An update from the air separation industry, 20161013: The gas market saw mixed trends in September; optimism is hard to find in the gas market for October

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It’s time to enter the off-season again~~ The gas market saw fluctuations in September, and there are no signs of optimism for the gas market in October. I. Market review for September: In September 2016, the liquid oxygen market first rose and then fell. In the early days of September, prices increased due to support from the steel industry and production restrictions imposed as part of the G20 meetings. However, in the later part of September, the market atmosphere deteriorated due to the National Day holiday, leading to a decline in prices. According to Zhuochuang Data, the national average price per ton in September was 606.36 yuan, representing a month-on-month increase of 3.87% and a year-on-year increase of 26.93%. In September, the liquid nitrogen market saw slight fluctuations, with a gradually deteriorating market atmosphere. At the beginning of the month, due to the G20 summit, the level of production activity was low, and a limited supply of goods kept prices stable at higher levels. Starting from the middle of the month, the Mid-Autumn Festival holiday began, leading to a more cautious attitude on the part of market participants. Coupled with negative factors such as the new transportation regulations introduced on the 21st and the long National Day holiday, the market saw downward fluctuations, with manufacturers prioritizing shipments. According to data from Zhuochuang, the average price of liquid nitrogen across the country in September was 531.12 yuan per ton, representing a 1.84% increase on a month-on-month basis and an 8.28% increase compared to September 2015. Among the 29 provinces and cities monitored, prices declined in 5 of them while rising in 4. In September 2016, the liquid argon market experienced sharp fluctuations in prices; these prices started to drop sharply from the beginning of the month, yet the average price remained higher than that of the previous month. According to Zhuochuang Information’s monitoring of liquid argon prices in 29 provinces (municipalities directly under the Central Government), the average national price of liquid argon in September was 1,045 yuan per ton, representing a slight increase of 4.6% compared to the previous month and a rise of 41.4% on a year-on-year basis. At the beginning of this month, the price was at a high of 1,130 yuan per ton, falling to 905 yuan per ton by the end of the month. In September, a rebound in production by carbon dioxide-related enterprises was common in regions such as Hebei and Henan; the shortage of resources eased, and market negotiation prices declined steadily. Towards the end of the month, prices rose again in some areas like Shandong due to resource constraints. Overall, the negotiation prices in China’s carbon dioxide market in September showed a downward trend compared to the previous month. According to data from Zhuochuang, as of September 30, the average price in this market was 348.05 yuan per ton, a decrease of 7.51 yuan per ton compared to the end of the previous month. II. Market forecasts for October: As the National Day approaches, the market atmosphere becomes less favorable. In the short term, prices are likely to drop during the National Day period; liquid oxygen in North and Central China will remain within a narrow price range at high levels, while prices in East China are likely to see significant drops. As the National Day holiday approaches, negative factors such as speed limit restrictions and weak demand are piling up, resulting in a pessimistic market sentiment. Judging from the manufacturers’ efforts to clear inventory, pressure will still exist in certain areas on the last day before the holiday; therefore, Zhuochuang expects that a downward trend in liquid nitrogen prices during the holiday is inevitable. After the holiday, as capacity and demand recover, the market may stabilize for a short period before entering a downward trend marked by fluctuations. Following a rollercoaster third quarter, the liquid argon market is set to enter the fourth quarter, which is theoretically the most sluggish period, after the long holiday. In the short term, following the long holiday period, corporate inventories remain high, and there is still a risk of decline in many areas. However, in the long term, due to factors such as steel production restrictions, prices may stabilize, and a rebound in certain areas cannot be ruled out. It is expected that in the early ten days of October, due to the National Day holiday, trading in China’s carbon dioxide market will be sluggish, with prices likely to fall rather than rise. Demand is expected to recover after the holiday, and carbon dioxide production, which was halted or reduced due to various reasons earlier on, is also likely to resume gradually. Overall, however, there is a slight likelihood of an oversupply in the market, and it is anticipated that downward pressure on domestic carbon dioxide prices will increase in October.