycol was flat, with average orders. The profit of neopentyl glycol factories was compressed, and they actively reduced the cost of raw material procurement, lowered prices, and purchased isobutyraldehyde according to demand. The market is’ afraid of heights+wait-and-see ‘, no longer chasing after price increases, buying only low-priced goods, and high priced transactions are stagnant.
Supply side: Partial maintenance, but expected incremental control
Isobutyraldehyde is a by-product of the co production of butanol and octanol, with production following the start of butanol and octanol production. There is little independent expansion, high industry concentration, and no large-scale shutdown maintenance; Part of the equipment is parked for maintenance, reducing some of the circulating goods and providing a bottom line for prices; In mid to late October, Wanhua Penglai isobutyraldehyde plant was successfully put into operation, with new production capacity added and maintenance equipment restarted, resulting in slow accumulation of shipping pressure. The expectation of loose supply directly suppressed the buying enthusiasm, and the bearish sentiment in the market significantly increased.
Market Overview and Forecast
Analysts believe that the main contradiction between supply and demand and cost in the future isobutyraldehyde market has not yet shown a reversal signal, and bearish factors still dominate. The incremental impact of Wanhua Penglai’s new production capacity, the expected restart of the Dawn device, and the supply side’s suppression of prices are likely to continue. On the demand side, it is difficult to see strong replenishment momentum for neopentyl glycol in the short term. The market for isobutyraldehyde is mainly weak, and there is still room for manufacturers to lower their quotes. Negotiations for actual orders continue to yield discounts. However, as propylene prices remain high, the cost side will continue to provide bottom support, and factories’ willingness to further significantly lower prices will be restrained. Overall, the isobutyraldehyde market will continue to maintain a weak and volatile trend in the future, but the downward trend may ease and the probability of a deep decline is limited.

In October, lithium carbonate experienced a rapid decline. As of October 27th, the benchmark price of battery grade lithium carbonate was 101000 yuan/ton, a decrease of 18.8% from 120000 yuan/ton at the beginning of the month. This sharp decline is not a sudden reversal of spot supply and demand, but rather a rapid cooling of sentiment in the market due to the expectation gap of “continued destocking in the near end and a shift towards easing in the long term”.
1、 Policy wise: Long term demand has a bottom, short-term expansion is limited
Seven departments jointly issued the “15th Five Year Plan” for the development of the new battery industry, clarifying the industry development goals by 2030 and providing policy endorsement for the long-term demand space of new energy vehicles and energy storage. This means that the demand narrative for lithium carbonate is supported by industrial planning in the medium to long term, and the industrial logic of continued price decline is not sufficient. But at the same time, it should be noted that policy documents have clear constraints on low-level redundant construction and blind expansion, and the space for disorderly and excessive supply on the supply side is strictly targeted by policies. Under the interweaving of long and short positions, the role of policies in dealing with prices is to block downward space in the long term, and to not support unilateral strengthening in the short term.
2、 Supply side: Production recovery combined with long-term mineral source expectations
From the perspective of actual output, the domestic production of lithium carbonate in September increased by 7.7% month on month. Although it was slightly lower than the production guidance at the beginning of the month, the absolute level is still recovering; Institutions expect a slight increase in production scheduling in October compared to the previous month, and the direction of domestic supply side easing has been established. What has a greater impact on the market is the long-term variables: Jianxiawo Mine has entered the environmental impact assessment approval public announcement, and the market’s expectations for the resumption of production of major mines and the gradual release of new mineral sources continue to rise. This is the core reason for the limited price elasticity in this round.
3、 Demand side: Insufficient color during peak season, rebound mainly in pulses
The demand structure shows obvious differentiation. The resilience of the energy storage field is still acceptable, and the production of power batteries has improved compared to the previous period. Downstream production has not stalled. But the problem lies in inventory: the inventory of positive electrode materials and finished products in battery factories is high, and the procurement strategy has shifted from “chasing price increases and replenishing inventory” to “controlling quantity and purchasing on demand when prices rise”. Once prices rebound, it will trigger downstream wait-and-see. The traditional “Golden September and Silver October” peak season verification is nearing its end, and the actual driving effect is significantly weaker than expected. Under the pressure of new mineral sources in the long term, price rebound is more of a pulse market after oversold, which is difficult to evolve into a trend reversal.
4、 Market outlook: Wide range fluctuations may continue
The current industrial chain pattern can be summarized as follows: upstream lithium salt factories are accumulating inventory again, downstream are busy digesting long-term contract orders, and there is a strong wait-and-see atmosphere in the trade process. The market is cautious about the expected sales of electric vehicles next year, and there is a lack of upward catalysis on the demand side in the short term. It is expected that the price of lithium carbonate will continue to fluctuate widely, and the long short game around 100000 yuan/ton will intensify. Specific attention still needs to be paid to changes in market supply and demand.

