In the past month, the overall domestic general plastics showed a continuous downward trend, and the market could not escape the traditional off-season vortex. According to the data monitoring of the business society, the general plastics index was 942 points on June 17 and 989 points on May 17, down 47 points in recent months, down 15.44% from the highest point 1114 points (December 12, 2013) in the cycle, and up 44.26% from the lowest point 653 points on April 6, 2020（ Note: period refers to the period from December 1, 2011 to now). LDPE, EPS, LLDPE and PP in the spot market fell by more than 5%, and other general plastic products also fell to varying degrees.
Plastic market is dominated by bad factors, five general plastic products appear collective decline market. The off-season factor is one of the main reasons. Because the five general plastic products are in the traditional off-season, the demand of end users is shrinking, the operating rate of downstream factories is low, and the shipping resistance of enterprises and businesses is increasing. On the supply side, there are not many enterprises engaged in the maintenance of plastic products, the market supply has increased, and the contradiction between supply and demand is obvious. The second is the raw material market. Although the international crude oil fluctuated and went up in recent January, the upstream commodities such as propylene, ethylene and styrene were in a downward trend due to the bad effect of insufficient gas purchase in the spot market and weak trading atmosphere, and the support of market shaping cost was weakened. Finally, the futures market, PE, PP and PVC futures markets have been significantly weakened recently, affecting the mentality of the spot market. At present, the superposition of negative factors leads to the downward shift of the five major products. Let’s take a look at the recent market of five general plastic products
The contradiction between supply and demand is obvious, the PE market continues to be weak, and the whole market is downward
In June, the overall trend of PE continued to be weak, and the spot three varieties all fell to varying degrees. Among them, LLDPE and LDPE fell more obviously, LLDPE has dropped to below 8000 yuan / ton, HDPE has remained stable on the whole, and some of them have gone down. The overall trading atmosphere of the market is weak. 9 PE spot market, petrochemical enterprises collectively cut the ex factory price, drag down the market trading atmosphere. LLDPE and LDPE dropped significantly, while HDPE market dropped partially. Even plastic futures market shocks fell, to the spot market to bring limited positive. On the supply side, new production capacity was put into production one after another. In terms of demand, it is currently in the off-season of traditional production of agricultural film, the operating rate of downstream enterprises is low, the pipe and packaging film are also in the off-season, the performance of rigid demand is weak, the receiving intention is not high, multi-dimensional hold on demand replenishment, and the market transaction atmosphere is difficult to improve significantly. The attitude of the merchants is empty, and they mainly follow the offer of profit, and focus on a single discussion on the firm offer.
Business community PE analysts believe that although the current inventory of the two oil has declined, even plastic futures market has stopped falling and rising, which has brought short-term support to the market. However, the new production capacity has been put into production one after another, and the downstream agricultural film, pipe and packaging film are in the traditional off-season. The relatively weak demand still brings obvious constraints to the market. The market weakness is difficult to change in the short term. It is expected that the PE spot market will continue to weaken in the short term.
Demand side low PP continued weak market in early June
In the first ten days of June, the PP market fluctuated downward, and the spot prices of various brands decreased. As of June 10, the mainstream offer price of T30S (wire drawing) by domestic manufacturers and traders was around 8300.00 yuan / ton, a decrease of 4.41% compared with the average price at the beginning of the month, and a rise of 6.87% compared with the same period last year. Last month, the average operating rate of the industry rebounded, coupled with the off-season of traditional demand, the consumption of terminal enterprises declined. In the first ten days of this month, the domestic market continued the previous pattern. Although power rationing affected production in some regions, the overall supply pressure did not improve. This year’s new production line production involves more production capacity, and the medium and long-term expansion of production capacity is a blow to market confidence. In addition, the recent decline of RMB exchange rate has formed a certain resistance to polypropylene export, aggravating the contradiction between domestic supply and demand. The lower reaches are still resistant to high price goods, and the momentum of off-season trading is insufficient. The market is generally short, and petrochemical plants generally reduce the ex factory price.
Business community PP analysts believe that in early June, the domestic polypropylene market was volatile and fell. The current market is still in the traditional off-season demand, low consumption. The end users have strong resistance to the high price of goods, the goods preparation is rigid, and they need to operate carefully, and the actual trading volume is small. In the year of rapid growth of PP production capacity, the medium and long-term supply side bad news is gradually released, and multiple factors amplify the contradiction between supply and demand in the industry. Crude oil and propylene in the upstream of the industrial chain are stronger and better expected. The current market support mainly comes from the upstream. It is expected that PP price will remain weak in the near future.
Entering the off-season, PVC market price gradually declines
After the Dragon Boat Festival, the PVC market continued to weaken. On the 17th, the futures price fell by more than 2%, driving the spot price trend. The enterprises reduced the price by about 50-100 yuan / ton within the day, and the quotations were mostly in the range of 9150-9250 yuan / ton. The prices of various places were reduced by different ranges, and the overall focus moved down slightly, but the price was still on the high side. Recently, the price of raw calcium carbide has risen by 12% in June, and the cost support is gradually strong, so it is difficult for PVC to fall sharply. However, as the downstream enters the off-season, and the export volume shrinks, the demand side is expected to weaken. In addition, there are not many PVC plant maintenance enterprises in June, and the supply is gradually increasing, so the support is weakened. At present, most of the operators are in a wait-and-see situation. The lower reaches continue to maintain the purchase of just needed goods, and the goods holders give up the profits to deliver goods. There is a certain space for negotiation. In the short term, the PVC market is relatively sticky, the price fluctuates mainly in a narrow range, and the future market is facing a downward trend.
Business community PVC analysts believe that after the festival, PVC market continued to weaken, supported by the cost side, PVC deep drop will not be strong. With the downstream entering the off-season, the demand side is expected to weaken, and it is expected that the PVC market will fluctuate in the short term, and the price may continue to decline.
Terminal demand shrinks, ABS off-season market continues
In early June, the price of ABS cost side was mixed, and the overall support for ABS cost side was general. Of course, the production equipment maintenance plan and start-up and return to work are intertwined, which has limited impact on the supply side. In the off-season of traditional consumption, the demand shortage of ABS is difficult to open, and the overall trading atmosphere of the market is lower. Downstream enterprises follow up the downsizing, and tend to buy up but not down. The market as a whole is short and the offer is weak.
Business community ABS analysts believe that the ABS spot market in early June was weak and volatile, and the spot price was generally down. The trend of raw materials is mixed, and the support of ABS cost side is general. At present, it is the off-season of ABS industry, the demand of end users is shrinking, and the shipping resistance of enterprises and businesses is increasing. It is expected that the ABS spot market may continue to be short in the near future.
Lower PS price in upstream
According to the monitoring data of the business community, the average price of PS (GPPS 525) was 10600 yuan / ton on June 14, and 10533 yuan / ton on June 18. During this period, the price dropped by 0.63%, up 30.04% compared with the same period last year. Domestic PS market through benzene high consolidation, benzene soft mainly, the range of 50-300 yuan / ton. PS factory price down, as well as the impact of power rationing in South China, businesses are more willing to reduce prices and ship. The queuing time of ordinary benzene delivery is about one week, and the pressure of benzene delivery is slightly higher. The terminal just needs to purchase, the raw material styrene rebounded at the beginning of the week, the merchants exchanged the price for the quantity, and the low delivery situation improved.
Business community PS analysts believe that the overall impact of the current PS start to improve, the market is expected to increase supply significantly, it is expected that the PS market next week or narrow consolidation, part of the rise.
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