Analysis and Prospect of Polypropylene Supply and Demand

1.

(1) Global supply and demand status

Northeast Asia is still the region with the largest PP production capacity in the world, with approximately 40 million tons, accounting for 47% of the world’s total.

(2) Domestic supply pattern

In the past 10 years, a large number of domestic methanol-to-propylene and PDH plants have been put into production, and the self-sufficiency rate has shown a trend of increasing year by year.

(3) Domestic demand pattern

In terms of demand, East China has the largest proportion, about 32%; followed by South China and North China, which account for 28% and 27% respectively; Southwest, Northeast, and Northwest regions have a relatively small proportion, with 7% and 4% respectively.

From the perspective of supply, because polypropylene supply routes are very abundant, the proportion of production capacity is relatively even.

(4) Analysis of supply and demand in various parts of the country

The northwest and northeast are the regions where domestic PP is transferred out.

　　2.
Future supply and demand changes

　　(1) Supply pattern

　　In the next five years, the development of new integrated enterprises will be the focus.
The production capacity in 2021 will be about 4.
18 million tons, and it is expected to be 8.
45 million tons by 2025, with an average annual growth rate of 20.
4%, followed by PDH, which is 5.
55 million tons according to this year's statistics.
, Is expected to reach 9.
75 million tons by 2025, with an annual growth rate of approximately 15.
1%.
On the whole, the development of these two areas is extremely rapid, and they will emerge in the field of polypropylene.
In addition, coal chemical industry and PetroChina followed closely with growth rates of 8.
2%.
While Sinopec and CNOOC are 5%, although Sinopec's growth rate is relatively slow, its volume still cannot be underestimated.

　　From the perspective of the future share, the production capacity distribution is relatively even, and the market diversification development trend is obvious.
Coal chemical industry has become the country’s largest production capacity, with a high probability of an increase of 23%.
Sinopec and PDH are basically the same, around 19-20%, and New One is 17%.
The proportion of CNPC in the polypropylene field further drops to 12%, and CNOOC’s 9%.
.

　　(2) Demand pattern

　　In the next 5 years, East China will still be the region with the largest domestic PP demand, but the proportion of East China and South China will show a slight downward trend, with East China falling from 33.
4% to 31.
9%, and South China from 26.
3% to 25.
2%.
The proportions of North China, Southwest, Northeast, and Northwest regions have increased.
The Southwest region may become the fastest growing region for polyolefins due to its regional, population, and geographical advantages.
The proportion will increase by 18% year-on-year (2021).

　　From the perspective of the proportion of each district, East China is 32%, North China is 29%, South China is 25%, Southwest is 7%, Northeast and Northwest are growing, but the overall proportions are relatively low, 5% and 2% respectively.

　　On the whole, the domestic polypropylene supply and demand pattern will develop greatly, especially the new integration, PDH, coal chemical industry and other development momentum are strong, domestic polyolefin diversified competition will intensify.

　　3.
Future market outlook

　　(1) Crude oil market: 60 OR 80 USD/barrel

　　In 2021, under the multiple positive boosts of OPEC+'s continued production cuts and expected economic recovery, international crude oil prices have risen sharply, especially after the Spring Festival, when prices rose to highs in the past two years.
However, as far as the current situation is concerned, it is unlikely that demand will return to the level before the epidemic during the year, and OPEC+ still has an idle capacity of more than 8 million barrels per day, which can completely suppress the sharp rise in oil prices.
US$65/barrel is a price acceptable to most oil-producing countries and oil-consuming countries.
Therefore, in the absence of emergencies, Brent oil may fluctuate in the range of $60-70/barrel.

　　(2) Domestic production capacity continued to increase

　　2021 is still a year of substantial increase in PP production capacity, with an estimated increase of 7.
24 million tons, including 600,000 tons of Formosa Plastics Ningbo, 800,000 tons of East China Energy Phase III, and 900,000 tons of Zhejiang Petrochemical Phase II.
It is understood that due to the relatively good upstream profit situation, the profit contraction in the later period is within the scope, all the devices under construction are in a hurry, and most of the devices will be put into production after April and May.
Overall, the new supply pressure in the second half of the year will be greater than that in the first half of the year.

　　(3) Overhaul of domestic equipment

　　，PP，60，100，，20-30。

　　(4)

　　2021，，，，600，140。

　　(5)

　　2021，PP()6099，5.
2%，20203.
1%。2020，202120%。

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