According to the data monitored by the business community, the domestic PP market fell in December, and the spot prices of various brands had a certain downward trend. As of January 1, 2021, the mainstream offer price of T30S (wire drawing) of domestic manufacturers and traders is about 8150 yuan / ton, a decrease of 10.11% compared with the average price level in early December.
Cause analysis
In terms of PP upstream propylene, according to the data of the business community’s block list, the domestic propylene (Shandong) market price rose slightly in December and then fell rapidly. At the beginning of the month, the price was 7712 yuan / ton, at the end of the month, the price was 7209 yuan / ton, with a monthly decrease of 6.52%, and the amplitude reached 11.99%. At present, there are many problems in the manufacturers, such as the accumulation of warehouse, the deviation of operation, and the increase of low price supply. The downstream market is more empty than more, and the overall situation is slightly depressed, mainly for the purchase of rigid demand. Therefore, it is expected that the propylene price may continue to decline in the near future.
The current propylene market fell, PP cost side support weakened. According to the data monitored by the business association, the PP (wire drawing) market gradually fell in December, and some brands were not reduced by a small margin. Early November PP inventory low, futures rose sharply, into December PP has been high. Taking plastic weaving enterprises as the representative, the downstream cost pressure increases, the profit space is compressed, and the resistance is generally intensified. In addition, the PP peak season has come to an end, the demand continues to be weak, and the enthusiasm for receiving goods is low. At the end of the month, the production dealers increased the profit margin and actively completed the task. Petrochemical inventory reduction will be obvious.
According to the data monitored by the business community, as of January 1, the mainstream offer of Z30S (fiber) by domestic producers and traders had fallen slightly compared with the beginning of this month, with the price of about 8316.67 yuan / ton, 8.27% lower than the average price level in early December. In November, domestic restorative consumption growth supported the price of fiber materials, and in early December, the price of fiber PP was also at a high level. At present, the decline rate of domestic total inventory has slowed down and rebounded. In addition, the operation rate of PP plant was increased, the number of overhauled plants was reduced, and new plants were put into operation, which increased the supply pressure. The recent PP futures shock down operation, bad spot market. In addition, as the holiday approaches, the demand for fiber PP will further shrink in the short term, and the price of PP (fiber) may still have room for decline.
In December, PP meltblown material market is relatively flat, and the price tends to be stable. As of new year’s Day 1, the average quotation of pph-y1500 sample enterprises monitored by business community was 10850 yuan / ton. Recently, a small-scale rebound occurred in some areas of the epidemic situation in China, but the overall situation was stable, and there was no large-scale rise in the demand for anti epidemic materials such as masks. There is a surplus of suppliers in the melt blown cloth manufacturing market, and the price of some melt blown cloth manufacturers is close to 15000 yuan / ton, resulting in serious profit dilution. Overseas epidemic outbreak trend is obvious, many countries once again announced the implementation of strict closure of the city. There is still a certain demand for international medical protection products, and the price of imported materials is also stable. The business association thinks that the domestic melt blown PP price has entered the platform period, and it is expected that the overall trend of melt blown PP market will be stable.
Future forecast
Business community PP analysts believe: December domestic PP spot market to fall mainly. Upstream propylene market fell in mid month, weakening support for PP cost side. At present, PP drawing material and fiber material market is in a downward trend, PP (melt blown) price tends to be stable. Due to the lifting of the new year’s environmental production restriction policy, the downstream replenishment is expected to rise, but the strength may be limited. However, in the long run, PP production capacity and supply have increased, the overall incremental trend remains unchanged, and supply side pressure increases. As the current time approaches the Spring Festival, business associations believe that the demand side may continue to tighten, and PP prices may still have room for downward trend.
| PVA |