In February, the domestic polysilicon market performed steadily, with little change in prices from major manufacturers. According to the Commodity Market Analysis System of Business Society, the monthly rise and fall of single crystal dense materials is 0. The main reason is that it coincides with the Chinese Lunar New Year, and the market supply and demand performance is stable. According to data from Business Society. As of the end of the month, the mainstream range for single crystal dense materials with a model of first-class solar energy is maintained at 55-6000 yuan/ton.

 

PVA 1788 (PVA BP17)

On the supply side, silicon material manufacturers maintain a reasonable level of operation, while large factories maintain normal operation during the solar term. There have been no significant changes in the overall supply situation, as downstream silicon wafers have also maintained a normal operating state during the solar term, silicon material shipments have remained at a normal level, and silicon material inventory in large factories is still at a medium to low level. From the signing situation of large silicon material factories, the post holiday signing situation is flat, with only a few manufacturers having large-scale transactions. This is also the main reason why silicon material manufacturers have not experienced a rebound in prices. However, as downstream silicon wafer production increases, the bargaining power of silicon material manufacturers will gradually increase in March.

 

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From the demand side, the demand for silicon materials in the February market was relatively rigid, with slightly average pre holiday sales, but post holiday production at the crystal pulling end remained at a medium high level. The operating rate of silicon wafers continues to rise, and the inventory level is also rising. The main reason is that downstream battery cell procurement has decreased, and battery cell manufacturers generally stop work and have long holidays. Before the holiday, only part of the production line is retained for operation and production, making it difficult to digest more silicon wafer inventory. Silicon wafer factories face significant shipping pressure. As of the end of the month, the mainstream transaction price of P-type M10 silicon wafers has remained stable at 2.05 yuan/piece; The mainstream transaction price of P-type G12 is 3.00 yuan/piece; The mainstream transaction price for N-type M10 silicon wafers is 2.00 yuan/piece; The mainstream transaction price for N-type G12 is 3.10 yuan/piece.

 

Market forecast: The supply and demand pattern of the silicon material market may improve in the near future. On the one hand, the supply of silicon material manufacturers remains abundant and unchanged. On the other hand, downstream silicon wafers will consume silicon material inventory more quickly due to high opening prices. Coupled with the expected increase in the operating rate of terminal battery cells in March, the rebound in terminal demand will stimulate upstream and midstream silicon wafers. Therefore, it is expected that the quotation for silicon materials in March may rebound.

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Recent trends in urea prices

 

Agricultural fertilizer preparation has been gradually launched, and urea prices in Shandong have slightly increased this week. According to the Commodity Analysis System of Business Society, the price of urea in Shandong increased from 2508.33 yuan/ton at the beginning of the week to 2516.67 yuan/ton at the end of the week, an increase of 0.33%, and the weekend price decreased by 10.47% year-on-year.

 

PVA 1799 (PVA BF17)

From the supply side perspective, some gas companies have resumed production and started operating higher. The data shows that the operating rate of domestic coal urea enterprises this week is about 86.1%, while that of gas urea enterprises is about 85.8%. The daily urea production in China is about 190000 tons. The mainstream urea manufacturers in Shandong saw a slight increase in factory prices during the week.

 

From the upstream market, it can be seen that the urea upstream market has risen significantly this week: the rainy and snowy weather has ended, leading to a significant increase in production by gas companies, an increase in terminal demand, and a good trading atmosphere. The price of liquefied natural gas surged 7.24%, and the weekend price fell 41.35% year-on-year. The price of smokeless coal has slightly increased, with the price of Yangquan smokeless coal (washing medium block) increasing by 33 yuan/ton to 993 yuan/ton over the weekend. Overall, the significant increase in upstream raw material prices has increased support for urea prices.

 

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From the perspective of downstream demand: winter wheat fertilizer preparation is gradually being launched, agricultural demand is gradually increasing, and industrial demand is adapting to the market. Composite fertilizer companies are experiencing an increase in production, while board and melamine companies are operating at a low level, with a focus on essential procurement. This week, the downstream price of melamine in urea has stabilized at a high level, with a price of 7475 yuan/ton. From the perspective of exports: Although there are still bids overseas, the impact of urea export policies on the domestic market is not significant.

 

Looking at the future: In early March, the urea market in Shandong may experience a slight fluctuation and rise. Business Society urea analysts believe that the upstream market for urea has significantly increased, and the cost support for urea has increased. Downstream industrial demand is the main focus, while agricultural demand is gradually starting. In the future, urea may experience a narrow range of fluctuations and mainly rise.

