Overall: Supported by a recovery in macro sentiment and raw-material costs, zinc salt producers and ferrous sulfate producers maintained firm offers while under loss pressure. Copper sulfate rose by RMB 400/t (tracking copper prices), while cobalt chloride pure powder fell by RMB 12,000/t (weaker raw-material support). Overall, downstream demand was mediocre; the market lacked any substantive upward driver, and prices were held up mainly by cost-side support limiting the downside.
Next week's focus: at the macro level, closely watch how the US non-farm payrolls report and PMI data affect non-ferrous metal prices, as well as how the US midterm elections affect market sentiment; at the industry level, focus on the pace of downstream demand recovery.
II. Key Data Overview
(The table above only summarizes basic information for each product; see Part VI for details.)
III. Purchasing Strategy
IV. Macro Information and Risk Warnings
(i) Review of Macro Events This Week
1. Federal Reserve: rates were left unchanged, and September PCE rose 0.5% MoM, both in line with expectations. Powell's remarks were no more hawkish than expected, dispelling pessimism about aggressive rate hikes; risk appetite recovered, which is positive for metal prices.
2. Geopolitics: the Middle East conflict eased temporarily, and falling oil prices alleviated inflation concerns; risk appetite improved, which is positive for metal prices.
(ii) Risk Warnings for Next Week
Next week, focus on sentiment swings triggered by US non-farm payrolls, manufacturing PMI and the midterm elections. Data below expectations would strengthen rate-cut expectations and support higher non-ferrous metal prices; data beating expectations would continue to weigh on copper, zinc and other metal prices.
V. Metal Price Comparison Chart
Note: Week 4 of October refers to October 26-30; Week 3 of October refers to October 19-23.
VI. Detailed Analysis by Product
This week, the zinc price rose RMB 280/t WoW to RMB 25,708/t. Next week's outlook: the fundamental picture - tight ore supply, continued destocking (183,300 t in China) and low LME zinc inventories (160,000 t) - is unlikely to change in the short term, and fundamentals remain dominant; for macro disturbances see Part IV. If external data are weak, rising rate-cut expectations would support zinc prices. Zinc is expected to trade in a firmer range next week, with the key level around RMB 25,800/t.
(i) Zinc Sulfate Monohydrate:Weak Demand, Manufacturers' Quotations Remain Stable and Wait-and-See
Orders and operating rate: 30 days (flat); operating rate 58% (flat); capacity utilization 57% (flat).
Core logic: With no further improvement in demand, producers are constrained by severe losses and have no room to cut quotes further; but lacking any real demand pull, prices can only stay weak and stable. Although the shortage of secondary zinc oxide on the raw-material side limits the downside, it is hard to reverse the weakness.
Demand: The market is currently in a supply-demand standoff. Domestically, feed mills are restocking only as needed, while fertilizer producers are running at low loads because of high finished-fertilizer inventories and falling raw materials. On exports, although ocean freight has come down from its peak, it is still 64%-154% above normal, severely suppressing new-order transactions.
Recommendation: Focus on how ocean-freight trends affect export demand; restock normally as needed.
(ii) Zinc Sulfate Heptahydrate: Capacity Retreats, Producers Hold Prices and Wait
Orders and operating rate: 25-30 days (flat); operating rate 75% (↓4%); capacity utilization 49% (↓7%).
Core logic: A temporary contraction on the supply side gave producers breathing room; combined with recovering zinc prices, producers are strongly inclined to hold prices firm, and a sharp decline is unlikely in the short term.
Demand: The chemical fiber industry maintains rigid demand, ore dressing has not yet picked up, and exports are weak because of ocean-freight disruptions.
Recommendation: Purchase as needed based on your own inventory.
(iii) Active Zinc Oxide: Downstream Rigid Demand Dominates, Producers' Quotes Firm
Orders and operating rate: 20-25 days (flat); operating rate 72% (flat); capacity utilization 48% (flat).
