After two years of low prices, this year's liquid argon market is full of energy and can open up at the slightest disagreement. Since the second quarter, the market has been sluggish for a while, especially during the May Day and Dragon Boat Festival holidays, which suppressed the market's progress. However, after the Dragon Boat Festival holiday, prices unexpectedly exploded, which surprised many industry insiders. Of course, everything has its origin, and price increases are also driven by factors.
From the above chart, it can be seen that the current market trend is slightly different from previous ones. Previously, the southern market led the northern market to rise, but this time the increase in North China, Shandong and other places significantly exceeded that of the southern market, leading the market forward. Currently, the price difference between the north and south has basically disappeared, and even inverted. Some companies in Hebei and Shandong markets crossed the 3000 yuan/ton mark yesterday, and the surrounding areas will gradually follow suit. The current price increase in the Yangtze River Delta region is cautious, but due to tight supply, most of them rely on direct sales to customers or contracts, with prices but no market. The market circulation resources are scarce, and price speculation is intense.
Why has the price increased? Zhuochuang has also mentioned in multiple analyses that from a fundamental perspective, the main factor affecting the current situation is supply. One is the normal spring overhaul, such as Yangzi Petrochemical, Qilu Petrochemical, and some steel enterprises; Secondly, under the pressure of environmental protection, many steel, fertilizer and other enterprises have stopped production or restricted production, causing a "city gate fire and disaster to the fish in the pond", and the supporting air separation units have also stopped production; The third is regional supply shortage. For example, the the Belt and Road Summit in Beijing in May limited production in Beijing, Tianjin and Hebei, and the impact of resource decline caused by it began to release in late May. The price in Hebei has skyrocketed from an increase of 800-900 yuan/ton in late May to the current 2000-2500 yuan/ton, with some even hovering above 3000 yuan/ton. In addition, in the Shandong market, besides routine maintenance and other situations, the export of 2500 tons from Yingde in Rizhao this month has also played a role in boosting the market. Of course, due to the impact of last year's price increase, current psychological reasons are also an important factor. The market is full of confidence in rising prices. In previous years, the range of enterprise price increases was mostly between 50-100 yuan/ton. However, since the second half of last year, enterprise price increases have often been between 100-200 yuan/ton or even up to 500 yuan/ton, causing the market to lose rational operation and the speculative effect to become apparent.
From the perspective of downstream demand, it is currently relatively stable. Although prices of some special steel and stainless steel enterprises have decreased, their profitability is still relatively good compared to previous years. In terms of photovoltaics, with the support of national policies, market confidence is recovering, and multiple companies are expanding their capacity, which also has a driving effect on the medium to long term of the entire market. Of course, in terms of manufacturing, due to factors such as current environmental protection and demolition of illegal buildings, the usage of some small and medium-sized customers has decreased.
Looking at the future, the overall inventory of enterprises remains low, and there is currently no concern of price decline. However, it is also a market law that 'when prices rise, they will inevitably fall'. As prices rise, downstream customer costs increase, demand shrinks, and wait-and-see intensifies, prices will also enter a downward trend.