Chinese Polypropylene Market Weekly Reports (2020.05.08-05.14) - Wenzhou Mou'an Packaging Co., Ltd.

Chinese Polypropylene Market Weekly Reports (2020.05.08-05.14)

According to polypropylene valuation, the market was consolidated after the weakness of polypropylene market fell in the week. At the beginning of the week, due to the decline of futures and the limited follow-up of orders of terminal enterprises, the market turnover was weak. At the same time, the production quality of masks was controlled by the Chinese government and the high melting fiber fell rapidly, which led to the decline of PP market. The impact of imported low-cost goods sources aggravates the market’s low reporting mentality. However, some maintenance enterprises are centralized, which temporarily eases the pressure of market supply and demand. The mainstream quotation of Extruding grade pp ( Raw material of
PP Woven bags) dropped 200-300 RMB/ ton compared with last week, and copolymerization offer fell 100-250 RMB / ton compared with last week.

PP MARKET FORECAST NEXT WEEK. The trend of futures is general. Most of the downstream manufacturers’ foreign trade export orders continue to be poor. The manufacturers’ enthusiasm for purchasing is insufficient, and the transaction is just needed. It is expected that the PP aggregate market will continue to be weak and volatile in the near future.

1. Polypropylene market

1) Domestic polypropylene market analysis.

This week the polypropylene market is stronger. After the May Day holiday, petrochemicals inventory accumulated to a medium high level, but boosted by the high opening and rising of polypropylene futures, PetroChina and SINOPEC enterprises not only increased their pace, but also further strengthened their market cost support. The atmosphere of business speculation was on the high side, and the market reported a small increase. In the downstream, due to the current strong price of raw materials, the factory continues to maintain rigid demand for goods, and the volume of firm offer transactions is not much. In the later stage, the terminal enterprises’ resistance still exists, the unilateral rise is difficult to sustain, and the trend of strong shocks will be maintained in the short term. As of the closing, the mainstream price of wire drawing is 7600-7900 yuan / ton, and the mainstream price of copolymerization is 7600-8100 yuan / ton.

2) Domestic polypropylene futures analysis.

With the end of the fiber speculation, the excess fiber inventory needs to be digested. Refining and chemical enterprises have turned back to normal production scheduling, and the low-cost imported resources are concentrated in Hong Kong. The market accumulation is expected to increase. At present, the two oil inventories are at a higher level than in previous years, the expectation of import arrival and macro recovery is not good, the confidence of businesses is insufficient, and the short-term pre-sale orders are mainly in the near future. In the near future, the ex factory price of petrochemicals / PetroChina is in a downward channel, the demand side is weak, and market trading is difficult to be large. In terms of technology, in terms of the average system, the 10-day average above the K-line is suppressed; the MACD index green column is growing; and the KDJ index is warped. To sum up, pp2009 contract short-term shocks. The fluctuation range is expected to be 6700-7000. In operation, it is recommended to operate cautiously with high throwing and low suction.

2. Polypropylene supplying

This week’s start-up analysis of polypropylene enterprises.

This week, the maintenance loss of domestic polypropylene plant was 6.46, an increase of 192 thousand tons or 42.29% compared with that of last week (45400 tons). In the week, Dalian organic and Pucheng clean energy devices began to be overhauled as planned; Yanshan Petrochemical production line was repaired and production resumed. The early-stage shutdown devices of Yan’an refinery, Shenhua Yulin, Shenhua Ningshan coal to liquid, Dushanzi first line, Tianjin Zhongsha and Tianjin United have not been restarted. On the whole, the planned unit maintenance is concentrated in North China, Northeast China and Northwest China.

