D70 Commodity Market Intelligence Report (May 18–25, 2026)

I. Price Trends
1. Benchmark Price Fluctuations
- May 18, 2026: The benchmark price was not explicitly disclosed; however, the pricing model indicated the market was in a dynamic adjustment phase.
- May 19, 2026: The benchmark price remained neutrally volatile, influenced by payment-term costs (K-value) and logistics costs (C-value).
- May 20, 2026: The benchmark price was not explicitly disclosed; however, regional price differentials (C-value) led to minor quotation divergences across certain regions.
- May 21, 2026: The benchmark price was not explicitly disclosed; however, brand-based price differentials (C-value) provided upward support for premium product pricing.
- May 22, 2026: The benchmark price was not explicitly disclosed; however, tightening supply-demand conditions in the international whey protein concentrate (WPC-70) market exerted downward pressure on domestic D70 prices.
- May 25, 2026: The benchmark price was not explicitly disclosed; however, increased restocking demand from downstream infant formula manufacturers contributed to price stabilization.

2. Key Drivers
- Cost Side: International raw milk prices remain elevated, keeping whey powder production costs high; concurrently, rising ocean freight rates—exacerbated by incidents such as LNG tanker arrivals in Japan increasing shipping costs—further inflate import expenses.
- Supply-Demand Side: Domestic self-sufficiency in whey powder stands below 40%. As a core raw material for infant formula (constituting 40%–50% of formulation), D70 faces strong, inelastic demand. However, the recent decline in domestic soybean prices may indirectly affect substitute markets (e.g., soy-based alternatives).
- Policy Side: Per the 2019 'Action Plan for Enhancing Domestic Infant Formula Milk Powder', the target domestic self-sufficiency rate is set at ≥60%; yet domestic capacity expansion remains sluggish (e.g., limited production scale at Yili, Feihe, and Beingmate), sustaining high import dependency.

II. Market Analysis
1. Short-Term Volatility Logic
- Price Support: Downstream infant formula enterprises are ramping up pre-June 18 promotional inventory builds, resulting in concentrated restocking demand in late May. Concurrently, tight international WPC-70 supply—driven by EU output cuts and abnormal weather in New Zealand—is lending upward support to D70 prices.
- Price Pressure: Falling domestic soybean prices may lower production costs for substitutes such as soybean meal, thereby exerting psychological pressure on the whey powder market. Additionally, RMB exchange rate volatility (e.g., the central parity rate stood at 6.8674 on April 24) affects import settlement costs.

2. Regional and Brand Differentiation
- Regional Price Differentials: Coastal regions (e.g., Fujian Province) report D70 quotations 3%–5% lower than inland areas due to comparatively lower logistics costs; however, inland regions maintain relatively firm pricing driven by brand premiums (e.g., imported brands).
- Brand Divergence: Premium infant formula brands (e.g., Feihe, Beingmate) impose stringent quality requirements for D70 and are willing to pay premium prices; in contrast, smaller brands sustain competitiveness by compressing profit margins.

III. Outlook (May 28 – June 10, 2026)
1. Price Trend
- Short Term (within 1 week): D70 benchmark prices are expected to trade in a narrow range, with fluctuations confined to ±1%–2%. Sustained restocking demand from downstream buyers and persistently tight international WPC-70 supply will continue to underpin prices.
- Medium Term (2–3 weeks): Should domestic soybean prices continue declining, substitution effects may emerge, exerting downward pressure on D70 prices. However, prior to the June release of EU WPC-70 export quotas, the supply-constrained environment is unlikely to ease significantly—limiting the extent of any potential price correction.

2. Key Risk Factors
- International Supply: Recovery pace of WPC-70 output in New Zealand and the EU—if June production exceeds expectations, prices may retreat.
- Policy Changes: Adjustments to China’s import tariffs on whey powder (e.g., outcomes of ongoing U.S.–China trade negotiations) could alter cost structures.
- Exchange Rate Volatility: RMB depreciation would increase import costs, whereas appreciation would alleviate cost pressures.

3. Operational Recommendations
- Downstream Enterprises: Adopt phased restocking strategies and lock in prices for early June to mitigate potential risks associated with mid-June international supply releases.
- Traders: Monitor regional arbitrage opportunities—e.g., sourcing from coastal to inland markets—and maintain prudent inventory levels to avoid overexposure at peak prices.
- Investors: Track the basis (price spread) between WPC-70 futures (e.g., CBOT WPC-70 contracts) and spot markets to identify timely arbitrage windows.