Polyethylene market outlook and strategy report

1.

The domestic polyethylene market price has fluctuated within a range this month.

The beginning of the month coincided with China's National Day holiday, demand slowed down, and Asian external disk prices were mainly stable.

2.

Supply: As of October 30, the total output of domestic polyethylene companies was 1,767,300 tons, an increase of 0.

Downstream demand: The overall operating rate of agricultural film this month is 45.

Inventory status: This month, the total PE inventory of the two oils rose first and then fell.

Related products: As of October 30, the oil-based linear cost was 4657 yuan/ton, a decrease of 299 yuan/ton from the previous month, and the oil-based linear profit was 2893 yuan/ton.

　　Upstream and downstream related products: International oil prices this month showed a downward trend as a whole.
The epidemic situation in Europe and the United States continues to worsen, and France and Germany once again announced the implementation of national lockdown measures to increase market concerns about the demand outlook.
As of the close of October 29, WTI ranged from 36.
17-41.
46 US dollars/barrel, Brent was 37.
65-43.
34 US dollars/barrel.
WTI is expected to operate in the 35-43 US dollars/barrel range, and Brent may be at 37-45 US dollars/barrel.
The range of barrels still supports the price of polyethylene.

　　After the return of the National Day, most upstream factories are at a low-to-medium inventory level, and downstream purchases and replenishment are mainly based on demand.
The extension of the second phase of the test run will support the market.
Some market participants are cautious and happy to watch the market in the fourth quarter.
It is expected that the overall average market price in November may be better than that in October, which will support the price of polyethylene.

　　The overall start of domestic polyethylene downstream in October showed an upward trend.
According to Longzhong's statistics, the average domestic PE downstream operating rate in October was 64.
0%, an increase of 2.
9 percentage points from the previous month.
Among them, the average monthly operation of the agricultural film industry was 45.
8%, an increase of 6.
8% from the previous month; the average monthly operation of pipes was 51.
8%, an increase of 1.
0% from the previous month; the average monthly operation of the packaging film was 73.
1%, an increase of 2.
8% from the previous month; Hollow The average monthly start-up was 60.
5%, an increase of 1.
9 percentage points from the previous month; the average monthly start-up for injection molding was 81.
3%, the same as the previous month.

　　As of October 29, the price of L’s main contract fell month-on-month, the closing price of the futures price was 7,185 yuan/ton, the trading volume was 326,200 hands, and the position was 257,100 hands; the basis was 365 yuan/ton, +75 yuan/ton; the 1-5 spread was 40 yuan.
/Ton.
At present, crude oil prices continue to drop, upstream companies' inventory ring has fallen sharply, intermediate traders' inventories are comparable year-on-year, and downstream demand support is relatively limited.
In terms of operation, it is recommended that operators sell short rallies and pay attention to the opportunities for high pressure and linear spread narrowing in the medium and long term.

　　Three, market outlook

　　In November, Sino-Korea Petrochemical’s 300,000-ton LLDPE plant and 300,000-ton HDPE plant continued to be overhauled.
Lanzhou Petrochemical’s new 300,000-ton full-density plant continued to shut down.
It is estimated that the petrochemical plant’s overhaul in November will affect about 80,000 tons, a decrease of 42.
86 from October %.
At the same time, Wanhua, Zhongke and Haiguolong oil plant plan to put into production, and the domestic PE production in November is expected to be 1.
85 million tons, an increase of 1.
3% from October.
In terms of demand, the peak season of agricultural film will weaken marginally in November.
The operating rate of medium and large enterprises is expected to be 60-70%.
The overall operating rate of the agricultural film industry in November is expected to be around 42%, and the demand for raw materials will continue to increase.
In addition, driven by double 11 e-commerce promotions, the demand for packaging film industry related to express delivery is expected to continue to increase.
At the level of trend trading, the current downstream companies’ stocking is still mainly based on rigid demand, but most of them are taking advantage of the downward price movement.
With the new equipment being put into operation from October to November, the supply pressure is expected to increase, but the demand for agricultural film and packaging film Driven by this, the supply pressure can be relieved to a certain extent.
Although the price range of plastic futures fluctuates mainly at present, it is expected to remain stable at RMB 7,150-7250/ton.

　　On the whole, the biggest contradiction on the supply side of the market in November was the launch of new equipment (Wanhua, Shaanxi Yanchang China Coal and Haiguolong Oil).
As new equipment products require a certain period of time to be put on the market, the amount of superimposed imports decreased month-on-month.
, It is expected that the total output in November will not increase significantly.
However, from the demand side, the demand for downstream agricultural film and packaging film in November is expected to be acceptable, and the absolute value of PE price is relatively low, and there is no obvious psychological resistance in the downstream.
Looking at the follow-up, the room for further decline in polyethylene prices is also relatively limited.
For the time being, the support level of 7,250 yuan/ton will not rule out the possibility of a continued rebound.
Strategic recommendations: L2101 contract to do more on bargaining points, long positions within the range of 7250-7350; target price: 7700-7800 points; stop loss range: 6800-6900 points.

Transfer from: Hexun.
com