Docstoc

Weekly Report of Bulk Commodity Market in China Chem

Document Sample
Weekly Report of Bulk Commodity Market in China Chem Powered By Docstoc
					RESEARCH REPORT

    SCI99.COM                                                          ISSUE NUMBER 145


                                                                           Jan 19th, 2011


     WEEKLY COMMODITY MARKET RESEARCH REPORT




                                      Weekly Focus

    Standard & Poor's downgraded the credit ratings of nine eurozone countries, stripping France
     and Austria of their coveted triple-A status on January 13th. German December CPI gained
     0.7% month-on-month and 2.1% year-on-year, according to the final values from Germany
     Federal Statistical Office. January Fed’s manufacturing index was 13.48, with the expected
     figure at 11.00 and the final value at 9.53. National Bureau of Statistics of China published
     2011’s macro data on January 17th: according to preliminary calculation, China’s GDP was
     Yuan 47,156.4 billion in 2011, up 9.2% from the previous year calculated at comparable price.
     As regards quarter growth, the growths in Q1, Q2, Q3 and Q4 were 9.7%, 9.5%, 9.1% and
     8.9% respectively.

    The announcement of crude inventory data from Energy Information Administration (EIA)
     was postponed for one day. If the data from EIA and API were accordant, crude prices would
     be supported. In addition, the Iran problem remained existed. In the short term, international
     crude values would likely to rise.

    International commodity market took an upward trend over this week. Standard & Poor's
     downgraded the credit ratings of nine eurozone countries including France and Austria on
     January 13th, resulting in more serious European debt crisis. Therefore, commodity market
     was worried about it again. However, IMF would increase bailout to curb European debt
     crisis, which boosted commodity market.
RESEARCH REPORT



                                   Energy Market


Crude oil

Oil Analysis

International crude oil prices
                                         Figure 1: Crude Oil Price Movement, USD/bbl
climbed up after Martin Luther King
Day, while it was still influenced by
strained geopolitics problem. But
later, a new round of negotiation was
heard to restart on Iran problem,
which eased the tense situation. As
for economic fundamental, China’s
CPI dropped for six straight months;
China’s economic growth was 8.9%
in the fourth quarter of 2011, higher
than the expectation of 8.7%. The
manufacturing industry in New York
was much stronger than expected,
                                        Table 1: Natural Gas Futures Prices, USD/mmBtu
according to statistics released by
                                                                      Weekly Average
Federal Reserve Bank of New York;                          th
                                        Nat. Gas Jan 18         Current    Prior
January ZEW index in Germany rose                                                   Change
to the peak level since July, 2011. As                           Week      Week
of      supply/demand      fundamental, NYMEX
                                                      2.47       2.58       2.89      -0.31
Monthly Oil Market Report released      Futures
by IEA on Wednesday suggested that      Table 2: LPG Closing Prices in E-China, Yuan/mt
global oil demand would decrease              LPG             Jan 19th Jan 12th Change
from last year caused by weakening       China-origin          5980       6030        -50
economy. US President Barack               Imported            6400       6300       +100
Obama denied a permit for the
proposed Keystone XL pipeline from Canada to the southern US state of Texas, enlarging
Midwest-America’s inventory pressure and hit oil market. However, according to the data from
American Petroleum Institution, US crude inventory declined last week, which surprised the
market.

Outlook
The announcement of crude inventory data from Energy Information Administration (EIA) was
postponed for one day. If the data from EIA and API were accordant, crude prices would be
RESEARCH REPORT

supported. In addition, the Iran problem remained existed. In the short term, international crude
values would likely to rise. Besides, as long as there was Iran trouble, crude oil prices might
mount up further. But after Iran trouble exerted fewer influences on the market, crude oil prices
were likely to slump.




                            Table 3: WTI and Brent Prices, USD/bbl
                                      Weekly Average                   Monthly Average
                       th
  Product     Jan 18        Current        Prior
                                                        Change         Dec             Nov
                             Week          Week
    WTI        100.59        99.78         101.47        -1.69       101.19           98.58
    Brent      110.66       111.02         112.70        -1.68       112.06          107.29


Gasoline and Diesel

 Domestic gasoline and diesel market fluctuated in small ranges this week. Diesel demand
 shrank severely approaching the Spring Festival with poor market trades. Winter grade diesel
 supply got controlled amid market price slipping under pressure. Gasoline price in local
 refining enterprises climbed due to bad weather. Some traders were active in purchasing
 gasoline and market trades got boosted.

 This week, average wholesale price for domestic 93 RON gasoline was at Yuan 9,054/mt, up
 by Yuan 17/mt; wholesale price for winter grade diesel averaged Yuan 8,242/mt, down Yuan
 11/mt from last week.

