Overall Market Highlight

Overall market outlook: Supported by improved macroeconomic sentiment and raw material strength, zinc salt and ferrous sulfate producers are maintaining firm prices despite profit pressures. Cobalt chloride pure powder has declined (due to weakening raw material support). Overall, downstream demand remains moderate, with the market lacking substantial upward momentum, relying primarily on cost factors to limit price declines.

Next week's focus: On the macro level, closely monitor the impact of U.S. non-farm payroll and PMI data on non-ferrous metal prices, as well as the effect of the U.S. midterm elections on market sentiment; on the industry level, track the pace of downstream demand recovery.

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

Items	Unit	Week 3 of Oct	Week 4 of Oct	WoW Change	Avg Price Sept	Avg Price Oct	MoM Change	Nov 4 Price
Shanghai Metals Market #Zinc Ingots	Yuan per ton	25428	25708	↑ 280	26582	25665	↓ 917	25405
Shanghai Metals Market #Electrolytic Copper	Yuan per ton	109958	110420	↑ 462	110387	110695	↑ 308	109190
Shanghai Metals Market Australia Mn46% manganese ore	Yuan per ton	42.55	42.55	-	43.05	42.55	↑ 0.16	42.55
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	58600	54600	↓ 4000	79595	61029	↓ 18566	54000
Shanghai Metals Market Selenium Dioxide	Yuan per kg	116.5	117	↑ 0.5	114.43	116.38	↑ 1.95	117.5
Titanium dioxide manufacturer capacity utilization rate	%	73.38	73.38	-	71.96	73.38	↑ 1.42	-

Zinc sulfate

On the raw material side, the shortage of secondary zinc oxide has limited the downward price movement, but it is difficult to reverse the weak demand trend.

Supply side: operating rate at 58% (unchanged from the previous period), capacity utilization at 57% (unchanged), indicating overall stable supply.

Demand side: Order cycle remains at 30 days (unchanged, scheduled until early December), with the market in a stalemate between supply and demand. On the domestic front, feed sector replenishes inventory only as needed, while fertilizer demand is subdued due to high finished product inventories, declining raw material prices, and low production capacity. On the export side, although shipping freight rates have declined from their peak, they remain 64%–154% above normal levels, severely suppressing new order placements.

Macro factors: Overall improved market sentiment is generally favorable for metal prices, but has limited impact on demand for this product; next week's key variables include U.S. non-farm payrolls, manufacturing PMI, and the midterm elections.

Price outlook: Due to severe losses, there is no room for further price reductions; however, with insufficient actual demand, prices are expected to remain weak and stable, with a wait-and-see attitude (unchanged this week). Going forward, close attention should be paid to how freight rate trends affect export demand. We recommend replenishing inventory as needed.

Manganese sulfate

Raw materials: High costs of manganese ore and sulfuric acid limit the potential for significant price declines.

Supply side: operating rate at 94% (up 6 percentage points from the previous period), capacity utilization at 71% (up 4 percentage points), with resumption of work increasing supply pressure;

Demand side: Order cycle remains at 25–30 days (unchanged, scheduled until early December); fertilizer and feed demand shows no significant improvement, while overseas exports continue to face obstacles due to disruptions in shipping freight costs.

Macro factors: Market trends are primarily driven by supply and demand dynamics of individual commodities, with macroeconomic influences relatively limited; attention should be paid to the indirect impact of freight rates and macro sentiment on export demand.

Price outlook: Under the "increased supply, weak demand" scenario, price support from costs alone is unlikely to last. Quotes remain weak and stable (unchanged this week), with some local softening. During this phase of supply-demand dynamics, we recommend replenishing inventory at normal levels based on your own stock position.

Ferrous sulfate

Raw materials: High production costs provide a floor for prices.

Supply side: Operating rate at 63% (unchanged from the previous period), capacity utilization at 20% (unchanged), with new capacity coming online adding supply pressure.

Demand side: Order cycle remains at 25–30 days; as earlier inventory is being depleted, downstream buyers continue to purchase according to demand.

Price outlook: Stable with a slight downward trend. We recommend purchasing according to your inventory needs.

Copper sulfate/basic copper chloride

Raw materials: Copper concentrate shortage has driven up the price of electrolytic copper.

Supply side: Operating rate at 100% (unchanged from the previous period), capacity utilization at 42% (unchanged), with supply operating at full capacity.

