Price Trend
According to the data monitored by business associations, the PP market trend was basically stable in the third week of August, with a narrow range of shocks adjusted. As of August 19, the mainstream offer price of T30S by domestic producers and traders was around 8666.67 yuan/ton, up 0.39% from the beginning of the week.
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II. Cause Analysis
Upstream: In the upstream, international crude oil rose sharply last week and then fell sharply. Although there was a slight recovery in the later period, market expectations were not satisfactory, which had a negative impact on propylene. Affected by typhoon, loading of some upstream and downstream enterprises in Shandong Province was blocked last week and the turnover was sluggish. Now most of them have returned to normal and the volume of propylene shipments has increased. Recent sharp fall in propylene prices has made downstream factories more cautious in purchasing, mainly in need, and the pressure of refineries’shipments continues to rise, which has warmed up the mood of profit and drainage. The price of propylene enterprises in Shandong Province has been stable in early August, and began to fall continuously on the 5th, falling 450-500 yuan/ton on the 8th, rising again on the 10th and rising 200 yuan/ton on the 14th. About RMB / ton, stabilized on the 15th, and began to decline sharply on the 17th. About 300 RMB / ton were traded in three days. At present, the market turnover is around 7400 – 7650 RMB / ton, and the mainstream price is about 7400 RMB / ton.
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Products: In the third week of August, the overall price trend of PP market remained stable and narrow adjustment. This week, the start-up rate of polypropylene enterprises in China was 79.48, with a decrease of 9.83% in circumference. Next week, Qingdao Dalian Refinery, Shenhua Yulin, Jiujiang Petrochemical, Yanshan Petrochemical Dimerization, Zhongan Union and Yangtze Petrochemical Company plan to start, while Ningbo Fude plans to stop. It is expected that the start-up rate of enterprises will rise somewhat. Supported by petrochemical overhaul and certain cost aspects, the merchants are not willing to let the profit slip, but the difficulty of shipment remains unchanged and the transaction negotiation is concluded. Two barrels of oil PP stocks, TRADERS’stocks and social stocks all declined. The demand of end-users is flat, the enthusiasm of reserve is low, and the driving force of upward price is insufficient. Zhenhai Refinery (Sinopec East China) PP ex-factory price, drawing T30S quoted 8800 yuan/ton. Jiujiang Petrochemical (Sinopec East China) PP ex-factory price, drawing T30S offer for 8600 yuan/ton. Fushun Petrochemical (CNPC East China) PP ex-factory price, drawing T30S offer for 8600 yuan/ton. Daqing Petrochemical (CNPC Northeast) PP ex-factory price, drawing T30S quoted 8750 yuan/ton. Dalian Organic PP (CNOOC Northeast) ex-factory price, drawing T30S offer for 8600 yuan/ton.
3. Future Market Forecast
PP business analysts believe that this week, domestic PP prices stabilized in a narrow range of adjustments, the upstream propylene weakness fell, the cost of PP support weakened. The start-up rate of domestic polypropylene enterprises has declined, and there are many parking and maintenance devices. Dealers follow the market, downstream demand continues to weaken, trading atmosphere is flat. It is expected that PP trend will probably continue to consolidate and operate in the near future.
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