                 Table 4: Domestic Gasoline and Diesel Spots Prices, Yuan/mt
                                Sinopec & PetroChina             Local Refineries in Shandong
        Product                       th
                             Jan 19         Weekly Change        Jan 19th     Weekly Change
                                                                   8250
     Diesel GBⅡ0#             8250                  0                               -130
                                                                  (-10#)
   Gasoline 93 RON            9335                  0              8850             +150


Fuel Oil

Singapore fuel oil market went up despite of               Table 5: Fuel Oil Prices, Yuan/mt
declines in international crude values. February Fuel oil          Jan 19th    Jan 12th Change
fuel oil supply would be tight on arbitrage             Spot        5000         5000         0
restriction. In China, local refineries and traders
                                                      Futures       5215         5155        -40
lowered operating rates and destocked inventory
before the Spring Festival. Hence most insiders retreated from the market and trading was inactive.
With the Spring Festival drew near, sales of marine fuel oil were unsmooth and shale oil prices
dropped sharply. Before the Spring Festival, marine fuel oil prices would be stable. On the whole,
RESEARCH REPORT

fuel oil market would be thin and prices would be stable ahead of Spring Festival.




                                      Financial Brief


Finance

European debt crisis and major
                                                 Table 6: Major Global Stock Indexes
economic data of China and the US
                                        Stock Index      12-01-11       12-01-18       Change
were the main factors influencing
                                           SSECI         2276.05        2266.38          -9.67
on international financial market.
                                           DOW          12449.45       12578.95         +129.5
Standard and Poor's           (S&P)
                                         NASDAQ          2710.76        2769.71         +58.95
downgraded the credit ratings of
                                         FTSE 100        5670.82        5702.37         +31.55
nine eurozone member states
including France and Austria on Jan       NIKKEI         8447.88        8550.58         +102.7
   th
13 , which was adding fuel to the flames. Consequently, the market fell into a panic. By contrast,
international financial market was supported to some degree, and major contributors were as
follows: the manufacturing index was positive according to the Federal Reserve Bank of New
York on Jan 17th; GDP data corresponded with the forecast in China in 2011, and Home Builders
Index hit the highest level since 2007. Nonetheless, problems in Greece and the gloomy outlook
weighed on the market again. When it came to China, the stock markets decreased first and then
increased, tracking the domestic GDP figure in 2011 and the uncertain market bottom. In general,
policy tended to be loose more evidently.


Currency Market

Foreign      exchange        market            Table 7: Exchange Rates of Major Currencies
remained quiet this week.                Exchange Rate         12-01-11     12-01-18       Change
European sovereign debt crisis                USDX             2276.05       2266.38         -9.67
and major economic data were               USD/YUAN           12449.45      12578.95        +129.5
the main factors affecting foreign          USD/JPY            2710.76       2769.71        +58.95
exchange market. Standard and               EUR/USD            5670.82       5702.37        +31.55
Poor’s downgraded sovereign                 GBP/USD            8447.88       8550.58        +102.7
credit rating of nine eurozone
countries, including France and Austria, influenced by that, the euro against the dollar slipped to a
seventeen-month low last Friday. Market reflection was calm. Positive economic data from China
and Germany improved risk appetite among investors, and pushed global stock market and
commodity market upward. EFSF and European countries issued bonds smoothly, adding that
Fitch lessened possibilities of Italy’s default, so euro against US dollar went up for successive two
days from January 17th to 18th, and investor’s confidence got firm. Accordingly, non-US dollar
hiked nearly to earlier peak point. Euro and pound against US dollar climbed and euro went
stronger than pound. The euro appreciate also came because of brisk demand for Spanish
RESEARCH REPORT

government bonds. USDX opened at 81.61 this week, with the maximum and minimum at 80.77
and 81.7 respectively.


Futures Market

          Table 8: Closing Prices of Main Domestic Commodity Futures Contracts
       Contract            01-12                 01-19                   Change
         L1201             9760                   9985                    +225
         V1201             6955                   6965                     +10
        TA1201             8590                   8874                    +284
        Fu1109             5155                   5215                     +60
        Ru1201             25315                 26945                    +1630
        Cu1110             57610                 60560                    +2950
        Al1110             16215                 16365                    +150
        Zn1110             15285                 15660                    +375
        Au1112            336.98                 340.68                    +3.7

