The Value of By-products

We return to the last report's questions, separating confirmed announcements from things that may happen.

Real yields moved more. On 9/18, the US 10-year nominal yield was 5.01%, real yield 2.68%, and BEI, their difference, 2.33%. Since 9/4, real yields rose while BEI edged down. BEI includes risk compensation and liquidity as well as inflation expectations. These figures alone cannot establish that oil drove real yields higher.

Gold rebounded after the Fed hiked. Gold's reference price on 9/18 was USD 4,383.45 (Trading Economics). In our model, using a separate gold-futures series, its 21-trading-day return was −2.649%, versus −9.151% predicted from real-yield changes. The gap is +6.502 percentage points. It is unexplained by the model, not a judgment of undervaluation.

The Bank of Japan also hiked. On 9/18, the Bank of Japan decided to raise its policy rate from 1.00% to 1.25%, in a 7–2 vote, effective 9/24. Reports that the yen weakened that day illustrate why the hike alone cannot explain the exchange rate's direction (Bank of Japan decision; FX reaction reported by Nation Thailand★).

Bitcoin needs different observations. In the regression sample using 21-trading-day changes, the correlation with real yields was −0.63 for gold and +0.06 for Bitcoin (through 9/18; our model). Bitcoin's linear relationship with real yields was weak in this sample. Spot trading, ETFs and futures must be examined separately to understand the rise.

Prices below their peaks do not mean supply has normalized. Prices are 9/18 reference values; inventories and flows use the dates in each cell. Do not add different units and observation windows into one score.

Prices are commodity reference prices from Trading Economics for 9/18, distinct from official exchange settlements. Uranium uses Cameco's 8/31 long-term-contract indicator (Original uranium-price indicator); the copper premium is quoted in TE commentary. JKM remains blank because a same-date source was unavailable. Oil uses DTN settlements; Bitcoin and SPR use our collected values. ★marks figures still awaiting independent original-source verification.

US–European gas-price differences reflect liquefaction and transport constraints alongside regional supply and demand. Do not divide EUR/MWh by USD/MMBtu directly and call it tenfold. Nor does a lower sulfur price establish freer supply.

Sulfur supply is tied to oil and gas. Most sulfur today is recovered during oil and gas processing. Higher sulfur prices alone cannot quickly increase output. SMM estimated the Middle East accounts for about 25% of global sulfur production and 45% of seaborne trade★.

Reports of blocked routes have reference dates, too. In its 7/30 article, Argus reported virtually no sulfur cargoes through Hormuz since 7/18★. This cannot be extended as an exact 0 through 9/18. Latest transit results are unconfirmed and remain so in the gauges.

Prices rose, then fell. China's sulfur reference price fell about 31%, from CNY 11,084/tonne in June to CNY 7,669 on 9/18. ADNOC's July posted price was reportedly USD 1,000/tonne★. Yuan reference prices and dollar export prices are different series. Without a common starting point, do not group them as fivefold this year (Trading Economics; Argus/SMM).

Expensive inputs can reduce output. Reports described low utilization at Chinese phosphate-fertilizer plants, reduced Indonesian nickel-intermediate output and US phosphate-fertilizer curtailments★. These show the burden on sulfur-consuming plants. But weaker demand alone is not an established cause of falling sulfur prices. Alternative supplies and inventory use must also be checked.

Export restrictions are not one blockade. Announcement dates, products, exemptions and expiry dates differ. The six items below are a history of restrictions, not a claim that all six remain locked today.

The year-end deadline for Chinese sulfuric acid is an industry report, not an official notice. For Kazakhstan, verify both the ban order and the cancellation's scope. If it is unknown whether legal or administrative measures ended, current trade volumes cannot substitute for that judgment (9/18 sulfuric-acid trade report; Kazakh railway restriction list).

Suppliers changed. SMM's January–May Chinese sulfur-import tally lists Oman at 541 thousand tonnes, Korea 485 thousand, Japan 316 thousand and Canada 286 thousand★. These alternative supplies also matter when reading Middle Eastern shipping disruption. Omani origin alone does not establish that all cargoes departed from ports outside Hormuz.

Costs inside and outside China also differ. Reports described a gap between Chinese domestic sulfuric-acid prices and international prices★. But domestic, export-port and import-arrival prices have different terms. One cannot generalize that every overseas plant buys acid at a fixed premium to China. Read it as a cost advantage while the price gap persists.

Sulfur and sulfuric acid enter many industries. Input costs, consumer prices and recovery after supply returns move at different speeds.

SMM's 75–80% figure for Indonesia refers to sulfur import dependence, not a claim that all of that share comes from the Middle East★. We also omit the claim that sulfur is 130% of fertilizer's total cost because the denominator is unexplained. Even a conclusion of high input costs needs a calculable basis.

