Downstream demand has weakened

News: On May 17, CSPC Huizhou Phase III ethylene project held a signing ceremony
.
CSPC Huizhou Phase III ethylene project is based on the first phase of 1 million tons / year ethylene and the second phase of 1.
2 million tons / year ethylene, the scale of 1.
5 million tons / year of ethylene, with a total investment of about 5.
6 billion US dollars (equivalent to more than 39 billion yuan), and an estimated annual output value of about 38.
2 billion yuan.

The project is located in Daya Bay Petrochemical Zone, Huizhou, and is scheduled to start construction
in 2021.

Shenhua Coal Chemical Industry Shenhua Baotou linear intraday bidding volume was 565 tons, the previous day's auction volume was 675 tons, the intraday trading volume was 415 tons, and the previous day's trading volume was 560 tons
.
Shenhua low-pressure intraday bidding volume was 939 tons, the previous day's auction volume was 721 tons, the intraday trading volume was 739 tons, and the previous day's trading volume was 436 tons
.
Yulin High Pressure intraday auction volume was 41 tons, the previous day's auction volume was 41 tons within 46 days, and the previous day's trading volume was 33 tons
.
Xinjiang high-pressure intraday bidding volume is 50 tons, the previous day's bidding volume is 50 tons, the intraday trading volume is 50 tons, and the previous day's trading volume is 50 tons

Spot market: Most of the domestic polyethylene market has risen
.
The opening price of the main regional sales was partially increased by 50-250 yuan / ton, and most of the market offers followed up, the current market high price transaction resistance is large, the source of low-price goods is difficult to find, the downstream wait-and-see is the mainstay, the real transaction is general
.
As of the midday close, the North China/East China market rose 50-200 yuan / ton; High pressure in South China market Due to insufficient market supply, high pressure rose by 500-550 yuan / ton, and low pressure and linear rose by 100-150 yuan / ton
.

Warehouse receipt inventory: exchange warehouse receipts reported 943 lots, +81 lots
intraday.
Main position: the top 20 long positions in the main contract are 248289 lots, -2039 lots, short positions are 281781 lots, +1120 lots, net positions are -33492 lots, net short increases
.

Summary: The overseas epidemic seems to be showing signs of easing, vaccine research has also been positive, which has boosted market confidence, and the voluntary reduction of production by major oil-producing countries has also supported
the market 。 On the industrial chain, linear downstream demand has weakened, agricultural film demand is basically over, shed mold demand has not yet begun, packaging film demand is basically stable, showing that downstream demand recovery is still insufficient, and the current import profit is still at a high level, it is expected that the import source will be concentrated in May to the port, these factors will suppress the price, but LNG prices, crude oil, ethylene prices have rebounded significantly, improving the linear cost support, and after entering May, the maintenance of the equipment has increased, the operating rate of PE production enterprises has declined, and the output has decreased.
This has led to a slight decline in social inventory, and some factors will form some support
for Liansu.
Operationally, investors can hold long positions with caution
.