This week witnessed a                  Table 9: Closing Prices of Main Foreign Commodity
generally rising international                             Futures Contracts
commodity market. European
                                       Contract            Unit       01-11    01-18     Change
debt crisis, geopolitics and
                                     TOCOM NR             JPY/kg       273       295       +22
major economic data from the
                                       COMEX
US and China were still major                             USC/lb       355       376       +21
                                       COPPER
factors affecting the market.
                                    LME COPPER USD/mt                 7785      8235      +450
The degradation of nine
                                    COMEX GOLD USD/oz                1639.6    1659.9     +20.3
eurozone      member       states
sparked panic in the market. Subsequently, IMF offered more financial resources for EU debt
relief, and tempered the negative influence brought by the debt woes. In addition, crude oil
coupled with gold prices were still exerting significant influence on commodity market. This week
international crude values tended downward after rising firstly. NYMEX crude prices enjoyed an
increase on Jan 17th, and hit $100/bbl mark again, in the wake of the better-than-expected
economic growth in China in Q4, 2011. Afterwards, according to reports compiled by Federal
Reserve Bank of New York (New York Fed), January manufacturing index in New York expanded
to 13.5 points from December’s 9.53, hitting a nine-month high, which also helped strengthen
market expectations towards the future increasing demand of energy. Moreover, Iran’s position on
crude oil embargo threw some doubt to the market. With an increasingly tense situation in Middle
East, the Nigerian Labor Congress (NLC) announced to close all the oil production facilities from
January 15th, resulting in hiking international crude values. In addition, prices of gold, the
risk-avoiding commodity, were strengthened under the influence of the debt crisis. Besides,
domestic market regained stimulated by good economic figures at home and abroad, while overall
capital tended to flow out with the approaching Spring Festival. General speaking, the possibility
of crude increase still existed.
RESEARCH REPORT


                              Petrochemical Market

                            Table 10: Biggest Movers This Week
                                                                      Change       Change
         Product               Prior Week        Current Week
                                                                      (price)     (percent)
         ↑ Copper                 56300               59425           +3125         +5.55
        ↑ Butadiene               2850                3000             +150         +5.26
          ↑ ECH                   11500               12000            +500         +4.35
           ↑ IPA                  9200                9500             +300         +3.26
          ↑ Lead                  15300               15725            +425         +2.78
       ↓Nitric Acid               1750                1720              -30         -1.71
        ↓ Naphtha                986.09              970.23           -15.86        -1.61
        ↓ Wire Rod                4210                4170              -40         -0.95
         ↓ Toluene                8800                8725              -75         -0.85
          ↓ LPG                   6030                5980              -50         -0.83




Monomers

Ethylene: given the current crude
                                             Table 11: Asian Monomer Prices, USD/mt
values, Asian ethylene prices
                                                                                    Change
soared this week, and they would         Product       Jan 19th      Jan 12th
                                                                                    (price)
inch up in a short term.
                                        Ethylene         1181           1150          +31
Propylene: in tandem with rising
                                        Propylene       1304.5         1284.5         +20
naphtha      prices      and     the
maintenance expectation in Asian        Butadiene        3000           2850          +150
market, propylene USD offers            Naphtha         970.23         986.09        -15.86
went up; however, on the back of sharply shrinking downstream profits, the trading sentiment
seemed slightly stalemated. Butadiene: Abnormal operations for naphtha cracking unit in
America stirred up Asian butadiene export. Naphtha: crude values adjusted at highs while Asian
naphtha prices went down and then mounted up. China increased fuel oil output to satisfy the
increasing demand, and high Dec processing volume from refineries also increased the market
supply. However, considering the surging spread between Asian naphtha prices and Brent crude
oil futures prices, the supply-demand fundamentals became much firmer.


General Plastics

                                      Table12: Domestic General Plastic Prices, Yuan/mt
                                                                                   Change
                                  Product    Grade     Jan 12th     Jan 19th
                                                                                   (price)
RESEARCH REPORT

PE: PE market sentiment was             PE      7042       9660          9680            +20
thin around the Spring Festival         PP      T30S      10400          10400             0
and downstream devices were            PVC      SG5        6520          6520              0
running at low rates. It would          PS      5250       11950         11950             0
undergo some adjustments after         ABS     0215A      15400          15450           +50
the holiday. PP: though PCs
raised EXW offers, PP market remained stable affected by the holiday. It was expected to fluctuate
marginally after the holiday. PVC: downstream demand showed no obvious improvement around
the holiday, and it was predicted that PVC market would experience weak corrections after the
holiday. PS: PCs and traders would pull up PS market prices after the Spring Festival, in response
to high feedstock prices. Thus, the following market would edge higher. ABS: market trading was
inert this week amid thin market atmosphere. ABS offers from first-tier traders were
steady-to-stiffening. The market would be favorable continuously after the holiday backed by the
cost side.