Core logic: Stronger costs only squeezed producers' room for concessions; firm quotes reflect a reluctance to sell at larger losses. With demand diverging and generally weak, there is no substantive driver for prices to rise.
Demand: Finished-product inventories in the desulfurization industry are high; the rubber industry is running at reduced rates because of high costs; and the feed industry's long-term demand outlook is weighed down by falling breeding-sow inventories.
Recommendation: With costs providing a floor, a major decline is unlikely; restock normally based on your own inventory.
(iv) Manganese Sulfate Monohydrate: Restarts Add Supply Pressure, Weak Demand Leads to Localized Loosening
Orders and operating rate: 25-30 days (flat); operating rate 94% (↑6%); capacity utilization 71% (↑4%).
Core logic: Although high manganese ore and sulfuric acid costs limit the downside, holding prices up on costs alone is unsustainable in a "rising supply, weak demand" pattern. Order books are diverging, and some producers have already cut quotes by RMB 50/t to grab market share.
Demand: There are no clear bright spots in fertilizer or feed demand, and overseas exports remain hampered by ocean-freight disruptions.
Recommendation: During this supply-demand tug-of-war, restock normally based on your own inventory.
(v) Copper Sulfate: Strong Copper Rally, High Prices Curb Downstream Buying
Orders and operating rate: operating rate 100% (flat); capacity utilization 42% (flat).
Core logic: Copper sulfate producers, constrained by raw-material costs, were forced to follow the rally. Downstream buyers mostly purchased small lots for rigid needs, so the spot increase in copper sulfate lagged behind copper prices.
Copper price impact: Boosted by the Fed rate decision and easing geopolitics, plus tight copper concentrate supply, the electrolytic copper network price rose sharply by RMB 462/t this week to RMB 110,420/t. Next week's macro picture depends on US non-farm payrolls and PMI data, with considerable uncertainty; tight copper ore supply plus low inventories provide a floor, and electrolytic copper is expected to fluctuate in the RMB 110,000-111,000/t range.
Recommendation: Copper sulfate gains are limited by its own supply-demand balance. Purchase flexibly according to your production schedule and avoid buying at highs.
(vi) Ferrous Sulfate: New Capacity Weighs, Producers Keep Quotes Stable
Orders and operating rate: operating rate 63% (flat); capacity utilization 20% (flat).
Core logic: High costs provide a price floor, but with supply pressure from new capacity coming online, producers kept quotes stable and adopted a wait-and-see stance.
Demand: As earlier inventories are digested, purchasing remains need-based.
Recommendation: There is no room for a deep price decline in the short term; purchase as needed based on your own inventory.
(vii) Calcium Iodate: Raw Materials Stop Falling, Demand Lacks Bright Spots
Orders and operating rate: operating rate 100%; capacity utilization 51%.
Core logic: After refined iodine prices fell last week, they held stable this week on a wait-and-see basis, and calcium iodate producers kept quotes unchanged.
Recommendation: Pharmaceutical demand is unlikely to pick up, and refined iodine prices will continue to weigh on the product; purchase flexibly based on your own inventory.
(viii) Sodium Selenite: Crude Selenium Supply Tightens, Prices Still Supported
Orders and operating rate: operating rate 100%; capacity utilization 24%, flat WoW.
Core logic: Crude selenium supply remains tight and raw-material prices stay high; driven strongly by costs, producers held prices stable this week.
Recommendation: The raw-material shortage is unlikely to change in the short term and cost support remains strong; lock in orders promptly based on your own inventory.
(ix) Cobalt Chloride: Demand Drags Prices Down Again
Orders and operating rate: operating rate 100%; capacity utilization 44%.
Core logic: Raw-material prices fell again this week, weakening cost support, and producers lowered quotes.
Recommendation: Demand from the NCM battery sector, the main downstream for cobalt salts, is unlikely to improve in the short term, and cobalt chloride raw-material prices may fall further; purchase flexibly when appropriate.
