Trace Elements Market Analysis

I，Analysis of non-ferrous metals

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

	Units	Week 3 of March	Week 4 of March	Week-on-week changes	Average price in February	Average price before March 27	Month-on-month change	Current price as of March 31
Shanghai Metals Market # Zinc ingots	Yuan/ton	23,250	22,830	↓420	24,540	23,653	↓887	23,430
Shanghai Metals Network # Electrolytic copper	Yuan/ton	97,966	94,604	↓3,362	101,507	98,708	↓2,799	95,600
Shanghai Metals Australia Mn46% manganese ore	Yuan/ton	43.97	45.09	↑1.12	42.45	43.90	↑1.45	45.45
The price of imported refined iodine by Business Society	Yuan/ton	635,000	635,000	—	635,000	635,000	—	635,000
Shanghai Metals Market Cobalt Chloride (co ≥ 24.2%)	Yuan/ton	115,750	115,750	—	116,000	115,788	↓212	115,750
Shanghai Metals Market Selenium Dioxide	Yuan/kilogram	172.5	172.5	—	158.20	172.00	↑13.8	172.5
Capacity utilization rate of titanium dioxide manufacturers	%	72.94	72.75	↓0.19	72.12	72.70	↑0.58

Sulfuric acid ：prices rose again this week, driving up the prices of products such as zinc sulfate monohydrate and manganese sulfate monohydrate. Macroeconomic sentiment fluctuated, but fundamental support remained firm.

Sulfuric acid: Short-term strength continues, long-term pullback risk. The sulfuric acid market remains strong in the short term in April, acid plants in major production areas are still under maintenance, sulfur supply is tight, chemical essential demand is stable, and there is still an expectation of price increase.

In the long term, there is a risk of a pullback: Some of the facilities under maintenance will resume in April and supply will increase; Downstream inventories accumulate and demand is overdrawn. If the geopolitical easing and sulfur prices drop, coupled with the off-demand season in the second quarter, prices may fluctuate at high levels or pull back.

1）Zinc sulfate

① Raw materials: Zinc hypooxide: Due to environmental impact, some rotary kilns in the northern region have not resumed production yet, the market supply remains in a tight balance, and production costs are difficult to be reduced.

Zinc network price background: On the macro side, expectations of a rapid end of the Middle East geopolitical conflict have failed, market sentiment has weakened, but the situation is highly uncertain, zinc prices are likely to remain highly volatile; Positive fundamentals continue: Domestic smelters' raw material inventories are only 21 days, lower than the normal inventory level of 25 days. Coupled with the low volume of imported ore transactions, smelters are competing for domestic ore sources, and the tight supply of zinc concentrate builds a bottom support for zinc prices. At the same time, there are no signs of a short-term rebound in LME zinc inventories, which continue to safeguard zinc prices.

Overall, zinc prices are expected to rise next week, with an average price of 23,700 yuan per ton projected.

② Sulfuric acid: Price surges again this week.

At 63 percent of the factory's operating rate and 60 percent of the capacity utilization rate, supply has picked up.

The price of zinc sulfate monohydrate is driven up by the rising cost of sulfuric acid during the peak demand season. Customers are advised to lock in orders in a timely manner based on their production plans and inventory situations.

2）Manganese sulfate

In terms of raw materials: ① Manganese ore prices remain high, sulfuric acid prices continue to rise and are still expected to increase

Due to the sharp increase in sulfur prices, there is still room for further growth in the future, providing a solid bottom support for product prices.

Based on the analysis of order volume and raw material factors, the current order is abundant, coupled with the expectation of rising sulfuric acid prices, the price will continue to rise. Customers are advised to lock in orders in a timely manner based on current inventory consumption and production plans.

3）Ferrous sulfate

Raw material side: The cross-diversion of ferrous heptahydrate leads to tight raw material supply, and the upward push on the cost side continues to increase.

Sulfuric acid: High this week

Ferrous sulfate rose strongly this week and raw material supply remained tight due to operating rates in the titanium dioxide industry. The price increase of ferrous sulfate heptahydrate has led to higher costs for producers of ferrous sulfate monohydrate, which in turn has resulted in poor overall operating rates of ferrous sulfate in the country and very little spot inventory of enterprises. This is a favorable factor for the price increase of ferrous sulfate. Under the double support of low capacity utilization and scarce raw materials, the price of ferrous sulfate will remain high in the short term. Customers are advised to increase their inventories appropriately.

