News summary
The spot price of polyolefins was boosted upward by macro factors. However, due to the restart of maintenance equipment, the supply increased, the operating rate increased slightly, the cost support of PE and PP was weak, demand gradually entered the off-season, and market transactions were weak. The trend of polyolefins is expected to fluctuate. Investors are advised to temporarily adopt a wait-and-see attitude and pay attention to the risks of fluctuations in crude oil prices and changes in demand.
Newsletter text
[The spot price of polyolefins rose due to macro positive results]
Market observations show that due to macroeconomic factorspowerballyesterdayDue to the positive impact of the company, the price of polyolefins in the spot market has recently shown an upward trend. However, the early start of some maintenance units led to an increase in supply and a slight increase in start-up load.
[The crude oil market continues to be weak, putting pressure on cost support]
The continued downturn in crude oil prices has brought profit opportunities to the production profits of oil-based polyethylene (PE), but the support on the cost side is relatively weak. For polypropylene (PP) made from PDH, production profits remain at acceptable levels. Although operating rates are expected to continue to increase in the future, the potential impact of rising propane prices on production profits needs to be closely monitored.
[Basis and inventory conditions have been improved]
Petrochemical inventories fell to 84 percent from 860,000 tons last weekpowerballyesterday.5,000 tons, a decrease of 15,000 tons. In terms of basis, the basis for LL (Linear Low Density Polyethylene) East China market is-30 yuan per ton, while the basis for PP East China market is-70 yuan per ton.
[Operating rate increases, supply increases]
The continued weakness in crude oil prices led to profitable and fair production profits of oil-based PE and PDH PP respectively. Operating rates rose to 83.8%(an increase of 2.8%) and 80.9%(an increase of 3%) respectively, and supply increased accordingly.
[Import and export window status has changed]
In terms of import and export, PP's import window has been closed, while LL's import window is open.
[Downstream demand remains stable, agricultural film enters off-season]
Downstream demand generally remained stable. The operating rate of PE downstream agricultural film plants dropped to 17%(down 2%), and the operating rate of packaging film remained at 54%. The operating rates of the plastic weaving and injection molding industries downstream of PP were 45%(down 1%) and 50%(no change) respectively, and the BOPP operating rate stabilized at 48%.
[Market strategy recommendations remain wait-and-see]
In view of the current market conditions, investors are advised to maintain a wait-and-see attitude and should not rush to make investment decisions.
[Risk warnings involve fluctuations in crude oil prices and recovery of demand]
Investors need to be wary of possible large fluctuations in crude oil prices and the risk that the recovery speed of market demand may not meet expectations.