Overall Market Highlight

This week, the micro-market remained firm at high levels. Prices of zinc salts, manganese salts, ferrous sulfate, and certain diluents stayed strong due to cost support and recovering demand; however, cobalt chloride prices declined as raw material costs decreased.

Risk Warning

Downstream inventory buildup before the holiday season fell short of expectations, and delayed delivery schedules from manufacturers may affect short-term demand realization.

After the Fed raised interest rates by 25 basis points, market bearish factors have gradually materialized, but ongoing uncertainty surrounding future tightening could still disrupt copper and zinc prices.

Cobalt chloride raw material prices may still decline, and manufacturer quotations could continue to drop.

Zinc and copper prices are fluctuating at high levels, creating uncertainty regarding cost pass-through and downstream acceptance.

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

Indicator	Unit	Week 2 (Sep)	Week 3 (Sep)	WoW Change	Avg Aug Price	Avg Price (Sep 18)	MoM Change	Sep 23 Price
Shanghai Metals Market #Zinc Ingots	Yuan per ton	27093	26129	↓ 964	25598	26616	↑ 1018	26515
Shanghai Metals Market #Electrolytic Copper	Yuan per ton	110905	108691	↓ 2214	108224	109728	↑ 1524	112495
Shanghai Metals Market Australia Mn46% manganese ore	Yuan per ton	43.05	43.05	↑ 0.24	43.13	43.05	↑ 0.24	43.05
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	83000	78400	↓ 4600	90667	82286	↓ 8381	76000
Shanghai Metals Market Selenium Dioxide	Yuan per kilogram	114.0	114.2	↑ 0.2	115.24	114.14	↓ 1.10	115
Titanium dioxide manufacturer capacity utilization rate	%	71.84	72.27	↑ 0.43	72.05	71.96	↓ 0.09	-

Zinc sulfate

Raw materials: Although the zinc grid price declined this week, the average price in September rose compared to August, providing continued support on the raw material side. Sulfuric acid prices remained stable, while secondary zinc oxide with high content continues to face tight supply, maintaining high transaction activity.

Supply side: Orders are booked through mid to late October; operating rate is 55%, up 5% month-on-month; capacity utilization stands at 46%, down 3% month-on-month. The decline in capacity utilization provides additional support to prices.

Demand side: Feed industry demand increased by about 10% compared to the end of August; fertilizer industry demand rose by approximately 90% compared to the end of August; shipping freight rates on South American routes declined by 14%–18% month-on-month, while export orders continue to rise.

Macro factors: The Fed raised interest rates by 25 basis points, which is bearish for base metals; a potential cut in China's LPR would be favorable. Zinc prices are gradually returning to fundamentals, with negative processing fees supporting the raw material side.

Price Outlook: With strong demand for feed and fertilizers, prices are expected to remain high and continue rising, providing solid support. We recommend locking in orders promptly based on your current inventory levels.

Manganese sulfate

Raw materials: Sulfuric acid prices remained stable; manganese ore prices held firm at high levels, keeping overall raw material costs strong.

Supply side: Orders are backlogged for 40–45 days, extending to the end of October; operating rate is 100%, unchanged; capacity utilization stands at 76%, up 11% month-on-month. Orders remain strong, and pricing remains firm.

Demand side: Domestic feed demand is recovering, while increased capacity utilization in fertilizer and compound fertilizer production, along with the initiation of procurement for specialty fertilizers, has driven additional volume. On the export front, some overseas manufacturers have resumed operations, but orders are already booked through the end of October, providing support to spot prices.

Macro factors: No direct macroeconomic disruptions; primarily transmitted through raw material costs such as sulfuric acid and manganese ore.

Price outlook: Orders are booked through the end of the month, with prices more likely to rise than fall. We recommend locking in orders promptly based on your current inventory.

Ferrous sulfate

Raw materials: In some regions, the price of heptahydrate ferrous sulfate has risen slightly, gradually showing cost support.

Supply side: Operating rate at 50%, unchanged; capacity utilization at 24%, unchanged. Production is being controlled, and inventory pressure for finished ferrous sulfate monohydrate is gradually easing.

Demand side: The arrival of the peak season in the feed industry and pre-holiday stockpiling have boosted demand for ferrous sulfate. Ferrous sulfate has entered a short-term weak equilibrium phase in supply and demand, with manufacturers maintaining firm pricing.

Macro factors: No direct macroeconomic impact.

Price outlook: Supply and demand are gradually returning to a weak equilibrium, but prices have already risen.

Copper sulfate/basic copper chloride

On the supply side: The Federal Reserve's 25-basis-point interest rate hike was implemented, weighing on non-ferrous metals. After the negative impact gradually dissipated, copper prices began to rebound.

Supply side: Operating rate at 100%, unchanged; capacity utilization at 42%, unchanged. Supply remains stable.