For copper, separate the international price from the spot premium. Copper was below its August high, but China's Yangshan premium was reportedly USD 121/tonne on 9/17★(Copper-market commentary). This is an additional cost for physical copper entering China, not the same measure as copper futures.

The chart below shows Yahoo HG=F daily closes for COMEX copper futures. Distinct from the earlier TE reference price, it follows one series from June through 9/18.

ETF money arrived on Bitcoin's up day. US Bitcoin spot ETF net inflows on 9/18 were USD 433 million. This final figure exceeds the early tally and is distinct from a total including Ethereum ETFs (ETF flow ledger).

On the same date's Binance UTC daily candle, Bitcoin moved from USD 76,417.01 to USD 80,883.87, 5.85% higher. Spot market-buy minus market-sell volume was +1,957.77 BTC, versus +6,743.52 BTC in futures, roughly 3.4x (our collection). This is trade direction on one exchange, not dollars entering the entire market or a count of new buyers.

Stablecoin circulation grew about USD 294 million between ledger observations, then shrank about USD 1.15 billion in the next observation. ETFs use US reporting dates, trades UTC daily candles, and stablecoins collection timestamps. Even identical dates do not align precisely to the same trading hours.

Bitcoin ETF inflows on 8/19–21 were USD 517.2 million, USD 606.3 million and USD 307.5 million respectively. Stablecoin changes were +USD 749 million, −USD 130 million and +USD 677 million. They did not point the same way on all three days. Do not count three pipelines then versus just one now.

We also correct the long window's name. In the latest tally, stablecoins changed +USD 3.791 billion/−USD 3.113 billion over the last 30/90 observations; spot ETFs changed +USD 3.276 billion/−USD 3.992 billion over the last 30/90 reporting days. ETFs combine BTC and ETH, but ETH's short history constrains long comparisons. This 90 is not a common 90-calendar-day window (9/20 tally).

Tokenized Treasuries are observable again. The 25 assets received on 9/20 had roughly USD 14.589 billion under management. This series must no longer be treated as unobservable. But its newly accumulating change history is short. AUM changes include interest and valuation effects and cannot be added to ETF net inflows (RWA.xyz; our collection).

Break-even levels also depend on method. Our net-inflow-weighted model puts the average ETF purchase price near USD 84,872 on 9/18. An external report's USD 86,000 (9/14) differs in method and date★. Neither establishes where selling will occur. Check price together with volume after the 9/25 options expiry.

By-products generate revenue. Korea's 485 thousand tonnes of sulfur supplied to China (January–May, SMM★) show by-products' economic importance. Yet the 9/18 naphtha–Brent spread was −USD 6.59. This signals pressure on naphtha, not the profit or loss of an entire refiner.

Fertilizer, metals and battery-material producers bear sulfuric-acid procurement costs. The next report will examine September Korean trade under Customs Service HS 2503 and 2807 for sulfur and sulfuric acid. Company profit cannot substitute for export amounts not yet obtained.

The buyers of shares changed. September data in our Naver trading-flow tally cover 13 trading days through 9/17. KOSPI net buying was −KRW 9.79 trillion for retail investors, −KRW 13.19 trillion for foreign investors, +KRW 1.51 trillion for institutions, and +KRW 21.47 trillion for other corporations. Other corporations include direct share buybacks and ordinary corporate trades. It cannot all be read as companies buying their own shares.

The two stocks had a large impact. Of the KOSPI's −3.26% on 9/14, SK hynix contributed −1.66 percentage points and Samsung Electronics −1.13 percentage points, about 86% combined in our tally. A falling index does not mean every constituent fell (our index-contribution snapshot).

Won prices were below overseas prices. USD/KRW rose about 3.7%, from KRW 1,340.5 on 9/9 to KRW 1,390.0 on 9/18. Bitcoin's kimchi premium (Korean exchange price gap) was −1.81% on 9/18 and −1.5% on 9/20: Korean prices were below overseas prices converted to won. This gap alone cannot establish whether Korean investors were net buyers.

Households' fuel-tax relief continues through 11/30. The extension moves the benefit's expiry date; it does not mean benefits start then.

These are effects if current price and supply conditions persist, not confirmed corporate profits or losses. The same company may be affected oppositely by by-products it sells and inputs it buys.

The value of by-products is easy to miss if we look only at the core business's name. As supply recovers, advantages for sellers and users change. The question is not which stock to buy, but who sells what, buys what, and along which routes it moves. We recommend no asset purchases or sales.

The body and charts record publication-time information. Only section 10's gauges update with later observations. The eight items remain separate; no composite score. Manual updates, short histories and unconfirmed information are also marked on screen.

What #21 will revisit: current Chinese sulfuric-acid/phosphate restrictions, Saudi pipeline restart, crypto prices/flows after 9/25, October FOMC, Korean sulfur/acid trade, matching-window BEI, Mocha/Hanish control and passage, and October sulfur posted prices.