Engineering Plastics

PC: the market stayed               Table 13: Domestic Engineering Plastic Prices, Yuan/mt
stable within a limited                                                                  Change
range. Nonetheless, market Product           Grade         Jan 12th     Jan 19th
                                                                                         (price)
trading was thin following        PA6       MV Chip         25000        25000              0
increasing traders retreating     PA66       EPR27          25600        25600              0
from the market. PC market         PC         2805          20500        20500              0
would experience some
                                            1100-211
fluctuations     after    the     PBT                       16800        16800              0
                                               M
holiday. PA6: though the
                                  POM         M90           11700        11700              0
feedstock prices only edged
                                 PMMA        CM205          20100        20100              0
lower, PA6 market trading
nearly came to a halt. Chips prices kept flat temporarily because of limited goods. PA6 market
would be on the rise after the holiday. PA66: the market entered a correcting period amid the
Spring Festival holiday. PBT: traders stepped out of the market as this year almost came to a close,
and they were both cautious and optimistic towards the following market. PMMA: participants
were seen to enter the market stably and PMMA market would be unlikely to get rid of current
predicament after the holiday. POM: POM market turned stable gradually and trading became
lackluster in the year-end. The market was predicted to adjust weakly after the holiday.


Renewable Plastics

PE: plants stopped production and trading sentiment was entirely thin. After Spring Festival,
fundamental news was optimistic but economic elements still had uncertainties. Renewable
market might undergo adjustment. PP: upstream & downstream plants successively withdrew
from the market and transactions were moderate amid the sluggish trading sentiment. Most
insiders kept optimistic attitudes towards the future market but they, worried about
RESEARCH REPORT

macro-economic variables, stocked up few commodities and took deals cautiously. PET: traders
had withdrawn from the market and transactions were muted. After Spring Festival, as
downstream plants started operation, supply would tend tight but whether demand would improve
or not remained unclear. EPS: resources were short before Spring Festival and prices stabilized. In
the slack season, trading sentiment turned weak and sparse transactions were heard settled. Market
would sustain the current conditions for a short term and it would experience slight correction
after the holiday. PVC: demand continued softening but enterprises shut down and inventory was
moderate, also quotations kept steady. ABS: most plants had taken holiday and transactions were
muted amid the thin trading sentiment. Owing to the rising new material prices and traders’ bullish
attitudes, plants in Jiangsu and Zhejiang regions lifted prices and traders’ mindset tended mild.


                    Table 14: Domestic Renewable Plastic Prices, Yuan/mt
  Product               Grade                    Jan 12th        Jan 19th       Change (price)
                A level PE pure EVA
    PE                                            7800             7800                0
                      granules
              chemical fiber, white clear
   PET                                            8700             8700                0
                         sheet
                 A level BOPP white
    PP                                            8400             8400                0
                      granules
               EPS A level transparent
    EPS                                           8300             8300                0
                      granules
                common A level white
   PVC                                            7000             7000                0
              transparent soft granules
                Titanium ABS A level
   ABS                                            11200            11200               0
                      granules


Rubber

NR:      stimulated     by    NR
                                            Table 15: Domestic Rubber Prices, Yuan/mt
stockpiling of Thailand and other
                                                                                       Change
favorable elements, SHFE NR          Product     Grade      Jan 12th      Jan 19th
                                                                                       (price)
prices highly rebounded this
                                                  GBⅠ         26500           -           -
week and they had broken
                                       NR        Future
through MA60 and the high                                     25315        26945        +1630
                                                   1109
prices of late 2011, however,
                                       SBR         1502       21000           -           -
fundamental news remained
                                       BR         9000#       24000           -           -
weak in domestic market. SHFE
                                       SBS        F675        18750        18700         -50
market would sustain on the
upward trend for a short term and players should pay attention to the external news later.
Synthetic Rubber: this week, SBR prices went up while BR prices stabilized. Middlemen took
deals actively, which propped up the market. Near Spring Festival, quotations for SBR & BR were
scarce. Given the high-price oversea shiploads and high cost, synthetic rubber market would be
optimistic in the future. SBS: trading sentiment was thin this week and most dealers stopped
RESEARCH REPORT

quoting offers, also transactions were sluggish. Downstream plants mainly stopped production and
terminal demand was terribly thin. Most insiders kept bullish attitudes towards the future market
and SBS market was quite likely to enhance under the support of cost and tight resources.


Aromatics

Benzene: under the support of oil
                                             Table 16: Domestic Aromatics Prices, Yuan/mt
prices, USD offers and rising prices
                                         Product       Jan 12th     Jan 19th     Change (price)
from Sinopec, benzene prices moved
                                         Benzene         8200         8400           +200
up. Near Spring Festival, transactions
                                         Toluene         8800         8725            -75
were muted. It was predicted that
                                          Xylene         9125         9050            -75
benzene market might continue
                                          Styrene       10100        10150            +50
advancing after the holiday. Toluene:
affected by the holiday, trading sentiment was thin. Market would undergo correction after the
holiday. Xylene: owing to the Spring Festival atmosphere, trading sentiment softened and market
would maintain adjusting after the holiday. Styrene: market quotations galloped and buy
sentiment improved. Styrene trend after Spring Festival was still influenced by oil prices and
demand.