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According to monitoring data from Business Society, as of February 29, 2024, the domestic organic silicon DMC market price reference was 15360 yuan/ton. Compared with February 1 (organic silicon DMC reference 14980 yuan/ton), the price increased by 380 yuan/ton, an increase of 2.54%.

 

PVA 2088 (PVA BP20)

In February, the domestic organic silicon DMC market as a whole experienced a steady upward trend. In early February, on the eve of the Spring Festival, the downstream stocking of organic silicon DMC basically ended, and the market performance remained stable with a slight strong trend. During the holiday period, the organic silicon DMC market operated steadily, and the basic news on the market was relatively calm.

 

In late February, with the return of the holiday, the organic silicon DMC market began a broad upward trend. After the holiday, Shandong large factories took the lead in raising the price of organic silicon DMC to 15200 yuan/ton. The increase by large factories has driven the market’s restless desire for an increase, and other factories have also started to follow in the footsteps of large factories, raising the price of organic silicon DMC.

 

At the end of the month, the phenomenon of large domestic factories closing their stocks has increased, and leading companies closing their stocks continues to inject an upward atmosphere into the market. The overall focus of the organic silicon DMC market continues to approach high levels. As of February 29th, the price of organic silicon DMC in the domestic market is around 15200-15600 yuan/ton.

 

Analysis of the driving factors supporting the upward trend of the organic silicon DMC market:

 

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In terms of supply: Prior to the holiday, the downstream of organic silicon DMC was generally well stocked, but returned after the holiday. The overall supply inventory in the market is controllable, and some factories have pre orders in the early stage, so the shipping pressure is not high. Coupled with the impact of weather factors in some regions after the holiday, the spot circulation of organic silicon DMC is limited. Therefore, overall, in February, the supply side provided strong support to the organic silicon DMC market.

 

In terms of demand: Before the Spring Festival, the overall demand for organic silicon DMC market was good, and the supply and demand transmission was relatively smooth. After the holiday, downstream markets gradually resumed work and production, and the demand for raw materials remained mainly based on rigid procurement, gradually releasing demand. Therefore, the demand side also brought some impetus to the upward trend of the organic silicon DMC market in February.

 

Prediction of the future trend of organic silicon DMC market

 

At present, the trading atmosphere of organic silicon DMC on the exchange is still good, and the mentality on the exchange is good. The operators have certain expectations for the future market. The organic silicon DMC data analyst from Business Society believes that in the short term, the domestic organic silicon DMC market will mainly operate at high levels, and more attention should be paid to changes in supply and demand news.

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According to data monitoring by Business Society, as of February 29, 2024, the domestic market price of butanone was referenced at 8150 yuan/ton. Compared with February 1, 2024 (reference price of butanone was 7683 yuan/ton), the price increased by 467 yuan/ton, an increase of 6.07%.

 

PVA 2699

From the monitoring chart of Business Society data, it can be seen that in February, China’s butanone market experienced a relatively broad upward trend. During the month, the focus of negotiations in the butanone market continued to move towards higher levels. As of February 29th, the domestic butanone market price was referenced at around 8000-8400 yuan/ton, while the higher price was referenced at 8600 yuan/ton, with a growth rate of over 6% in February.

 

Analysis of Factors Supporting the Rise of Butanone Market

 

In terms of cost: In February, the overall market situation for carbon tetrachloride after the ether end of butanone raw materials showed an upward trend. The continuous increase in raw material prices provided support for the cost of butanone, and the overall market situation of butanone rose with the “original” trend.

 

On the eve of the Spring Festival, the trading atmosphere in the butanone field was quiet, and the overall production of butanone was low, with an operating rate of around 66-67%. During the holiday period, the performance of the butanone market was calm, with no significant changes in production and capacity. After the holiday, Shandong Yibutanone factory has a plan to restart the equipment, while many other parking devices have no plans to start up temporarily. Therefore, the overall adjustment of the post holiday butanone market is still not significant, and the pressure on butanone factories to ship is also not high, driving the market to operate steadily.

 

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In terms of demand: Before the Spring Festival, the downstream stocking of butanone market was basically completed, and the market demand performance was average. After the end of the holiday, downstream factories of butanone have gradually returned to the market, and the intention to purchase raw materials of butanone has gradually been released. In addition, some factories have executed export orders after the holiday. Therefore, in February, the demand side as a whole provided some support to the butanone market.

