Ministry of Commerce: Price of Production Materials Falls for Seven Weeks in a Row

Business Forecast: Last week (October 24th to 30th), the market price of production materials that was monitored in a key way fell for seven consecutive weeks.

Rubber prices fell by 3.5%. The cost of crude oil fell and the price of chemical raw materials fell sharply, driving the price of rubber down for two consecutive weeks. Among them, the decline in synthetic rubber, butadiene rubber, styrene-butadiene rubber, nitrile rubber prices were down 4.6% over the previous week, 4% and 3.9%. Last week, domestic petrochemical companies substantially reduced the factory price of butadiene to 17,500 yuan/ton, a decrease of 10.3%.

Urea prices fell by 1.8%. In the off season of agricultural fertilizer, the market demand decreased, and the urea price fell for four consecutive weeks, a drop of 4% from the end of September. Among them, the prices of urea in Shanxi, Hebei, and Henan experienced large declines, which were 4.8%, 3.8%, and 4.2% lower than the previous week.

Steel prices fell 1.6%. Due to the sharp drop in raw material prices, the reduction in the number of construction projects, and the reduction in the ex-factory price of steel by large and medium-sized steel mills, the price of steel fell for ten consecutive weeks, a drop of 9.4% from the middle of August. Among them, the prices of 0.5mm non-oriented silicon steel sheet, 10mm ordinary mid-plate, and Φ6.5mm high-speed wire were respectively 6.7%, 2.6%, and 1.8% lower than the previous week. The weather in the northeast and other places turned cold and outdoor construction was affected. Construction companies and traders reduced the amount of steel purchases. In addition, the cost of domestic smelting continues to decline. Last week, prices of Hebei Tiejing Powder and Shanxi Metallurgical Coke fell by 7.7% and 1.1% respectively from the previous week.

The price of coke dropped by 1.4%. The downstream metallurgical demand decreased and the price of coke fell for two consecutive weeks. Among them, metallurgical coke prices fell 1.6%, casting coke prices remained stable. The profitability of the steel industry has declined, and some companies have begun to cut production and reduce the amount of coke purchases. According to the statistics of the China Iron and Steel Association, the daily average output of crude steel of key enterprises in mid-October was 1.585 million tons, a decrease of 4.8% from the previous period.

Cement prices rose 0.3%. Enterprises in Central China, East China and other regions stopped production and stopped production. Market inventory fell. Cement prices in Wuhan and Zhengzhou rose 5.6% and 4.6% respectively. In the northeast, the weather turned cold, the construction of the project decreased, and the market demand decreased. The cement prices in Shenyang and Harbin fell by 2.6% and 2.1% respectively.

1# zinc prices rose 1.4%. Higher international prices have led to a slight increase in domestic zinc prices. On October 28, the three-month zinc price on the London Metal Exchange rose to 1,961 U.S. dollars per ton, up 8.2% from the previous week. Market volume rebounded and zinc stocks declined slightly. Last week, the zinc futures stocks of the Shanghai Futures Exchange stood at 375,000 tons, down 1.7% from the previous week.

1# copper prices rose 5%. The rebound in international copper prices has driven up domestic prices. Last week, the London Metal Exchange's three-month copper price closed at 8,243.75 US dollars / ton, a sharp increase of 15.2% over the previous week. The purchasing volume of downstream companies increased, and copper market stocks fell for two consecutive weeks. Last week, the Shanghai Futures Exchange had a copper inventory of 73,768 tons, a decrease of 15.9% from the previous week.