Composite Carbon Source - Type 1

Composite Carbon Source Type-1: Recent Commodity Market Intelligence

I. Market Price Trends
1. Domestic Market
- East China: Price range is 4,200–4,500 RMB/ton. Some manufacturers have raised quotes by 50–100 RMB/ton due to increased raw material costs, but downstream acceptance is limited, resulting in actual transaction price increases of approximately 30–50 RMB/ton.
- South China: Prices remain stable at 4,300–4,600 RMB/ton. Regional demand is diverging; in the Pearl River Delta, stricter environmental policies have increased procurement by wastewater treatment plants, supporting prices.
- North China: Prices have fluctuated slightly to 4,100–4,400 RMB/ton. Affected by the winter heating season, some enterprises have reduced production, leading to a tight market supply.

2. International Market
- Southeast Asia: CFR China Main Port quotes are 580–620 USD/ton, up 3% from last month, primarily driven by fluctuations in international crude oil prices and recovering regional demand.
- Europe: FOB Rotterdam quotes are 650–700 EUR/ton. Due to high energy costs, local European producers have cut production, increasing import demand.

II. Supply and Demand Analysis
1. Supply Side
- Domestic capacity utilization is approximately 75%, down 2 percentage points from last month, mainly due to environmental inspections and winter production restriction policies.
- Import volumes increased by 10% month-on-month, primarily from Southeast Asia and the Middle East, helping to fill domestic market gaps.

2. Demand Side
- The wastewater treatment industry accounts for 60% of demand. Increased wastewater treatment volumes in northern regions during winter have driven demand growth.
- Demand from the chemical and pharmaceutical industries remains stable, accounting for about 30%. However, procurement pace has slowed due to lagging price transmission from downstream products.

III. Cost and Profit Analysis
1. Raw Material Costs
- Prices of key raw materials (such as glucose and sodium acetate) continue to rise. Glucose prices increased by 8% from last month, pushing up the production costs of composite carbon source.
- Energy costs (natural gas and electricity) account for 15%–20% of production costs. Rising energy prices during the winter heating season further compress profit margins.

2. Profit Levels
- The industry's average gross margin has dropped to 12%–15%, a 3-percentage-point decrease from last month. Some small and medium-sized enterprises have suspended production due to cost pressures.

IV. Policy and Industry Developments
1. Environmental Policies
- Multiple regions in China have introduced policies upgrading emission standards for wastewater treatment plants, driving increased demand for composite carbon source as a carbon source supplement.
- The pilot launch of the EU Carbon Border Adjustment Mechanism (CBAM) is imposing cost pressures on exporting enterprises, with some orders shifting to the domestic market.

2. Industry News
- A leading enterprise has announced the expansion of its production line for 100,000 tons of composite carbon source per year, expected to come online in Q2 2024. This may alleviate long-term supply pressures.
- The industry association has released the 'Quality Standards for Composite Carbon Source Products' to standardize market order and eliminate backward production capacity.

V. Analysis, Judgment, and Forecasts
1. Short Term (1–3 Months)
- Price Trend: Supported by raw material costs and tight supply, domestic prices may rise slightly to 4,300–4,600 RMB/ton. International prices will remain high due to elevated energy costs.
- Demand Forecast: Demand from the wastewater treatment industry will continue to materialize. Demand from the chemical industry may see a slight increase due to pre-Spring Festival stockpiling.

2. Medium Term (3–6 Months)
- Price Trend: As new production capacity gradually comes online, supply pressure will ease, and prices may fall to 4,100–4,400 RMB/ton. However, raw material costs will remain a key supporting factor.
- Demand Forecast: Environmental policies will continue to drive demand in the wastewater treatment industry. Demand from the chemical industry may recover as expectations of economic recovery strengthen.

3. Long Term (6–12 Months)
- Price Trend: The risk of industry overcapacity will become apparent, putting downward pressure on prices. However, support from the cost side will limit the decline, with prices expected to remain in the 4,000–4,300 RMB/ton range.
- Demand Forecast: Demand from the wastewater treatment industry will maintain stable growth. Demand from the chemical industry may see new highlights due to expansion in new energy and new materials sectors.

VI. Risk Warnings
1. Risk of significant fluctuations in raw material prices.
2. Risk that the implementation of environmental policies falls short of expectations.
3. Risk of rising import costs due to international geopolitical conflicts.