 

Market analysis of butanone

 

Overall, the rise in the butanone market this time has been supported by multiple factors. As the market continues to warm up, downstream demand for butanone will also continue to recover. Therefore, the butanone data analyst from Business Society believes that in the short term, the domestic butanone market will mostly operate steadily with a strong bias, and the specific trend still needs to pay more attention to the specific news changes on the supply and demand side.

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Aluminum prices fell by 0.4% in February

 

According to the Commodity Market Analysis System of Business Society, aluminum prices fell by 0.4% in February 2024. As of the 29th, the average price of domestic aluminum ingots in the East China market was 18876.67 yuan/ton, a decrease of 0.4% compared to the average price of 18953.33 yuan/ton in the East China market at the beginning of the month (February 1st).

 

In the long term, the current price is in the “M” type price state since the second half of 2023, and the price level has been in the upper middle level in the past year.

 

Periodic accumulation of aluminum ingots in February

 

PVA 0588 ( PVA BP05)

As of February 29th, the inventory of electrolytic aluminum in the main domestic market was 815000 tons, which is 449000 tons compared to the beginning of the month (February 1st). The accumulated inventory during the month was 366000 tons, of which 167000 tons were accumulated during the Spring Festival holiday. Based on historical inventory data, the current inventory level is at a low level in the same period in history. However, compared to the month on month data, the accumulated inventory of electrolytic aluminum before and after the holiday is at the middle level in history.

 

Overview of aluminum ingot fundamentals in February

 

Returning after the holiday, the power outage incident at an aluminum plant in Inner Mongolia may affect production capacity, and actual production changes are limited; In the southwest direction, Yunnan has good precipitation, and the hydroelectric power generation may drive the resumption of a small amount of electrolytic aluminum production capacity in March. Yunnan’s early production reduction has been basically completed, and the risk of subsequent production reduction is relatively small. It is expected that Yunnan’s production will steadily increase slightly before the rainy season, with little variation. In terms of policy, although the latest round of sanctions imposed by the United States on Russia includes aluminum industry manufacturers, it does not directly involve Russian aluminum, and the news is generally disturbed.

 

Factors influencing the future trend of aluminum prices

 

On a macro level, there is some hedging of domestic macro factors. The annualized quarter on quarter correction of the core personal consumption expenditure (PCE) price index in the fourth quarter of the United States was 2.1%, exceeding expectations by 2%. While the PCE was revised upwards, the actual GDP in the fourth quarter of the United States unexpectedly decreased to 3.2%, which was lower than expectations. The Federal Reserve’s swap rate shows that the Federal Reserve is likely to only cut interest rates by 75 basis points in 2024, and investor expectations for the magnitude of rate cuts by the Federal Reserve and the European Central Bank continue to weaken.

 

On the domestic side, the central bank has lowered the benchmark loan interest rate LPR again after eight months. The People’s Bank of China authorizes the National Interbank Funding Center to announce that on February 20, 2024, the loan market quoted interest rate (LPR) is 3.45% for 1-year LPR and 3.95% for 5-year and above LPR. The former remained unchanged compared to the previous period, while the latter decreased by 25 basis points compared to the previous period. Lowering the medium – and long-term LPR benchmark interest rate will help reduce the pressure on residents to purchase properties and repay existing housing loans, which is conducive to further promoting investment and consumption.

 

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2. On the supply and demand side, after the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival), the downstream consumption gradually recovered, the automobile and photovoltaic sectors started to work fairly well, and the construction sector’s operating rate also began to rise at a low level recently. The overall demand has improved.

 

3. On the cost side, changes in the price of raw alumina. In the short term, with loose expectations for ore supply, especially some alumina production enterprises in Shanxi and Henan regions in China actively promoting mine resumption, short-term cost support is average.

 

Future Market Forecast

The traditional peak season for consumption is approaching, and downstream demand may improve. The production capacity and operating rate of aluminum profiles, aluminum cables, aluminum plates and strips, aluminum foils, primary aluminum alloys, and recycled aluminum alloys are gradually recovering with the resumption of production and work. The pressure on aluminum ingot inventory accumulation may weaken in the future, and spot transactions are expected to improve from the current light. It is expected that aluminum prices will experience strong fluctuations in March.

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