1) Outlook for future trends:

Negative factors:

1. Macroeconomic pressure: The Fed has resumed interest rate hikes, with the U.S. dollar and Treasury yields exerting downward pressure on copper prices in the short term.

2. Market panic and capital outflows ahead of the interest rate hike announcement led to a sharp pullback this week.

Fundamentals supporting copper prices (limited downside potential):

1. Copper shortage: The spot processing fee for copper concentrate continues to remain deeply negative, and the tight supply situation at the mine end has not eased.

2. Low inventory: Domestic electrolytic copper social inventory stands at only **89,100 tons**, a low level that provides bottom support for copper prices.

3. Golden September and Silver October peak season: September to October is the traditional high-demand period for copper rod and wire industries, with downstream demand about to be released in bulk.

Suggestion: Next week's copper net price range is expected to be 109,000–110,000 yuan per ton.

1) Current price trend

Magnesium sulfate/magnesium oxide

In terms of raw materials: the magnesium market remained stable this week, with slight divergence in cost factors. Magnesium sulfate supply was sufficient. For magnesium oxide, the mainstream price of Liaoning electric-fused magnesia sand held steady, while costs saw a minor increase. Procurement advice: replenish magnesium sulfate and magnesium oxide in batches according to demand; for magnesium oxide, consider securing moderate quantities at current stable prices without overstocking.

Calcium iodate

This week, the iodine market remained stable at high levels, supported by firm cost underpinnings. Refined iodine maintained strong prices; calcium iodate producers operated steadily with ample supply, and downstream feed companies continued purchasing at a steady pace. In the short term, refined iodine costs are more likely to rise than fall, while calcium iodate prices enjoy solid support with limited room for decline. Purchase recommendations: consider moderate stockpiling and price locking for calcium iodate; when refined iodine remains firm, it is advisable to secure long-term contracts in advance.

Sodium selenite

The selenium market remained stable with low trading activity. Selenium powder prices held steady compared to last week, while diselenium prices remained unchanged during the week but declined by 1.64% over the past month. Selenium powder supply is primarily derived from copper smelting by-products, ensuring stable availability. However, downstream demand remains weak, with few large-scale manufacturers issuing tenders, leading to a generally weak market sentiment. Stable raw material costs have limited impact on sodium selenite pricing, and spot transactions are conducted on a case-by-case basis. Purchase recommendation: buy only as needed; avoid bulk stockpiling in advance. Monitor fluctuations in crude selenium and diselenium prices and consider small replenishments opportunistically.

Cobalt chloride

This week, the cobalt market accelerated its downward trend, with salt-end prices seeing expanded declines. On September 18, SMM's spot cobalt sulfate prices fell for five consecutive trading days, with minimal actual transactions and a market characterized by price without volume. The divergence between upstream price support and downstream margin concessions has deepened. The downstream intended price for MHP cobalt coefficient has dropped to around 55% discount, while the recycling sector's cobalt oxide battery powder coefficient has fallen below 70%, pushing cost support further downward. Downstream Co₃O₄ producers have generally reduced output, with the overall electrolytic cobalt industry operating rate at only about 7.49%, showing no signs of improved demand. In the short term, cobalt salts are expected to remain weak as they seek a bottom. Purchase advice: manage cobalt procurement according to needs, avoid chasing low prices or stockpiling, and wait for clear signals of demand recovery.

Potassium chloride/potassium carbonate/calcium formate/iodide

1. Potassium chloride: This week, after a rebound, the market has eased slightly and remains in a stalemate. The upward momentum of 50–150 yuan last week failed to continue. Port inventories stand at approximately 3.70–3.75 million tons, with port stockpiles reaching 3.731 million tons in the second week of September—an increase of 86,000 tons from the previous week and a surge of 2.146 million tons year-on-year. Imports from January to July totaled around 10.08 million tons, setting a new record for the same period historically, indicating ample supply and significant downward pressure. Downstream compound fertilizer production is operating at only about 33%, with weak autumn demand and winter storage yet to begin. Market trend outlook is firm consolidation (slightly bullish). Prices are near their one-year lows, leaving limited room for further decline, but a sustained rebound still requires actual reductions in port inventories to confirm. Procurement advice: buy as needed; consider securing volumes in batches at current low port prices, but avoid chasing price drops to build inventory.

2. This week, cost support for calcium formate continues to strengthen. With raw material formic acid starting pre-festival procurement and prices rising, the cost base remains firmly supported. Feed-grade calcium formate quotations are stable to slightly firm, with price differences still existing between brands and regions. Downstream feed companies are replenishing inventories in small batches as needed, resulting in generally moderate trading activity. In the short term, strong cost pressures make prices more likely to rise than fall. Procurement advice: purchase according to demand; consider negotiating volume with slight downward pressure based on formic acid trends; for essential needs before the festival, small batches can be secured early at locked prices.

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