**Colored Chemical Industry Expected to Push Prices Higher Post-Festival**
Analysts predict that after the Spring Festival, with feed and sugar industries entering their traditional off-season, the agricultural sector is likely to remain volatile in the short term. However, the chemical industry is expected to maintain its strong performance, with colored chemicals currently in a potential phase and poised for an upward move following the holiday.
**Chemicals: Post-Holiday Rally Expected**
Despite a slight pullback in plastics, the market continued to rise due to sustained high crude oil prices, pushing prices to a record high of 11,675 since September last year. However, concerns about future oversupply led to a decline. With the arrival of the Spring Festival, most businesses have exited the market, causing it to become stagnant. The LLDPE (linear low-density polyethylene) price remained stable, indicating that both buyers and sellers are not eager to take aggressive positions. As orders and operating rates decrease, the spot market for plastics has also seen lighter trading activity, with most companies having closed down or simply following the market.
Ling Xiaohui, an analyst from China International ** Guangzhou Sales Office, suggests that given the weak fundamentals of Liansu, investors should approach the market cautiously during the holiday, expecting a range of 10,615–12,220 in the coming month.
**Methanol: Strong Potential After the Holiday**
The methanol 1305 contract saw significant volatility this week, hitting a new high of 3015 points, though closing just below 3000. Overall, the contract maintained an uptrend before the holiday, with lower levels gradually rising. Before the festival, the domestic methanol market was sluggish, with most areas stabilizing as market participants prepared for the festive season.
However, Hou Chaofan, a chemical analyst from the same department, noted that many downstream methanol industries, such as formaldehyde, had stocked up in advance. Inventory levels were generally low, and with the post-holiday need for replenishment, a new round of stockpiling is expected. Hou also pointed out several factors that could drive methanol prices higher, including limited domestic supply during the holiday period, environmental policies affecting supply, U.S. sanctions on Iran, and rising crude oil prices. He remains optimistic about the post-holiday methanol market.
**Glass: Prices Rise Ahead of the Festival**
After the New Year, glass prices surged, with the 1309 contract reaching a peak of 1,650 yuan/ton, surpassing the spot market price. In mid-January, some East China glass companies expressed optimism at a seminar, citing stabilized macroeconomic data, increased real estate investment, urbanization trends, and energy-saving policies that support demand. These fundamentals helped push glass prices to new highs before the holiday.
Huang Guiliang, another analyst from the same department, said the 1309 contract closed the week strongly, and the post-holiday trend is expected to continue. The five-week moving average is likely to serve as a key support level.
**Non-Ferrous Metals: A Period of Potential**
From a macro perspective, recent U.S. financial tensions have eased, and the fiscal cliff deadline has been postponed to April, reducing near-term uncertainty. In the Eurozone, Greece received a long-term rescue package, and government bond sales were successful, easing the crisis. Germany's ZEW economic index exceeded expectations, signaling a recovery. China’s PMI and CPI are also showing signs of improvement, contributing to a more stable global environment.
Additionally, central banks in the U.S., UK, Japan, and the Eurozone have cut interest rates and injected liquidity into the market, supporting commodity prices. Fudan Ying, a metal analyst, noted that copper and zinc prices have broken through resistance levels due to positive macroeconomic data. Although there have been corrections, the overall trend remains upward, potentially boosting market sentiment. Investors are increasingly looking to buy more or increase exposure, which could further push prices higher.
Moreover, from a supply and demand standpoint, February to March is typically the peak season for industrial consumption. Companies prepare for production peaks, leading to increased demand and a higher likelihood of rising base metal prices. Fu Danying believes that a post-holiday price increase in metals is highly probable.
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