Intermediates and Chemical Fiber Raw Materials

PTA: supply-demand was             Table 17: Domestic Intermediate and Chemical Fiber Raw
quite fine and economic data                    Materials Prices, Yuan/mt, USD/mt
was optimistic, under which                                                             Change
                                      Product           Jan 12th       Jan 19th
conditions, PTA spots prices                                                             (price)
increased.      Given       the       PX (CFR
favorable elements, PTA                                  1588.5         1595.5             +7
                                      Taiwan)
market      would     continue           PTA              8760           8950             +190
advancing after the holiday.             CPL             23100          23100               0
CPL:       Spring      Festival           AN             14700          15000             +300
atmosphere gradually tended        Semi-dull PET
intensified and nearly no                                10900          11050             +150
                                        Chip
transactions settled within
this week. It was predicted that as downstream players stocked up goods, market would undergo
slight correction. AN: USD offers shot up, lifted by which, prices at ports rose. Traders held tight
to their cargoes so resources were tight in the market. Market would sustain enhancing after 2011.
PET Chip: owing to the cost support and low inventory, chip prices remained on the high side
though most downstream plants had taken holidays. Market might take upward after the holiday.


Phenols, Ketones and Downstream Products

                              Table 18: Domestic Phenols, Ketones and Downstream Products
                                                    Prices, Yuan/mt
RESEARCH REPORT

Phenol:      transactions         Product             Jan 12th      Jan 19th     Change (price)
were sluggish and buy              Phenol              10750          10750             0
sentiment was lackluster.         Acetone               8000           8000             0
Players    should     pay           ECH                11500          12000           +500
attention to the demand         Bisphenol A            12800          12850            +50
conditions after the Epoxy Resin (E-51)                19800          20000           +200
holiday.        Acetone:
market adjusted and transactions were moderate. Players should continue focusing on the arrival
conditions at ports. BPA: with Spring Festival approaching, market insiders successively
withdrew from the market and trading sentiment was lukewarm in domestic and USD market.
Players should continue paying attention to feedstock cost, supply and demand. ECH: prices
surged by Yuan 1,000/mt around but demand was sluggish in the market. Downstream resin plants
nearly stopped production and demand sharply shrank. Market would fluctuate slightly after the
holiday. Epoxy Resin: plants nearly completed their orders before Spring Festival and low-price
liquid resources reduced under the support of rising epoxy chlorine prices. Market would undergo
adjustment after the holiday.


Acids and Esters

Glacial Acetic Acid:
                                    Table 19: Domestic Acids and Esters Prices, Yuan/mt
domestic market was in
                                   Product             Jan 12th       Jan 19th     Change (price)
narrow correction amid
                              Glacial Acetic Acid        2900           2900              0
firming price from some
                                 Ethyl Acetate           6700           6700              0
suppliers,      it   was
                                 Butyl Acetate           8800           8800              0
anticipated that such
                                 Acrylic Acid           11800          11800              0
price     trend    would
                                Butyl Acrylate          12700          12700              0
continue after the Spring
Festival. Ethyl Acetate: market maintained stable this week and was predicted to be in narrow
correction. Butyl Acetate: market maintained flat this week with healthy sentiment among traders
and would turn better after the Spring Festival. Acrylic Acid: market trades were inactive ahead of
the Spring Festival with price staying stable and the following market was expected to be in
correction. Butyl Acrylate: market trades were weak ahead of the Spring Festival with price
staying stable and market was predicted to continue correction in later time.


Chemical Fibers

Polyester Staple Fiber: prices gained slightly on the support of cost and tight supply. It was
predicted that market would be driven up after the Spring Festival. Polyester Filament Yarn:
market trades almost stagnated approaching to the Spring Festival, but market might have a good
start after the holiday promoted by cost and macro atmosphere. PA6 Chip: feedstock price was in
correction amid chips plants faced no inventory pressure. It was anticipated that market would
maintain in correction after the Spring Festival and wait for direction. Acrylic Staple Fiber:
market transactions got better but producers offered stably. Market still need strong support to be
RESEARCH REPORT

lift up and was anticipated to stabilize with some growth after the Spring Festival. Spandex: price
maintained flat before the Spring Festival and resources reduced, market was likely to be on an
upward trend after holidays. Viscose Staple Fiber: production and sales after the Spring Festival
were supported by earlier orders; market was filled with wait-and-see sentiment and was expected
to be in correction.
                     Table 20: Domestic Chemical Fibers Prices Yuan/mt
                                                                                     Change
                    Product                         Jan 12th        Jan 19th
                                                                                     (price)
      Polyester Staple Fiber(1.4D*38mm)              11900           12050             +150
   Polyester Filament Yarn (POY150D/48F)             12050           12050               0
       PA6 Chip(High Speed Spinning)                 24700           24700               0
       Acrylic Staple Fiber(1.5D*38mm)               19000           19000               0
                 Spandex(40D)                        43500           43500               0
          Viscose Staple Fiber(1.5D)                 16450           16800             +350




