Overall Market Highlight

Overall Market Outlook: This week, the market showed significant divergence in temperature—copper sulfate and ferrous sulfate slightly declined, while zinc sulfate monohydrate and diluents remained stable. Downstream demand has generally improved.

Week-on-week change: Month-on-month change:

	Unit	Week 2 of August	Week 3 of August	Week-on-week change	Average price in July	Average price as of August 21	Month-on-month change	August 25 current price
Shanghai Metals Market #Zinc Ingots	Yuan per ton	25481	25429	↓52	24523	25389	↑875	25910
Shanghai Metals Market #Electrolytic Copper	Yuan per ton	108257	108071	↓186	104393	107889	↑3496	108440
Shanghai Metals Market Australia Mn46% manganese ore	Yuan per ton	42.9	42.9	-	43.13	42.9	↑0.6	42.9
Business Society Import Refined Iodine Price	Yuan per ton	635000	635000	-	635000	635000	-	635000
Shanghai Metals Market Cobalt Chloride (co ≥ 24.2%)	Yuan per ton	91200	89000	↓2200	101478	92067	↓9411	87000
Shanghai Metals Market Selenium Dioxide	Yuan per kilogram	115	115	-	120.9	115.33	↓5.57	115
Titanium dioxide manufacturer capacity utilization rate	%	71.991	71.95	↓0.04	72.18	72.22	↑0.04

Zinc sulfate

n the raw material side, sulfuric acid prices show significant regional divergence. Secondary zinc oxide supply remains tight, with high transaction coefficients maintaining strong cost support. Regarding zinc prices, both U.S.-Iran sanctions and hawkish Federal Reserve minutes have weighed on prices, but processing fees remain stable at -1,550 yuan per metric ton, limiting downside potential due to solid cost underpinnings. Since August, zinc prices have risen continuously, increasing by 875 yuan compared to July by the third week, providing strong cost support for products.

Supply side: Major producers have intensified production cuts, with operating rates dropping to 50% (down 8% month-on-month) and capacity utilization falling to just 37% (down 4% month-on-month), reaching the lowest level of the year. Market supply is expected to tighten, with a clear contraction in supply.

Demand side: New procurement sentiment remains weak, making it difficult to contribute additional volume in the short term.

Macro factors: U.S.-Iran sanctions and hawkish Fed minutes jointly weigh on zinc prices, while macroeconomic risk aversion could further disrupt zinc markets.

Price Outlook: With supply contraction and demand growth, prices are poised to rise. Zinc prices are expected to trade around 25,350 yuan per ton. However, it should be noted that if macroeconomic risk aversion intensifies sharply, triggering an unexpected drop in zinc prices, the locking strategy may face short-term cost collapse risks.

Suggestion: Procure according to your inventory and needs.

Manganese sulfate

Raw materials: Sulfuric acid prices in Hunan, the main producing region, have declined but remain at high levels, while sulfuric acid prices in Guangxi held steady. Manganese ore prices remained firm at elevated levels, keeping overall raw material costs strong. Manganese ore inventory at Qinzhou Port continued to decrease, supporting stable and slightly rising ore prices. Recently, sulfuric acid prices saw a slight drop but still provided cost support.

Supply side: Due to ongoing shutdowns by overseas manganese sulfate producers caused by high energy costs, some export demand has shifted to domestic suppliers. The operating rate reached 94% (up 6% month-on-month), while capacity utilization stood at 73% (up 18% month-on-month). Delivery schedules are tight, with backlogs extending into early October.

Demand side: Exports remain the key driver, with tight order schedules. Demand for manganese sulfate has strengthened, driven by increased production and export volumes of ternary precursors. On the domestic front, feed demand has shown some recovery, while fertilizer demand is supported only by specialty fertilizers and large-scale manufacturers, resulting in limited growth.

Macro factors: No direct macroeconomic factors; primarily driven by international capacity relocation and downstream inventory replenishment.

Price Outlook: The manganese sulfate market is expected to remain stable with a slightly upward trend in the short term. We recommend communicating with manufacturers in advance to arrange production schedules, securing supplies early to avoid the peak delivery period at month-end.

Ferrous sulfate

Raw materials: Titanium dioxide production capacity remains around 75%, and the supply of by-product crude ferrous sulfate has not tightened. Support from raw materials is weak, resulting in only slight price stabilization with no significant increase.

Supply side: Recently, demand for ferrous sulfate heptahydrate in the downstream lithium iron phosphate market has been weak. Some titanium dioxide manufacturers have resumed operations of their ferrous sulfate monohydrate production lines to consume the by-product ferrous sulfate heptahydrate, boosting the overall operating rate to 67% (up 17% month-on-month) and capacity utilization to 23% (up 12% month-on-month). However, inventory levels of feed-grade ferrous sulfate monohydrate remain high, with slow digestion, and supply pressure continues unabated.

Demand side: Downstream feed demand has slightly recovered, with purchases mainly driven by basic needs and limited additional volume. Feed mills are showing weak demand, replenishing inventory sporadically as needed, without any concentrated stockpiling. High inventory levels still require time to work through.

Macro factors: No direct macroeconomic impact.

Price Outlook: Inventory digestion will take time, and prices may continue to decline. Considering recent enterprise inventory levels and upstream production rates, ferrous sulfate is expected to remain stable in the short term without significant upward movement. We recommend flexible procurement based on your own inventory situation.

