PP prices rose strongly after the festival

According to the data monitored by the business community, the domestic PP market is strong after the festival, and the spot price of each brand has increased significantly. As of February 24, the mainstream offer price of T30S (wire drawing) was about 9383.33 yuan / ton, an increase of 11.49% compared with the average price at the beginning of the month.


Cause analysis


PP upstream propylene domestic market also ushered in a surge mode after the Spring Festival. The price before the festival was 7060 yuan / ton, which was 8527.27 yuan / ton as of February 23, with an increase of 18.50% in seven days. Since the resumption of work on the 18th, the price of propylene has gone up continuously, changing the downward trend of last month’s Propylene price. Now the factory stock is less, the shipment situation is more popular. In general, due to the shutdown of some units in the United States and Japan due to natural disasters, the propylene production loss is large, and the short-term recovery capacity of the units is limited. At present, the domestic inventory is low, the downstream operation rate is ideal, and the demand is strong. It is expected that the propylene price will rise again in the future.


At present, the propylene market is rising rapidly, PP is strongly supported by the cost side, and the recent increase is relatively large. At the time of commencement after the festival, there was a negative effect of capacity expansion and accumulation in the site. Donghua energy Ningbo phase II project began to put into operation, and it is reported that the propylene product production line was running smoothly. Previously, the business association had predicted that the accumulation of PP inventory prices in the two oil and petrochemical companies would gradually begin during the Spring Festival. In the near future, the PP material, grain and oil inventory range was 850000-900000 tons, and the increase of main ports in the inventory was less than expected.


But judging from the results, these two bad news failed to dominate the market. The first reason is that the price of PP is weak inside and outside. The cold disaster in the United States resulted in the reduction of crude oil production and the rise of crude oil price. In addition, many chemical enterprises in the disaster stricken areas of the United States stopped production, and the devices were frequently overhauled. Similarly, affected by the earthquake in Japan, the plant was also shut down on a large scale, and the restart time was uncertain. Worried about the shortage of chemical products, the industry’s attitude towards the price of bulk goods increased, and the external market PP generally rose sharply, boosting the domestic spot price. Secondly, affected by the local new year’s advocacy, the downstream industry has resumed work rapidly this year, and the demand for PP has warmed up rapidly. The northeast region even has a certain degree of tight supply, and the accumulated stock has declined during the Spring Festival. It is reported that on the 23rd, the two oil stocks decreased by 20000 tons to 890000 tons. But at present, the price region has been at a high level, and the downstream purchasing operation is gradually cautious.


In terms of fiber materials, according to the data monitored by the business community, as of February 24, the mainstream offers of domestic producers and traders Z30S (fiber) also rose sharply, with the price at about 9383.33 yuan / ton, an increase of 8.90% compared with the average price level before the festival. In terms of production scheduling, the proportion of domestic fiber PP production scheduling is about 13%, which increases slightly after the festival, and the overall production scheduling is stable. After the festival, the logistics and transportation gradually recovered, and the supply of domestic fiber materials was sufficient. In terms of price, it is also affected by the strong external market. In addition to the inflation expectation of the current macro market, it is expected that the market trend of fiber PP will keep pace with the drawing material.


PP meltblown material after the trend of shock based, recently rose. As of February 24, the average quotation of pph-y1500 sample enterprises monitored by business society was 11300 yuan / ton. At present, the overseas epidemic situation is still very complex, and the number of confirmed cases has further expanded. The implementation of masks in many countries has increased the demand of overseas melt blown PP, and the increase of domestic orders has raised the price of melt blown PP to a certain extent. However, the domestic demand for epidemic prevention materials remained stable. By the 22nd, the high-risk areas of the epidemic had been cleared, and there were no new cases for more than 14 consecutive days. The domestic epidemic prevention situation is stable and good, and the supply of masks and other epidemic prevention materials is abundant. The surplus of suppliers in the melt blown fabric manufacturing market has not improved, and the profit is still not ideal. The melt blown material up market, business community that the same as other brands of PP products, is a positive cost side and the common impact of tightening overseas supply. It is expected that the market trend of melt blown PP will be stable.


Future forecast


Business community PP analysts believe: after the Spring Festival, the domestic PP spot market is strong. The price of upstream propylene rose rapidly, which strongly supported the cost side of PP. The accumulation of polypropylene oil and social inventory was less than expected, and the overseas supply was continuously tightened due to complex factors. The downstream resumed work faster, the operating rate increased, and the resistance to the current high supply increased. It is expected that there will be no supply pressure on PP in the short term, but some businesses have begun to reduce prices and arbitrage, and it is expected that PP may usher in the adjustment market in the near future. In the medium term, the fundamentals are stable, and the PP market is in a good direction.


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