Chemical Additives

Pathalic Anhydride: with
                                    Table 21: Domestic Chemical Additive Prices, Yuan/mt
Spring             Festival
                                      Product          Jan 12th     Jan 19th     Change (price)
approaching, goods were
                               Pathalic Anhydride       11650        11650              0
absorbed slowly. The
                                       DOP              12900        12900              0
market would adjust in
                                    Zinc Oxide          15000        15000              0
future supported by cost.
                                   Carbon Black          6200         6200              0
DOP: spot supply was
                                      Sulphur            1596         1596              0
numbered but demand was
thin in a poor season. It was anticipated that bolstered by PA and 2EH markets, DOP market
would fluctuate moderately. Carbon Black: high-priced feedstock fell back while the buyers were
active to purchase goods. Carbon black market was calm and would be stable in a short run. Zinc
Oxide: zinc prices hovered at high. Zinc oxide market shared no sales but high prices. During the
first week after Spring Festival, the market was anticipated to be weak and the prices corrected
considering various operation rate in the downstream market. Sulphur: sulphur quotations
maintained steady in the refineries while transactions were dull at ports. The market would be
sluggish during Spring Festival.


Organic Alcohols

                                    Table 22: Domestic Organic Alcohol Prices, Yuan/mt
                                                                                       Change
                                    Product           Jan 12th       Jan 19th
                                                                                       (price)
                                   Methanol             2890           2925              +35
                                Ethylene Glycol         8500           8600             +100
RESEARCH REPORT

Methanol: inventory was        Diethylene Glycol          7050           7025              -25
reducing and feedstock              N-Butanol            10300          10300               0
prices stood at highs.          2-Ethyl Hexanol          12300          12200             -100
Traders were active to
make speculative operations. It was anticipated that the market would correct next week. Ethylene
Glycol: ethylene prices kept at highs; PTA market was strong; polyester market was largely fair.
All these bolstered ethylene glycol market. Some players still expected a bullish market in future.
Diethylene Glycol: inventory was high at ports and demand showed a soft stance. The market
would undergo corrections amid weak sentiment after Spring Festival. N-Butanol: the market
adjusted with thin sentiment during the year-end period. After Spring Festival, players expected an
optimistic market with rising cost. 2-Ethyl Hexanol: high-priced market of 2-EH returned normal.
But on the back of high prices of imports and tight supply, traders tended to keep the market stiff.


Polyurethane Raw Materials

TDI: after the Spring
                                     Table 23: Domestic Polyurethane Raw Materials Prices,
Festival, demand would
                                                             Yuan/mt
not be that weak. The
                                      Product           Jan 12th     Jan 19th     Change (price)
market would stand at
                                        TDI              19500        19500              0
highs and might pick up
slightly. Polymeric MDI:         Polymeric MDI           15500        15500              0
downstream demand did                Pure MDI            17500        17500              0
not recover yet, but             Propylene Oxide         13000        13300             +300
traders still quoted the
                                 Polyether Polyol        14000        14000              0
prices stiff due to high
                                    Adipic Acid          11700        11700              0
cost and tight supply. The
market would end in a                Butanone             8150         8150              0
deadlock at highs. Adipic              BDO               15300        15300              0
Acid:      with      Spring
Festival coming, both sales and purchasing were thin. Supply was still short. The market was
expected to climb upward stably. Butanone: transactions were slack before Spring Festival. After
the holiday, the market would correct with sluggish sentiment. Propylene Oxide: the market was
anticipated to pick up slightly due to short supply, improved demand and cost support. Pure MDI:
with thin trading, the market mainly fluctuated. The downstream almost finished placing orders.
The market would be steady after Spring Festival. Polyether Polyol: end-users mostly retreated
from the market. Feedstock prices remained at highs and supply was tight. The market would
increase in a largely quiet stance. BDO: buying and selling was thin. Most downstream purchasers
had stocked some goods. BDO market would be steady with watch sentiment after Spring
Festival.


