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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.
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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
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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,
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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
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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.
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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)
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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
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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
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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
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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
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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
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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
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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.