Price Forecast and Trading Recommendations:

High inflation and a sharp drop in tech stocks have dampened risk appetite, driving capital into bond markets. Domestic spot markets show clear signs of tight balance, although end-user consumption sentiment remains cautious. This week's key variables are the U.S. midterm elections and the October non-farm employment report. The unresolved U.S. copper tariff policy, combined with inflation concerns, doubts over AI-related copper demand due to cash flow pressures on tech firms, and rising expectations for Fed rate hikes, have intensified market caution. The earlier narrative supporting copper prices—centered on AI infrastructure—is now entering a phase of real-world validation, putting pressure on valuations across the non-ferrous sector. Supply-side constraints, domestic smelting cuts, and macroeconomic caution are offsetting each other, suggesting that while high-end support for copper prices will likely remain, price momentum may ease slightly. Future direction will depend on inventory trends, the implementation of smelting reductions, and the sustainability of the spot premium. The core drivers for November’s potential copper rebound hinge on two main factors: the U.S. midterm elections and the Federal Reserve’s December interest rate path. If the election results in a divided government, increased uncertainty around fiscal, trade, and geopolitical policies could create room for copper recovery; however, if the ruling party strengthens its position, the upside may be limited. Markets have already priced in a 25-basis-point rate hike in December. If the hike occurs alongside signals indicating the end of tightening, it could trigger a temporary bottoming-out. Conversely, if inflation rebounds and raises expectations for further hikes, any recovery might prove short-lived.

Operational suggestion: Flexibly time purchases according to production schedules to avoid buying at high prices.

1) Current price trend

Magnesium sulfate/magnesium oxide

In terms of raw materials, the magnesium market showed narrow divergence this week: magnesium sulfate prices rose slightly at lower levels, while magnesium oxide remained stable, with large-crystal grades holding firm. At month-end, the benchmark price for heptahydrate magnesium sulfate set by Shengyi Society closed above 1,200 yuan per ton, up less than 1% from the beginning of the month and fluctuating narrowly for several consecutive weeks. Year-on-year growth still approached 60%, after earlier high levels had released downward pressure, leading to a sideways consolidation at lower levels. On the cost side, sulfur weakened again at month-end, with the average price of domestic solid sulfur declining by over 60 yuan compared to the previous month, resulting in a cumulative monthly drop exceeding 30%. However, it was still more than 60% higher year-on-year. The benchmark price for sulfuric acid held steady around 1,500 yuan per ton, doubling year-on-year. The cost gap between by-product and salt lake brine types persists, limiting manufacturers' room for price concessions. For magnesium oxide, factory gate prices for ordinary fused magnesia sand and low-silicon, high-calcium grades in Liaoning Province remained unchanged, while large-crystal grades were quoted at 5,700 yuan per ton, maintaining strength. Magnesia sand producers maintained low operating rates between 30% and 50%, indicating strong cost rigidity. Raw magnesium ingots saw a deep correction in October, with the average price in Shaanxi dropping about 4% from the beginning of the month. Prices bottomed out at month-end before rebounding slightly, as cost support gradually emerged. In terms of trends, magnesium sulfate is expected to consolidate narrowly at lower levels, with limited further downside potential; magnesium oxide remains stable to firm, with large-crystal grades showing potential for catch-up gains. Procurement recommendations: For magnesium sulfate, take advantage of current low levels to replenish inventory in small batches and negotiate lower prices, closely monitoring whether sulfur prices stabilize. For magnesium oxide, purchase according to demand—lock in volumes moderately where regular grades remain stable, and secure pricing early for large-crystal grades to guard against future increases.

Cobalt salts

Native cobalt, co-product cobalt from Indonesia, and recycled cobalt are all increasing in supply simultaneously, leading to overall loose supply conditions that offset the potential constraints of Congo's quota system.

Raw materials:

1. Congo (DRC) supply: With previously en route cargo arriving in bulk and unused quotas from the first half of the year being allocated to the strategic pool, short-term raw material availability has increased, temporarily rendering the quota supply contraction effect ineffective.

2. Indonesia: The HPAL route continues to expand, with cobalt by-product steadily flowing into the domestic market, becoming a major source of new supply and continuously depressing cobalt raw material pricing.

3. Recycled cobalt: As the recycling system continues to mature, the substitution rate of recycled cobalt has risen above 30%, providing incremental supply independent of overseas mining sources, further diverting demand for primary cobalt and suppressing prices.

4. Supply structure differences: supply pressure is primarily concentrated on the metal side (electrolytic cobalt); on the cobalt salt side, due to smelting losses and some refineries' willingness to limit production, supply elasticity is lower, leading to earlier signs of stabilization.

Demand side: Demand is not driven by active inventory replenishment or new orders, and structural substitution continues to dilute cobalt's per-unit consumption.

1. Power battery mainline: Production of ternary precursors has leveled off, lacking upward momentum; the industry continues to advance along two alternative paths—high-nickel low-cobalt and lithium iron phosphate—leading to a sustained decline in cobalt intensity per unit of power battery, thereby lowering the demand ceiling for cobalt.

2. 3C consumer electronics: Year-end inventory buildup has not yet begun, and there is currently no surge in orders, making it a key variable for market observation.

3. Downstream procurement behavior: Battery material and precursor manufacturers are generally purchasing out of necessity, testing prices by bidding low, with very weak willingness to stockpile. There is little capital buying at lower levels, resulting in insufficient demand support, making prices prone to accelerate downward amid market sentiment.

Iodized salt

Raw materials:

1. Increased arrivals from overseas (shipments from Chile arriving, with some vessel schedules concentrated in delivery) turned into spot inflows this week, increasing the amount of market-tradable refined iodine.

