SunSirs: Cost And Futures Fluctuated, PP Rose Slightly In The Third Quarter (7.1-9.30)

1.Price Trend

According to the data monitored by SunSirs, the domestic PP market in the third quarter of 2019 showed a volatile trend. As of September 30, the main offer price of T30S by domestic producers and traders was about RMB 8866.67 yuan / ton, up 2.70% from the beginning of the quarter.

2.Cause analysis

Upstream: at the beginning of this quarter, the propylene market in the upstream of PP was benefited by the sharp rise in the price of international crude oil at the end of the month. In the downstream of propylene, the domestic acrylic acid market is relatively stable and slightly fluctuating, which has little impact on the propylene market; the propylene oxide market fluctuates significantly this month, rising rapidly at the end of the month, with a monthly increase of 1.75% and a monthly amplitude of 4.70%, which may have a positive impact on propylene; in addition, the epichlorohydrin price fluctuates upward, with a monthly increase of 20.55%, which also supports the propylene price to some extent; the octanol price goes away in July. There was a peak trend. After the increase of more than 10%, it fell again. Now the price is close to the beginning of the month, which has a negative impact on propylene. By the middle of the quarter, the international crude oil market fluctuated violently, with several sharp decreases, and then recovered steadily, causing a phased negative for propylene. The profit margin of the downstream factory is acceptable, and the purchasing enthusiasm is good. The price of acrylic acid has been raised, but the overall demand in the downstream is general. Generally speaking, acrylic acid has little impact on propylene in the middle of last quarter; similarly, the price of propylene oxide has fallen after rising, which has little impact on propylene as a result; the market of n-butanol has been rising continuously, up 4.69% in seven days, which is good for propylene market; at the end of quarter, propylene was encountered by Saudi oil production units. Influenced by international news such as US President Trump's consideration of relaxing sanctions on Iran and Saudi Arabia's statement that oil production will soon resume, the international crude oil market suddenly dived after the surge, which had a certain negative impact on the propylene market. However, the supply of propylene was tight before and after the festival, and the current refinery inventory was low. The downstream polymerization factories are profitable, the customers are active in purchasing and active in transaction. With the completion of goods preparation, the profit of the merchants was sold, and the price of propylene fell in late September. The downstream polymerization plants are still profitable, but the polymerization plants in many regions in China are expected to implement the production restriction order, and it is likely that the demand will shrink in the later stage.

Product: the price of domestic PP in this quarter is subject to fluctuation and adjustment. The beginning of the quarter is at the end of on-site inventory digestion stage, and the inventory pressure is further reduced. In addition, the price of propylene at the cost end fluctuated higher, and the willingness of some businesses to hold up the price increased. Domestic PP offer fluctuated higher. Meanwhile, the sharp rise in futures also boosted spot prices. In August, the overall price of PP began to decrease. The maintenance capacity was 348800 tons, an increase of 37.43% compared with 258800 tons in July, and the input of new devices was lower than expected. In the middle of the quarter, the cost support from propylene also decreased, leading to factory price reduction due to many factors. But the demand side raw material inventory is low. PP market rose at the end of the quarter. The upstream propylene market is affected by the violent fluctuation of international crude oil, which has limited support for the cost end of PP. After the "double festival" stock up boom at the end of the quarter, combined with the air pollution control plan around Beijing Tianjin wing in China, many polymerization plants were shut down, the inventory of two barrels of oil PP and traders continued to decline, businesses actively shipped, and the inventory decreased significantly. Tight spot supply is good for price formation. By the end of September, PP futures fell in shock, which affected the confidence of the industry. The focus of spot price in most regions was loose, the market price fell back, and the weak market was in shock. The overall trading atmosphere was average. In terms of supply, in addition to Datang, which has resumed production, Baofeng phase II has started commissioning, and the market supply is expected to increase. At the end of September, the upsurge of goods preparation for downstream factories before the festival was basically completed, with fewer transactions at high-end prices.