On May 5th, the General Plastics Index was 830 points, unchanged from yesterday, a decrease of 29.12% from the highest point in the cycle of 1,171 points (2021-10-14), and an increase of 27.11% from the lowest point of 653 points on April 6th, 2020. (Note: The cycle refers to 2011-12-01 present)
In April, the general plastic industry saw an overall red trend. After the Qingming Festival, the general material consumption market has gradually taken over the pattern of downstream resumption of work in March. At the same time, March and April are also the peak seasons for some plastic products such as PE. Coupled with the release of pre holiday stocking demand during the May Day holiday, multiple consumer side benefits are added to the April rigid demand base. The strengthening of international crude oil at the beginning of the month in the remote upstream injected strong cost support into the general plastic industry. Except for EVA, the general material market has shown a positive trend during the month, boosted by demand and cost.
Fundamentals: The overall trend of upstream raw materials is improving, with sustained strong cost support. The average monthly load of the industry is about 74%. During the month, production lines of enterprises such as Shenhua Baotou and Donghua Ningbo underwent maintenance, and some enterprises continued to enter the maintenance process, leading to a reduction in market supply. The inventory of production enterprises is gradually being digested, and the supply pressure is gradually easing. In terms of demand, downstream enterprises of PP have remained stable with small fluctuations, and replenishment operations are mainly in demand, resulting in mediocre market trading activity.
Leading factor: PP raw materials strengthened alternately in April. After the international crude oil prices rose in the first half of the month, they were consolidated and put into operation; Propane was boosted by the external market and stopped falling and rose in the middle of the month; Methanol supply and demand are moderate, and stocking demand is driving up the month end market. Driven by the cost side rotation, polypropylene from various process routes has gained more profits, which is the main guiding factor for the polypropylene market in April.
After the holiday, the supply of goods is expected to tighten, and the supply side will continue to decompress. But terminal enterprises operate steadily, and stocking up is essential to maintain production. Moreover, the pre holiday stocking volume is not significant, and it is expected that the PP market will remain stagnant in the short term.
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