Copper sulfate/basic copper chloride

Raw materials: Etching solution supply is tight, with more being directed toward intermediate products such as sponge copper, reducing the proportion used for copper sulfate.

Supply side: Operating rate at 100% (unchanged), capacity utilization at 42% (unchanged), with significant flexibility

1) Outlook for future trends:

U.S. debt surpassing $40 trillion undermines the dollar's credit, prompting a reassessment of copper's strategic positioning. UBS forecasts prices to reach $15,500 per ton, with widening supply gaps. Strong U.S. data increases holding costs, while Europe's sluggish economy limits easing, constraining upside potential. However, domestic efforts to boost internal demand, expectations for the "golden September and silver October" peak season, tight supply-demand balance at the mine level, low non-U.S. inventories, and emerging demand provide support. Overall, the core contradiction in the copper market has evolved from simple industrial supply-demand dynamics to a macro-financial credit contest. As long as the three key drivers—U.S. debt risks, Fed rate-cutting expectations, and a weakening dollar—remain intact, the long-term upward trend in copper prices will continue. Near-term volatility and pullbacks are likely technical adjustments and sentiment digestion rather than a reversal of the trend. Copper prices are expected to remain broadly strong and elevated.

Anticipating next week's copper price to range between 107,000 and 108,000 yuan per ton

Price Forecast: Copper sulfate prices are likely to fluctuate in line with copper market prices, but the actual increase will depend on a combination of factors including raw material supply (etching solution flow), manufacturers' overall costs, and downstream purchasing intentions.

Suggestion: Flexibly schedule procurement based on production pace and inventory levels.

1) Current price trend

Magnesium sulfate/magnesium oxide

On the raw material side, the magnesium market remained stable this week. On the cost front, prices for Liaoning electric fused magnesia sand held steady, with production rates in major regions ranging only between 30% and 50%. Enterprises that have halted or reduced output showed strong resistance to price reductions, leaving no room for softening on the supply side. Feed-grade magnesium oxide maintained firm levels supported by strong fundamentals. Regarding magnesium sulfate, sulfur costs declined from elevated levels, but the bottom support for magnesium sulfate remains intact. Downstream feed manufacturers generally adopted a just-in-time procurement approach, resulting in sluggish trading activity. With demand expected to rebound as the autumn-winter livestock farming season approaches, the market is likely to remain stable to slightly stronger, with limited downside potential. We recommend replenishing inventory in batches according to needs and moderately securing volumes at lower levels when available.

Calcium iodate

The iodine market is trading weak at higher levels. Firm raw material prices for refined iodine provide cost support, maintaining stability at elevated levels during the week. Production at manufacturers remains steady with ample supply, while downstream feed companies are only placing small orders based on immediate needs, resulting in sluggish trading activity. Prices are expected to remain slightly weak in the short term. Buyers should replenish according to demand and there is no need to increase inventory at this time.

Sodium selenite

The selenium market continues to experience a situation where prices exist but trading is sluggish. As a by-product of copper smelting, crude selenium supply remains steady, yet there is no significant bulk purchasing in the market. Demand from the metallurgical sector remains weak, and suppliers are largely holding back, waiting for further developments. Sodium selenite costs remain stable, with manufacturers maintaining steady pricing. Downstream premix producers are mostly buying as needed without stockpiling. In the short term, there is little upward momentum; therefore, procurement should be based on demand and inventory levels should be carefully managed.

Cobalt chloride

This week, the cobalt salt market continued its weak bottoming trend with divergent movements. Cobalt sulfate accelerated its decline, as the raw material MHP cobalt pricing factor dropped to 73%, bringing spot costs down to approximately 70,000 yuan per ton—significantly weakening cost support. In July, imports of cobalt intermediates reached about 16,200 tons (up 48% month-on-month), leading to ample supply and downward pressure from recycled sources offering low-priced materials. Meanwhile, downstream cobalt oxide producers are facing high inventory levels and have halted procurement. The short-term market remains in a phase of searching for a bottom, and stabilization will depend on concentrated restocking by downstream players. We recommend purchasing only as needed, managing pace carefully, and avoiding speculative stockpiling for now.

Potassium chloride/potassium carbonate/calcium formate/iodide

1. Potassium chloride: This week, potassium chloride continued its downward trend. Port inventory rose to a record high of 3.7 million tons on August 21, as steady import arrivals have intensified the supply surplus. On the demand side, autumn fertilizer procurement has not yet kicked in; compound fertilizer production rates remain at around 30%, and dealers are only purchasing small quantities for immediate needs, avoiding buying during price declines. Traders are offering discounts to move inventory but still face limited volume. High annual contract costs limit traders' willingness to sell at losses, narrowing the downside potential. The key turning point will be the peak period for autumn sowing fertilizer purchases from late August to early September, when prices may stabilize after the recent decline, though a significant rebound is unlikely. We recommend replenishing based on actual needs, moderately locking in volumes at lower levels, and avoiding large-scale stockpiling for now.

1. The formic acid market remains in a weak season with prices consolidating narrowly. Raw material prices are stable, providing some cost support, while downstream demand is limited to essential purchases, resulting in low trading volume. In the short term, prices are likely to remain range-bound. A slight upward adjustment may occur if autumn livestock farming demand picks up. We recommend replenishing inventory based on current stock levels and exercising caution when buying at lower prices.

2. Iodine prices remained stable this week compared to last week.