Logical point of view in the first half of the year:
Main contradictions: high costs have unlimited hope for rising prices, but they have encountered the dilemma of rising prices under weak demand. Cost pressure continues to exist, and polypropylene is more resilient in adversity under strong reality and weak expectations. The high cost is difficult to give the downstream too much profit, the procurement frequency of the downstream procurement cycle is obviously prolonged; The epidemic has had a significant impact, resulting in long delays and disruptions in logistics and transportation, shortage of transport capacity, slowing down of resource transfer, and obvious accumulation in the middle and upstream links. Domestic prices are in a global depression, import Windows are closed, orders from downstream enterprises are flowing out under the impact of the epidemic, and raw material exports are increasing simultaneously. The net increment of PP is significantly higher than that of PE, and the domestic demand is weak, leading to the long-term empty mentality of merchants. Polypropylene is more resilient in adversity, and sticking to and exploring against the trend of expansion has become a stage theme
In the first half of 2022, polypropylene market showed a trend of decline after rising, with an average price of 8684 yuan/ton, the highest quarterly price of 9600 yuan/ton, and the lowest quarterly price of 8350 yuan/ton .The market fluctuated greatly in the first quarter. In February and March, it was in the contradiction between the strong support of the cost end and the high inventory of the midstream industry for a long time. The blitz war between Russia and Ukraine was on the verge of breaking out, and crude oil was pushed to the highest point since 2014, and polypropylene hit a quarterly peak of 9600 yuan/ton The continuous strengthening of the cost end is bound to drive the spot price higher, but the imbalance between supply and demand in the polypropylene link is obvious, the spot end does not rise but falls, leading to periodic losses in production profits, and more and more enterprises choose to reduce negative or stop production under operating pressure Ukraine war switch in the tension and relaxation, bring crude oil is larger uncertainty, market mentality to follow adjustment, oil prices become a crucial turning point signal In the second quarter, 4-5 months, polypropylene remain range-bound most of the time, high oil prices below the cost of support is relatively strong, giving the spot price palm support, no deep down prices But weak demand and middle high inventory is still the important factor of price rise, unlock outbreak area did not bring effective demand recovery, market forecast for libraries to drive the futures price upward breakthrough expectations, the depths of the downstream demand off-season, no drive up, under the background of no obvious repair weak demand, spot prices remain at 8600 a line wide adjustment After the Dragon Boat Festival, by the steady growth of consumption economy meeting, the disk appeared days of relatively large rise, a certain degree of support spot spot trend firm, demand is expected to turn better did not land, spot feedback weak demand in the upstream inventory has obvious accumulation Under the background of increasingly severe global inflation, increasing overseas interest rate hikes and grim economic growth prospects, capital risk preference has been reduced, which has a negative impact on global commodity prices and depressed PP market confidence. Meanwhile, the fundamentals have obviously weakened, dragging down prices The macro sentiment is negative, and the superposition itself is relatively limited in demand driving, which makes polypropylene continue to bear pressure in this quarter.
In the overall weak commodity market sentiment, the price of polypropylene remains at 8400-8800 yuan/ton in the second half of the year: After the downstream replenishment of the PP market in the second quarter, the short-term pressure of petrochemical inventory is not large, and it is difficult to form a great pressure on the PP market in the future. However, in July, domestic petrochemical demand is weak, there is still a downward forecast From the perspective of supply, the number of maintenance units decreased and the concentration degree weakened, and the supply side gradually returned to the normal level. In South China, 1.2 million tons/year of Zhongjing Petrochemical plant was added, North China Tianjin Bohua Comforkang was officially put into operation, and the failure maintenance period of Maoming Petrochemical Shanghai petrochemical plant was extended, and the overall supply side was relaxed In terms of demand, in July, the downstream demand was at the end of the off-season and before the start of the peak demand season, the inventory pressure of the factory’s terminal products was large, and the factory maintained a cautious attitude towards the purchase of raw materials.
Although the supply pressure increased due to the decrease of overhaul in the market in the third quarter, it gradually shifted to the peak demand season, and the trading atmosphere of market personnel turned from idle to more The traditional consumption season will open in late August, market participants PP market expectations for the future mainly with optimism Is about to enter the traditional golden nine silver ten busy season, the downstream exploratory stock up to a certain extent, as the epidemic situation improves, up to a certain power demand expected to breakthrough pressure, before breakthrough shock trend does not change, the medium term, limited gains
Post time: Jun-30-2022