Titanium dioxide production capacity utilization rate

4）Copper sulfate/basic copper chloride

Macroeconomics: The Middle East war that has lasted for nearly six weeks has boosted safe-haven demand, while the resulting inflationary pressures have forced the Federal Reserve to maintain or even tighten monetary policy, putting pressure on risky assets and a fierce battle between bulls and bears. The increase in LME copper inventories has slowed slightly, but overall inventories remain high, with a decline in write-offs and an accumulation of registered warehouse receipts, and there is still a possibility of inventory growth. Domestic social inventories continued to be reduced, falling for the third consecutive week after hitting record highs that week.

Shanghai Metals Market Electrolytic Copper

Copper prices bottomed out and rebounded after a two-week ceasefire was reached. The geopolitical situation is evolving rapidly and is finally close to a short-term ceasefire agreement, with the Strait of Hormuz open for two weeks. Geopolitical and oil price changes led to a rise in copper prices, while the Federal Reserve maintained a more hawkish stance, suppressing expectations of economic growth and interest rate cuts in the short term, putting pressure on copper prices.

To sum up, geopolitical uncertainty remains the dominant factor. Copper prices are likely to remain wide and volatile. In the medium to long term, the tight balance of supply and demand in the copper market remains unchanged. The rigid constraints on mine supply and the sustained growth in demand for new energy constitute the core logic that copper prices are more likely to rise than fall.

It is expected that copper prices will fluctuate weakly in the near future and remain at 94,000-99,000 yuan per ton

5) Magnesium sulfate/magnesium oxide

In terms of raw materials: Currently, sulfuric acid in the north is stable at a high level.

Due to the post-holiday control of magnesite resources, quota restrictions and environmental rectification, many enterprises are producing based on sales. Light-burned magnesia enterprises have been forced to suspend production for transformation due to capacity replacement policies, and short-term productivity is unlikely to increase significantly. Due to the war, sulfur prices rose and sulfuric acid prices went up, providing favorable support for magnesium sulfate prices. It is recommended to stock up appropriately.

6）Calcium iodate

The current calcium iodate market shows a balanced supply and demand pattern. Cost support is stable, supply production is orderly, and demand is recovering moderately. There are no drivers to break the balance in the short term, and prices will remain

7）Sodium selenite

In terms of raw materials: The prices of non-ferrous metals continue to rise. The overall market volume of crude selenium and selenium dioxide shrinks while prices remain stable. The supply of crude selenium and selenium dioxide in the market is tight. Capital speculation leads to a shortage of raw materials due to the upstream non-shipment of crude selenium and selenium dioxide. Against the backdrop of the continuous tightness of crude selenium resources, it is expected that product prices will rise rather than fall in the short term.

Raw material prices remain firm at a high level, and it is not ruled out that sodium selenite will be raised again. Customers are advised to stock up at the right time based on their inventory situation.

8）Cobalt chloride

The market sentiment for cobalt chloride has not improved significantly, and the stalemate persists. The willingness of leading companies to hold prices remains firm. However, downstream purchasing sentiment remains conservative, and market inquiries show no sign of recovery. The overall pessimism in downstream demand has led cobalt enterprises to be more cautious in raw material procurement. Actual transactions are still dominated by sporadic replenishment, and the transaction focus remains stable. Overall, the market still lacks the direct impetus to break the deadlock in the short term, and prices will remain stable. It is recommended to buy as needed.

9）Potassium chloride/potassium carbonate/calcium formate/iodide

1. Potassium chloride: The previous plunge in potassium chloride prices from high levels was largely a venting of market panic. When the price dropped to a certain extent, traders who held supplies and had stable channels gradually calmed down. Rather than selling off at a low price in panic, it's better to steady the pace and wait for the right time to sell off. The "reluctance to sell" mentality of this group of traders directly reduces market circulation and provides support for stabilizing prices.

2. The formic acid market has recently shown a phased feature of "stabilizing and building up strength, slightly rising, and temporarily stabilizing and consolidating". The price is likely to remain firm and still has the potential for further increase. It is still necessary to pay attention to changes in supply and demand in the market. Calcium formate prices have risen. It is recommended to stock up according to demand.

3. Iodide prices remained stable this week compared to last week.