Coal Chemical Products

                               Table 24: Domestic Coal Chemical Products Prices, Yuan/mt
RESEARCH REPORT

Crude Benzene: the                 Product            Jan 12th       Jan 19th     Change (price)
market kept calm with         Crude Benzene            6650            6650              0
sidelined     sentiment.          Coal Tar             2750            2750              0
Approaching to the             Coal Tar Pitch          2800            2800              0
Spring          Festival,           Crude
purchasing weakened in                                 5400            5400              0
                                Naphthalene
the downstream market.        Coking Benzene           7900            7900              0
Buyers intended to force     Maleic Anhydride          9800            9800              0
the prices downward.
The market was likely to correct in future. Coal Tar: Spring Festival was near and the market was
guided by negative mood. The plants might make discounts with less confidence. Coal Tar Pitch:
demand was withering and only several plants would produce goods normally during Spring
Festival.Coking Benzene: although the market was supported by short supply and high cost,
low-priced hydrogenation benzene extruded the market. So it would edge higher narrowly later.
Maleic Anhydride: demand dragged the market heavily. Although UPR units would restart in a
row, the supply of MA was sufficient. The market would correct with a stalemate stance in the
near term.


Inorganic Acids

Sulfuric Acid: the market                Table 25: Domestic Inorganic Acids Prices, Yuan/mt
underwent corrections amid thin
                                        Product        Jan 12th       Jan 19th    Change (price)
sentiment and sales were in a
                                     Sulfuric Acid        0             455                0
deadlock. Downstream buyers
                                      Nitric Acid        -30           1720              -30
returned to the market gradually.
There was still supply/demand conflict. The market would vibrate after Spring Festival. Nitric
Acid: the market dipped amid stagnant sales. Sparse buyers emerged in the market. As a result,
nitric acid plants were facing increasing inventory pressure. After the Spring Festival, the market
might face a downturn risk.


                                        Metal Market


Non-ferrous Metals

                                       Table 26: Metal Prices
   Product        Term          Unit          Jan 12th          Jan 19th       Change (price)
                 Futures     Yuan/mt           57400             60560              +3160
    Copper
                   Spot      Yuan/mt           56300             59425              +3125
                 Futures     Yuan/mt           16215             16365              +150
  Aluminum
                   Spot      Yuan/mt           16020             16060               +40
     Zinc        Futures     Yuan/mt           15185             15660              +475
RESEARCH REPORT

                   Spot       Yuan/mt          14850             15250                +400
                 Futures       USD/oz          336.98            340.68               +3.7
     Gold
                   Spot        USD/oz          336.7             339.7                 +3
    Thread       Futures      Yuan/mt           4223              4310                 +87
     Steel         Spot       Yuan/mt           4130              4100                 -30
                 Futures      Yuan/mt           4185              4299                 +87
  Wire Rod
                   Spot       Yuan/mt           4210              4170                 -40
     Lead          Spot       Yuan/mt          15300             15725                +425
      Tin          Spot       Yuan/mt         170250            171500               +1250
    Nickel         Spot       Yuan/mt         134850            138000               +3150


Base metal market was robust this week. Key metals like copper and aluminum all moved up in
price to a large extent. The major reason for this round of price hike was caused by the promoted
risk preference. Recently, economy in Europe and US was better-than-expected, which stirred up
the optimistic market sentiment and mitigated the negative influence brought by the downgraded
credit rating for some euro-zone countries. As economic policies all over the world were easing
and the inflationary pressure reduced, market participants turned more confident towards the
expectation that liquidity would be looser in the future. Of course, the European debt crisis was
the largest factor in affecting the metal market. If the European debt risk again appeared, there was
possibility for metal quotation to decline.


Ferrous Metals

Enveloped in favorable elements, steel futures market dynamically advanced. However, domestic
steel offer still remained under adjustment, amid seriously dull market atmosphere. Enjoying the
Spring Festival, most terminal traders had quitted offering. The downstream construction plants,
which consecutively took a holiday, were also reluctant to purchase. Therefore, trading volume
shrank on the whole. Steel offer was likely to be pushed up based on the experience of previous
years. However, with the external environment being uncertain, steel price trend also faced a
series of uncertainties.


Copper

LME copper strenuously picked up from $8,000/mt to $8,300/mt above, hitting the record high
within three months. Economic data in China and US was optimistic this week, and Q4 Chinese
GDP was better than expected though it reduced to 8.9%. Against this backdrop, it turned possible
for China to ease monetary policy. Meanwhile, market participants also bore optimistic attitude
towards copper demand in the future. LME copper might rise to $8,500/mt mark before the Spring
Festival.


Aluminum

LME aluminum price picked up robustly this week with offers rising above $2,200/mt. Though
RESEARCH REPORT

the sovereign credit grade of some euro-zone nations was downgraded, market sentiment was not
suppressed. In addition, economic data of China was better than expected, which was also a
favorable support. Aluminum price in SHFE increased to Yuan 16,200/mt, and aluminum spot
offer also accordingly inched up. As replenishing purchase was unsatisfactory, transactions were
rather sluggish. Suffering no serious bearish impacts, aluminum demand was expected to be brisk.
Moreover, the deposit reserve ratio might be cut down, which could further push up aluminum
offer.