At the beginning of the month, the price of activated carbon was 12466 yuan/ton, and at the end of the month, the price of activated carbon was 12533/ton, with a price increase of 0.53%.
Most domestic manufacturers of activated carbon have seen price increases this week. The ex factory price of activated carbon for coconut shell water purification in East China is between 9000-13000 yuan/ton, which is relatively firm. Due to the strong prices of upstream coconut shell carbonization materials and rising import costs, there is limited room for price reduction, and the overall stability is relatively strong.
On the demand side: Coconut shell charcoal has relatively stable demand in the gold extraction and new energy sectors, supporting the firm market prices. In the short term, the market is mainly characterized by strong fluctuations. The price of upstream coconut shell carbonization materials remains strong, coupled with tight raw material supply and rising logistics costs in Southeast Asian major producing countries (Indonesia, Philippines), forming bottom support for finished product prices.
Prediction: The trend of tight upstream raw material supply is difficult to change in the short term, and it is expected that the price of activated carbon will mainly fluctuate strongly in the short term.

This week, the domestic PVC market has experienced strong fluctuations, with the focus of spot prices rising and the futures market following the energy and chemical sector’s upward movement; The core logic of the market trend is that the industry continues to suffer losses, forcing supply contraction and forming a bottom support for upstream costs. However, downstream terminal demand is weak to follow up, and the peak season is insufficient, limiting the sustainability of the upward trend. Overall, it presents a range oscillation pattern of “cost bottoming out and demand suppression”.
1、 Performance of spot and futures markets
On the spot side, the mainstream electric stone method SG-5 warehouse withdrawal spot exchange in East China and Shandong gradually increased from 4800-4900 yuan/ton this week. The mainstream trading range over the weekend was 5050-5100 yuan/ton, and traders followed suit by raising prices by 30-50 yuan/ton. The manufacturer’s quotation was firm, but the actual transactions were mainly small orders for essential needs, and the resistance to high price transactions was relatively high. The price of ethylene based materials is higher than that of carbide based materials, and the price difference is maintained. Due to greater losses, there is a shortage of circulating materials. The SG-5 weekly increase of East China calcium carbide method was 5.02%.
The futures market PVC27 01 contract fluctuated and rose this week, with fund sentiment driven by crude oil and geopolitical news. However, the spot discount structure has not been significantly repaired. After the market rebounded, the industry’s hedging and selling pressure gradually emerged, limiting the upward height.
2、 Trend analysis: Supply contraction outweighs weak demand
Supply side: Loss driven low production, passive production reduction continues
This week, the PVC industry as a whole maintained a relatively low level of production, with an overall load of around 60%, which is in the low range of the year. Calcium carbide method PVC: Outsourcing calcium carbide enterprises continue to suffer losses, and integrated enterprises rely on supporting calcium carbide and caustic soda to reduce costs, but also actively control loads; Partial equipment will continue to undergo periodic maintenance and load reduction, and the resumption period will be extended. Enterprises will control production and reduce output in exchange for price.
The losses of PVC produced by the ethylene method are more severe than those produced by the calcium carbide method, with losses of up to 800 yuan per ton. There are also many long-term shutdowns of equipment, and there is little willingness to resume production, which is the main reason for the decline in production.
Overall, the contraction of supply this week is not due to active production control and price protection, but rather a passive supply reduction caused by cost inversion, which is a bottom support factor, but lacks strong positive effects of active concentration and price support.
Cost side: Calcium carbide is firm, crude oil is high, and the cost base is stable
The quotations in the upstream main production areas of calcium carbide remain relatively stable, supported by the costs of blue charcoal and coal. The potential for a deep decline in calcium carbide is limited. According to data from Shengyi Society, calcium carbide remained stable this week with no fluctuations. Establish a solid cost bottom line for PVC produced by calcium carbide method; International crude oil is fluctuating at a high level due to the geopolitical risks in the Middle East, which has driven the price of ethylene to be strong. The cost pressure of ethylene based PVC continues to exist, which also limits the significant downward space for PVC spot prices. The biggest feature of the cost side this week is that there is a bottom line, but there is insufficient upward momentum, and there is no sustained significant upward trend in the raw material side.
Demand side: Weak demand, not strong during peak season
Downstream pipe and profile construction has been slow to increase, while terminal real estate construction has been sluggish, with investment generally lower than the same period in history; The orders of the product factory are mainly short orders and urgent needs for replenishment. After the price increases, downstream resistance has risen, and the willingness to chase inventory is weak. They generally use and purchase as needed, and dare not stock up. Soft products, sheets, flooring materials, and other downstream products also have limited improvement, resulting in poor order transmission.

In terms of exports, India and Southeast Asia have seasonal procurement expectations, but overseas buyers’ resistance to high priced goods has intensified. This week’s export growth is limited, making it difficult to offset the weak domestic demand. Overall, external demand is stronger than domestic demand. Inventory: Slow inventory turnover, slow pace of turnover
This week, PVC manufacturers and social inventory have shown a double high trend, and the process of destocking is slow. There is currently no sign of rapid or significant destocking in the market. Traders tend to control their inventory and focus on light positions to follow the market trend. They are unwilling to stock up in large quantities, and inventory pressure is only marginally relieved without substantial clearance.
3、 Future prospects
Short term PVC is likely to maintain a high volatility trend: the market is mixed with long and short positions, and the good news comes from the low production volume derived from low production and the high cost brought by crude oil; Negative news comes from the constraints of demand. Follow up focus: changes in prices of calcium carbide and crude oil, progress of PVC plant resumption, degree of downstream start-up recovery, follow-up on export orders, etc.
Overall, there may be limited room for PVC prices to rise in the short term, with a focus on maintaining a high consolidation trend.