**Colored Chemical Industry Expected to See an Uptrend Post-Festival**
Analysts anticipate that after the Spring Festival, as feed and sugar industries enter their traditional off-season, the agricultural sector is likely to remain volatile in the short term. Meanwhile, the chemical industry is expected to maintain its strong performance, with colored chemicals currently in a potential phase, likely to see an upward move following the holiday.
**Chemicals: Post-Holiday Rally Expected**
Despite a slight pullback, the plastics market continued to rise due to sustained high crude oil prices, hitting a record high of 11,675 since September last year before declining on concerns about future oversupply. With the arrival of the Spring Festival, most businesses have gradually exited the market, leading to a stagnant trading environment. Market participants are now looking forward to post-holiday activity. National LLDPE prices remained relatively stable, reflecting a lack of aggressive trading from both buyers and sellers. As orders and production rates declined, the spot market for plastics became light, with most businesses closed and little supply available.
Ling Xiaohui, an analyst from China International ** Guangzhou Sales Office, suggests that given the weak fundamentals of Liansu, investors should take a cautious approach during the holiday, expecting a range of 10,615 to 12,220 in the coming month.
**Methanol: Potential for a Post-Holiday Stocking Phase**
The methanol 1305 contract has shown significant volatility since January 18, reaching a new high of 3,015 points this week, although it closed just below the 3,000 level. Overall, the contract maintained an uptrend before the holiday, with lower levels gradually rising. The domestic methanol spot market was quiet ahead of the holiday, with most areas stabilizing as market participants began to prepare for the festive season.
However, Hou Chaofan, a chemical analyst at the China International ** Guangzhou Sales Department, noted that many downstream methanol users, such as formaldehyde producers, had stocked up before the holiday, resulting in low inventory levels. He expects a new round of stockpiling to follow the festival, which could improve the supply-demand balance. In addition to this, factors such as limited domestic supply during the holiday period, national environmental policies affecting supply, U.S. sanctions against Iran, and rising crude oil prices all contribute to a positive outlook for methanol post-holiday.
**Glass: Prices Rise on Fundamental Strength**
Following New Year’s Day, glass prices rose sharply, with the 1309 contract reaching a peak of 1,650 yuan per ton, surpassing the spot market price. In mid-January, some East China glass companies expressed optimism about future price trends, citing improved macroeconomic data, the urbanization strategy outlined by the 18th Party Congress, and energy-saving regulations that support increased glass usage.
Huang Guiliang, an analyst from the China International ** Guangzhou Sales Department, believes that the 1309 contract will continue its upward trend after the holiday, with the five-week moving average acting as key support.
**Non-Ferrous Metals: A Period of Potential**
From a macro perspective, recent financial tensions in the U.S. have eased, with the fiscal cliff deadline pushed to April. This provides stability and supports the ongoing economic recovery. In the eurozone, Greece received a long-term rescue package, and successful government bond sales helped ease the crisis. Germany's ZEW economic sentiment index also exceeded expectations, signaling a gradual recovery in core economies. China's PMI and CPI figures are showing improvement, indicating a solid bottom-up recovery.
Additionally, central banks in the U.S., UK, Japan, and the Eurozone have cut interest rates and injected liquidity into the market through asset purchases, supporting commodity prices. Fudan Ying, a metal analyst at the China International ** Guangzhou Sales Department, notes that copper and zinc are breaking through resistance levels driven by macroeconomic data. Although there have been corrections recently, the overall trend remains bullish, with traders anticipating further price increases and increasing their positions accordingly.
Furthermore, the period between February and March typically sees peak industrial demand, as companies prepare for production peaks. Fu Danying believes that the likelihood of rising base metal prices after the holiday is high, making it a probable trend in the near term.
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