2. Shift in market sentiment: Initially reluctant to sell and holding firm on prices, traders have now begun actively lowering prices to secure deals upon seeing arrivals. Prioritizing sales to realize profits, this has led to a divergence where listed prices remain stable while spot prices decline.

3. The cost base of refined iodine is weakening, and downward pressure is becoming evident.

Demand side: Basic demand remains stable.

1. The fundamental demand remains unchanged:

2. When prices are at high levels, they are sustained by "tight supply plus no incremental demand"; once supply expectations materialize and goods arrive at port without sufficient buying interest to absorb them, prices naturally ease.

3. Downstream procurement behavior: Feed mills were already holding back and waiting to see, and upon noticing the easing of spot prices, they further slowed their purchasing pace and became more aggressive in price negotiations, creating a negative feedback loop.

Sodium selenite

This week, the selenium market continued to show divergence, trading narrowly within a limited range: selenium powder held steady at higher levels, while selenium dioxide remained weak and slightly soft. On the selenium powder side, downstream inquiries maintained moderate activity, with some traders favoring stable or even upward pricing, keeping prices near the upper end of the range. In contrast, terminal demand for selenium dioxide showed no signs of improvement, leaving holders cautious and unenthusiastic about trading, resulting in low-level negotiations and compressed profit margins across the sector. On the cost side, quotations for crude selenium and selenium ingots remained generally stable, without clear direction, leading to a prevailing sentiment of market caution. In terms of trend, the short-term divergence—selenium powder leaning stronger and selenium dioxide weaker—is likely to persist, with the overall market remaining range-bound and lacking momentum for a decisive breakout. Key factors to watch include the pace of by-product releases from copper smelters and the sustainability of restocking demand from downstream glass and feed industries. Procurement advice: purchase as needed, avoiding large advance stockpiling; for selenium powder, consider small-volume locking if prices continue to rise; for selenium dioxide, wait for further price declines before replenishing; maintain low inventory levels for sodium selenite finished products.

Potassium chloride/potassium carbonate/calcium formate/iodide

1. Potassium Chloride: This week, potassium chloride prices halted their decline and showed signs of recovery, stabilizing on a weak note. On the supply side, port inventories reached a new historical high, increasing by over 100,000 tons compared to the previous week and more than doubling year-on-year. Storage pressure is evident at some ports, but supplies remain concentrated among major traders, who are increasingly reluctant to sell and beginning to test higher prices. September imports rose slightly month-on-month, with cumulative imports in the first nine months already exceeding last year's total. Import cost levels are gradually approaching spot prices, limiting further downward movement due to cost support. On the demand side, autumn fertilizer purchases are winding down, while winter stockpiling has not yet kicked off. Compound fertilizer production rates remain low, and downstream buyers are focusing mainly on small, essential orders and price comparisons. With the annual phosphorus-potassium fertilizer supply-demand conference approaching and leading companies signaling intentions to support prices, combined with expectations of reduced export capacity from Russia and Belarus in the fourth quarter, market speculation is intensifying. In terms of trend, prices have shifted from a one-sided downtrend to a weak stabilization, with potential for short-term rallies followed by pullbacks. Market developments will depend on the timing of winter stockpiling, pace of port inventory reduction, and progress in next year’s long-term contract negotiations. Procurement advice: buy as needed, lock in volumes in batches when prices dip, avoid chasing rising prices, and refrain from hoarding.

2. This week, calcium formate costs strengthened significantly, leading to a modest increase in product prices. Formic acid, one of the strongest performers in the chemical sector this month, saw its benchmark price from the Chemical Society close at 2,500 yuan per ton by month-end, up a quarter over the month, with a weekly gain approaching 9% and continuously hitting new highs—though still down more than 10% year-on-year. The main driver behind the rise was tight spot supply due to upstream plant maintenance and low operating rates, along with low manufacturer inventories, prompting downstream procurement and export inquiries. By month-end, the upward momentum shifted into a firm consolidation phase, as both 60-day and three-month price cycles have already reached high levels, narrowing short-term upside potential. Following the rapid cost increase, calcium formate producers have shown stronger resistance to lowering prices, reducing availability of low-priced supplies. Price differentials between feed-grade and industrial-grade products, as well as across brands and regions, remain significant. Supply-side operations are generally normal, with no signs of proactive production cuts. On the demand side, downstream feed manufacturers are mainly replenishing small volumes based on immediate needs, showing limited acceptance toward price increases, resulting in a lagging pass-through rate compared to raw material gains. In terms of trend, short-term upward pressure remains driven by rising costs, but weak demand limits the transmission effect. A narrow follow-up increase is expected, with key focus on whether formic acid prices can sustain their current elevated levels and changes in producer inventory and output. Procurement advice: purchase according to actual needs. Given that formic acid prices are already high with limited further upside, consider locking in one to two months’ essential requirements ahead of time to avoid being forced into higher prices later. Be cautious about large-scale buying at current elevated levels.