3. Polypropylene Demands

Polypropylene woven fabric: the average operating rate of domestic pp woven industry this week is the same as last week, and the average operating rate of domestic woven pp industry is maintained at 59.11%. There is no significant change in the overall start-up this week. In Shandong Province, the overall start-up of plastic knitting industry is still at a low level because the overall order is lower than expected, and the enterprise profit is still difficult to maintain. In Jiangsu and Zhejiang Province, the week’s raw material price is mainly weak, and the overall order of local PP Woven enterprises is stable, so the overall start-up remains normal. The working rate of WOVEN PP industry in Shandong was 52.00% in the week, which was the same as last week; that in Jiangsu and Zhejiang was 68.00% in the week, which was the same as last week. BOPP: the average operating rate of
BOPP manufacturers this week is 51.86% or so, slight adjustment of start-up, coming of the traditional off-season, insufficient downstream demand, sporadic orders of enterprises, and pessimistic attitude of the operators. In order to reduce the inventory pressure, the membrane plants take turns to overhaul, so the start-up rate is still low, and the overall start-up rate is about 50%. It is expected that the start-up rate of the manufacturers will remain stable next week, the two lines of Zhejiang Kaili will take turns to overhaul, Panjin Jintian will take turns to overhaul, Tong will take turns to overhaul The two lines in chengjintan are overhauled in turn, one in Shuangliang, Jiangsu and one in Huayi, Xiaoshan.

4. Polypropylene market industry chain

Crude oil: in the week, Saudi Arabia’s commitment to expand production reduction in June provided strong support for the rise of oil prices. On May 11, according to market news, Saudi Arabia will unilaterally reduce production by 1 million barrels / day in June, and Saudi Arabia’s production in June will be seven hundred and forty-nine point two Million barrels per day, if Saudi Arabia fulfills its commitment of additional production reduction in June, its crude oil production will drop to 2002 The lowest level since the middle of the year. According to Saudi officials, the purpose of Saudi Arabia’s move is to encourage OPEC + member countries and other production countries to comply with their production reduction commitments and provide additional voluntary cuts to support the stability of the global oil market through this additional reduction. In addition to Saudi Arabia, OPEC + also announced production cuts, including Russia’s crude oil and condensate production dropped to 9.45 million barrels per day, and Kazakhstan promised to reduce production by 390000 barrels per day from May to June. In the United States, Baker Hughes data also shows that the number of crude oil wells in the United States has declined significantly, and the activity level of oil exploration enterprises has dropped to a historical low. Shale oil fields of oil exploration enterprises, including Chevron, ExxonMobil and continental resources, have reduced production in an all-round way. In addition, countries around the world relaxed the epidemic blockade after the epidemic was stable, and actively resumed economic production, which eased the market’s worries about the decline of crude oil demand.

Propylene: in this cycle, Asia’s propylene market continues to push upward. On May 13, Asian propylene market was quoted at 748-754 US dollars / ton CFR China and FOB South Korea at 703-709 US dollars / ton, both up 50 US dollars / ton compared with last week’s closing. A PDH factory in Shandong Province was overhauled and purchased spot propylene to support its own use. At the same time, China’s domestic supply was tight, which supported the enthusiasm of downstream import inquiry and the enthusiasm for buying improved. In addition, in recent years, the start-up of some oil production units in South Korea has declined, and the spot supply has decreased. Under the influence of the new crown epidemic, the domestic demand for polypropylene and raw materials in South Korea is strong, the spot supply on the market is tightened, and the surplus export is relatively limited, boosting the indicative quotation of propylene in Asia higher.

5. Polypropylene market outlook

To sum up, PP market price is expected to be weak and volatile. On the supply side, due to the price difference between the internal and external market in the early stage, the imported resources will arrive in Hong Kong in the near future, which will impact the market in the later stage. The confidence of the merchants is insufficient, and the short sales in the near future are mainly for the short sales. The trend of futures is general. Most of the downstream manufacturers’ foreign trade export orders continue to be poor. The manufacturers’ enthusiasm for purchasing is insufficient, and the transaction is just needed. It is expected that the PP aggregate market will continue to be weak and volatile in the near future.

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