Zinc

LME zinc offer fluctuated upward to $2,000/mt this week. Though the long-term credit rating of
nine euro-zone nations, including France, was downgraded by Standard and Poor's, this
phenomenon had been foreseen and under control. Afterwards, the newly published economic data
in China and the housing & manufacturing data in US were all favorable, which inspired the
market sentiment. The eased US dollar also supported metal offer to hike. And zinc offer in SHFE
was cited at Yuan 15,500/mt. With the Spring Festival approaching, transactions gradually turned
thin and downstream purchase was also sparse.


Construction Steel

Construction steel market was steady this week. In the last week before the Spring Festival, most
traders left the market ahead of time, and the other traders were busy in withdrawal of funds and
adjusting storage. Most traders held pessimistic attitudes towards the construction steel market
after the Spring Festival, thus they were not interested in storing goods. Small and medium-sized
traders got no plan for replenishing stock and large-sized traders also only maintain a normal
inventory level. After the Spring Festival, market participants needed to especially focus on the
following two factors. Firstly, a competitive cost was quite important as price wouldn’t undergo
large fluctuations when the market was sluggish. Secondly, though the pressure brought by tight
capital turnover would ease down after the Spring Festival, liquidity would not be ample on the
whole, thus it was expected that most construction steel plants would still face large pressure of
tight capital turnover. In short, construction steel price might rose by Yuan 50-100/mt in the first
week after the Spring Festival. After that, the market would undergo corrections on the back of
increased inventory pressure but rebounded downstream markets. At the end of Q1of 2012, the
market might be improved.


                                        Coal Market

                            Table 27: Domestic Coal Prices, Yuan/mt
                   Product                          Jan 12th        Jan 19th      Change (price)
       Shanxi high-quality mixed coal,
                                                      790             785                -5
                5,500kcal/kg
RESEARCH REPORT

      Shanxi mixed coal, 5,000kcal/kg                690             685                -5
        Zaozhuang 1/3 Coking Coal                    1450            1450               0
    Hebei Prime Coking Coal, Grade 10              1563.12         1563.12              0
   Jincheng Washed Anthracite, Middle
                                                     1200            1200               0
                Lump
  Yongcheng Washed Anthracite, Middle
                                                     1705            1705               0
               Lump




Steam Coal

Steam coal market gradually tended calm before Spring Festival. With the approaching of Chinese
Lunar New Year, coal mines took holidays one after another, and downstream users also reduced
output or suspended productions, so supply-demand fundamentals was on a downward trend.
Traders retreated from the market in successions, and transactions gradually shrank in coal market.
As for ex-mine prices, sparse coal prices still dwindled in partial regions.
As to prices in ports, oversupply was obvious now due to the high coal inventory in ports. Coal
prices in N-China ports constantly inched down, and BSPI decreased by Yuan 5/mt. In
Qinghuangdao port, prices for steam coal (Q: 5500 Kcal) were cited at Yuan 785/mt, and those for
steam coal (Q: 5000 Kcal) were Yuan 685/mt.
The market tended sluggish before the Chinese New Year, and the coal demand would increase to
some degree after the holiday due to the inventory consumption from power plants during Spring
Festival holiday. Under such circumstance, the market would improve to some extent, with limited
increasing extent.


Coking Coal

As most coal mine took holidays, the market remained sluggish and market prices were also not
confronted with large fluctuations.
As to coke market, the market stayed calm in most regions.
As for steel market, downstream steel market did not improve, and prevailing steel enterprises
successively offered stable Feb EXW prices, indicating a constantly sluggish steel market.
On the back of macro-economic regulation and control, along with successively mute downstream
demand, most prevailing coal enterprises sustained stable coking coal prices, and partial coal
enterprises did not hold optimistic attitudes towards the market after Spring Festival.


Coal for Chemical Industry

This week was the last one before Spring Festival, on the back of output reductions and shutdown
in coal mines, along with frequent rainy and snowy weather, anthracite trading volumes dwindled
on the whole with stable coal prices in the market.
As for Ningxia Shizuishan and Tianjin, transactions still remained mute, but the users purchased
RESEARCH REPORT

normally. Given the weak transportation, partial coal users were confronted with rapidly shrinking
coal inventories. In Henan, the coal market also ran steadily, amid stable transactions.
Coal prices would constantly stay stable during the Spring Festival holiday, but prices for the
high-end kind coal whose supply remained sufficient would drop by Yuan 50/mt around.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:7
posted:10/9/2012
language:Unknown
pages:17