SunSirs: Weak demand and high inventory levels have weakened PP prices. (3.17-3.27)

1. Price Trend

According to data monitored by SunSirs, the domestic PP market weakened in the second half of March, and spot prices were mostly lowered. As of Monday, March 27, domestic manufacturers and traders of the T30S mainstream offer price was around 6665.67 yuan / ton, which is a 5.45% drop from the average price on Monday, March 16.

2. Factor Analysis

Upstream: In terms of upstream propylene, due to the recent game of the international crude oil market, crude oil prices have repeatedly lowered. Because the previous production and inventory of propylene were low, the previous decline was not significant. At present, there are not many propylene inventories and the operating rate is not high, so manufacturers have less pressure to ship. Isopropanol downstream is one of the raw materials of disinfectants. Due to the impact of public health events, prices have recently raised sharply, which has a favorable impact on propylene. But from the results, the boost is limited. In addition, the profit margins of other downstream factories are narrow, and the industry is generally bearish. It is expected that the price of propylene may start to stabilize in the near future, and it may drop in the later stage;

Products: The current domestic PP market is weak and the market is still heavier. Most petrochemical manufacturers have lowered their ex-factory prices, and traders' offers have fallen. The downstream plant operating rate of PP is average, the enquiry atmosphere is sluggish, and the demand follow-up is weak. Business confidence is not strong, inventory is high, lighten up at the end of the month to allow sales. The overall performance of the futures is also bearish, with a clear downtrend.

3. Market Forecast

SunSirs' PP analyst believes that the domestic PP spot market continued to be weak in the second half of March, the upstream propylene price was not strong, and the support for PP cost side was poor. The resumption rate of downstream plants needs to be further improved. On the demand side, the follow-up of orders is not timely, and small orders are the main transaction. Petrochemical plant inventory pressure is relatively large, the operator monthly profit to complete the task. It is expected that the recent PP market may continue to weaken.

If you have any questions, please feel free to contact SunSirs with marketing@sunsirs.com.