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SunSirs: Supply Tends To Expand, PP Spot Price Drops Slightly (November 11-15)

November 19 2019 16:14:24     SunSirs (Eva)

1.Price Trend

According to the data monitored by SunSirs, the domestic PP market was weak in mid November, and the spot price fell slightly. As of November 18, the main offer price of T30S by domestic producers and traders was about RMB 8416.67 yuan / ton, down 1.56% from the beginning of the month.

2.Cause analysis

Upstream: Recently, the domestic propylene market price declined after rising, showing a peak trend. Propylene price started to decline from the end of October, and propylene inventory is still low. In the upstream, the overall market of the international crude oil market is relatively ideal, which has a certain positive effect on propylene. In the downstream, the demand for shutdown and maintenance of some downstream units in Shandong Province has decreased, which has a negative impact on propylene market. The price of acrylic acid in China is stable this week, which has no impact on the price of propylene. Propylene oxide has stabilized after a slight rise in recent days, up 1.03% on a weekly basis. However, epichlorohydrin prices continued to decline sharply this week, down 9.22%. Its downstream epoxy resin restricted its market, mainly weak finishing in the short term, which had a suppressive effect on propylene market. Generally speaking, propylene market has declined after rising in recent days, maintaining stability generally. At present, propylene inventory is low, crude oil and PP market are still ideal, but some downstream units are shut down, so it is expected that propylene market price will still be lowered in recent days.

Product: in mid November, the overall price of PP market fluctuated and adjusted, with a weak callback. Upstream propylene market volatility, limited support for PP cost side. In terms of supply, production of some shutdown and maintenance devices was resumed, and the operation rate of PP device rebounded. From the end of this year to the beginning of next year, the production capacity of PP also put a lot of pressure on the supply side, and the rapid expansion of production capacity of PP next year is basically foreseeable. It is said that in the fourth quarter, the domestic environmental inspection began, focusing on limiting the production of heavy chemical industries such as steel and chemical industry. This environmental protection policy may last until the end of March next year, which will affect the current PP social inventory slightly. In terms of demand, a small number of factories are in low demand and have no centralized replenishment. Under the influence of environmental protection policies, it is difficult to further improve the downstream operating rate, which is still low compared with the same period last year. Merchants offer to follow the fall, let the profit go single, the floor trading is flat. At present, the rate of petrochemical de stocking is slowing down. On the peripheral news, the report that China and the United States are expected to cancel the tariff increase in stages will boost the Asian market, but the International Monetary Fund will reduce the growth rate of global economic growth this year and affect the macro atmosphere.

3.Market Forecast

According to PP analysts from SunSirs, domestic PP prices fell slightly in mid November. Upstream propylene market shocks, limited cost support. For the replenishment of downstream factories, there is no centralized purchase, and the strategy of just need to take delivery is adopted. Due to the improvement of domestic operation rate and the expansion of production capacity, PP supply is expected to expand in the long term, and the price is under pressure. It is expected that the PP market will continue to be weak in the near future. It is suggested to pay attention to the supply of PP in the near future.

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

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