This week, the supply pressure of polyolefin remained high, but at the end of the month, most of the petrochemical plant prices were stable, and the tax adjustment led to some downstream manufacturers to take appropriate orders, the demand was ahead, and the polyolefin futures price showed a weak fluctuation trend. As of Friday’s closing date, L1905 contract closed at 8365 yuan/ton, down 65 yuan/ton per week, 0.77% per week. The highest price in the week was 8455 yuan/ton, and the lowest price was 8275 yuan/ton. In terms of position, the weekly position decreased by 45792 to 3019,000 hands, with a turnover of 969,300 hands. PP1905 contract closed at 8604 yuan/ton, down 3 yuan/ton per week, a weekly decline of 0.03%, the highest 8672 yuan/ton, the lowest 8490 yuan/ton. In terms of position, Zhou’s position decreased by 48,390 to 336,900 hands and turnover by 2.04 million hands.
This week, the spot market of polyolefin is mainly small consolidation, with two light market transactions, no obvious bright spot, the overall stability of TRADERS’quotations, and some small fluctuations. At present, the mainstream price of LLDPE is 8450-8650 yuan/ton, most of which have little change, only a few fluctuate around 50 yuan/ton; the mainstream price of PP wire drawing is 8600-8950 yuan/ton, most of which tend to be stable.
| PVA 0599 (PVA BF05) |
Fundamental analysis:
Cost side: Next week, the international crude oil shock may continue, but the focus is expected to move up. Despite the unexpected increase in U.S. crude oil inventories, it is mainly due to the sharp decline in exports and hindered refinery processing, which can be seen from the decline in refined oil inventories. Therefore, the downward trend of crude oil stocks will not change, and short-term increase will not become a long-term shortfall in pressure oil prices. Later, China and the United States paid close attention to the situation of trade negotiations, and two consecutive rounds of negotiations are expected to give market confidence. In addition, good expectations of overall OPEC output cuts in March also boosted oil prices.
Supply side: PE, this week, the number of domestic petrochemical plant maintenance has decreased, the loss of output is 11.4 million tons. Next week, new maintenance enterprises have Zhongtian Hechuang. Preliminary forecast is that the loss of next week’s maintenance will be around 10.1 million tons, a decrease of 0.13 million tons annually. On the import side, port stocks continue to accumulate slightly, and the overall domestic supply pressure is still in place. For PP, the loss of equipment maintenance this week was about 34.8 million tons, 0.24% less than last week’s 34.9 million tons. Dalian Xitai plans to overhaul next week. It is estimated that the amount of overhaul losses will rise annually, but Ningxia Coal and delayed installation and overhaul plans have been delayed, and the expected overhaul effect is still difficult to reflect in the short term. In terms of new capacity, Jiutai energy supply is expected to be put into the market in mid-April, including PE plant capacity of 300,000 tons, production capacity of 7042, PP plant capacity of 350,000 tons, production of L5E89.
Demand side: PE, with warmer weather, plastic film demand is expected to weaken, pipe market will climb, other downstream start-up changes little. PP, downstream demand remains stable, the overall lack of bright spots. Under the influence of tax reduction, some of the demand is in front of the market. It is estimated that the short and medium-term downstream factories just need to purchase, which has limited support for the market.
| PVA |
Inventory situation: This week coincides with the end of the month, coupled with the reduction of VAT in April, which stimulates some buyers to purchase. Petrochemical inventory declines rapidly. Petrochemical inventory is transformed into social inventory. Tax reform is implemented on April 1, and social supply is under pressure or constitutes the main idea of vacancy. Inventory is expected to decline slowly next week. After the accumulation of holidays, the relatively weak demand can hardly make the inventory consume quickly in the short term. The inventory structure is the key to affect the recent market trend.
In terms of cross-variety arbitrage, PP supply pressure will be greater than PE in the long run this year, but in terms of rhythm, the second and third quarters may be the concentration period for new production capacity. In the short term, we need to pay close attention to the differences between PE and P P in inventory status, late equipment maintenance and new production capacity delivery. At present, the operation is difficult and wait-and-see is appropriate.
Conclusion and suggestions for operation:
Generally speaking, the contradiction between supply and demand in polyolefin market is still prominent in the near future, with fewer overhaul units and high supply. With the production of Jiutai energy polyolefin plant, the domestic production is expected to increase. Influenced by the reduction of value added tax, Petrochemical stocks are converted into social stocks. Tax reform began on April 1, and the social supply is under pressure or constitutes the main empty idea (the pre-sale price of next month has appeared 100).- 150 yuan/ton falls back. However, crude oil is high, cost support is strong, the space below polyolefin is not strong, and the short-term futures have the possibility of repairing the base difference. It is expected that the short-term market will continue to maintain weak shocks, with L1905 pressure level 8800 and support level 8300; PP pressure level 8900 and support level 8400, which need to focus on recent inventory changes, post-plant maintenance and new production capacity. In the long run, polyolefin production in 2019 will continue to increase at a high rate, and the price focus will move downward. It should be noted that this Friday, polyolefin futures night market opened, whether the impact on the market remains to be seen.
| POLYVINYL ALCOHOL |