I. Review of Trends
This year, the overall performance of the domestic
polypropylene market is not good. The market is in a volatile and declining trend. In the first quarter, terminal demand did not show any positive performance, but crude oil and monomers provided support for the comprehensive cost. Petrochemical enterprises then issued a bid policy, which injected a lot of momentum into the spot PP market. Traders are not confident enough about the future market. They also dare not rush to reduce warehouse operations and choose flexible adjustment of quotation mainly. In the second quarter, the weakness of the PP market is obvious. Especially after the 51 mini-long vacations, the enthusiasm of downstream manufacturers to absorb goods is limited. Sino-US trade disputes are fermenting, and intra-venue insecurity is growing rapidly, making a profit the mainstream operation of traders. Until the beginning of June, thanks to the support of stable prices of petrochemical enterprises, the market price declines have been restrained, but from the overall situation, the market has not been divorced from the pattern of upper and lower weakness.
II. Aftermarket Impact
(1) Crude oil, propylene, the outer disk
In addition to the international oil price, propylene monomer, external and spot prices have been declining at the same time, which also shows that the latter two are more direct and sensitive to spot mapping. In the future, we should not only continue to induce mentality but also influence the trend of the polypropylene market.
(2) Supply of goods
In the second half of the year, there are many production lines for polypropylene plant maintenance. It is estimated that the total production capacity will reach 4.53 million tons. With some temporary and malfunction maintenance, the overall loss in the later period is still large. In terms of capacity expansion: It is said that the planned production capacity of the plant in the second half of the year is about 3.95 million tons. Zhongshan Coal PP Plant is scheduled to be put into operation on June 30, 2019, after the completion of the process. Dongguan Juzhengyuan polypropylene plant is currently in short supply. It will be officially discharged near the end of June.
(3) Petrochemical Price Policy
enterprises, a series of controllable or uncontrollable factors, such as profit fluctuation, inventory, labor cost, and transportation problems, are the driving forces for the introduction of price adjustment policies. Among them, the impact of inventory is more prominent. It is known that in the first half of the year, the inventory of the manufacturer was maintained at about 900,000 tons, while in the second half of the year, the new plant production plan was more than in previous years. Therefore, the situation of high inventory suppression is still difficult to improve. Petrochemical enterprises continue to operate in inventory, and the possibility of price reduction is high.
(4) Changes in downstream demand
According to the usual practice, the peak consumption season in China usually starts from August to the Spring Festival next year, with the experience of “nine gold and ten silver”. Although September and October are not the best sales time, they are the important nodes to lay the sales volume for the whole year. Therefore, the demand in the second half of the year is generally better than that in the first half of the year.
Because of the interweaving of multi-empty factors in the second half of the year, the market is facing more uncertainties. Market opportunities and risks coexist. However, due to the expected improvement of the demand environment, the expected improvement of the PP market in the second half of the year may be operated higher based on the first half of the year.