1. Price Trend
According to the data from SunSirs, the domestic PP market trend in November fluctuated with each type of spot price varied. Up to November 30, the mainstream offer price of T30S from domestic manufacturers and traders was around 8,833.33RMB/ton, a decrease of 1.95% from the beginning of the month.
2. Market Analysis
Upstream: The upstream propylene fluctuated in November, and the spot price of domestic propylene fell downward. The decline has begun to take shape from the end of October. The upstream international crude oil is affected by OPEC's output reduction policy or extending news. The market is generally relatively ideal and has a certain effect on propylene. It is reported that some propylene oxide and polypropylene powder plants have reduced their load and demand has declined, which has a negative impact on propylene. Epichlorohydrin prices have continued to plummet and have fallen by 28.19% since November 1. At present, its cost support is weak, and the downstream epoxy resin is weak. The market waits and sees the atmosphere. There are no obvious positive factors lacking in upward momentum, and it has a significant suppressing effect on the propylene market. Therefore, the propylene market has fallen slightly for two days. The domestic inventory is average, but the downstream equipment partly reduces the load, so it is expected that the propylene market price may continue to decrease in recent days.
Products: In November, the spot price of the PP market fluctuated, and the overall market was weakly sideways. The upstream propylene market weakened, and the cost-side support for PP was limited. On the supply side, the current PP plant operating rate has increased. From the end of the year to the beginning of next year, the production capacity of PP also puts a lot of pressure on the supply side, and the production capacity is still in the rapid expansion stage. Industry competition is becoming increasingly fierce and profits are squeezed. On the demand side, plastic woven, BOPP film, non-woven fabric, and injection molding of the main downstream plastic products performed weakly. Downstream products have been sluggish, and there has been no centralized replenishment of downstream factories, and procurement has been made on dips. Generally, from the perspective of macro economy, the growth rate of China's plastic product output in 2019 has slowed down. The reduction of China-US economic and trade friction makes the export of plastic product decrease, and the increased pressure on the transformation and upgrading of plastic enterprises are important factors that have compressed the profits of plastic enterprises. At the end of the month, petrochemical inventory was digested smoothly. Business tasks were completed one after another. Spot prices were firm, and the market had no clear price guidance currently. At present, the domestic PP is sideways. The price is weak, and there is no opportunity to reverse from the downward channel.
3. Market Forecasting
SunSirs' PP analysts believe that domestic PP prices generally fluctuated in November. The upstream propylene market is weak, and cost-side support is limited. There is no centralized procurement for the replenishment of the downstream factories, and a just-in-request strategy is adopted. Due to the expected expansion of domestic production capacity, the supply of PP shows a long-term expansion trend, and industry competition has intensified. It is expected that the recent PP market may continue to adjust slightly, and it is recommended to pay attention to the recent PP supply situation.
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