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Cost support collapses, export dividends dwindle
Cost support collapses, export dividends dwindleIn March, the polypropylene market was cold, and after 3 months of continuous rise, it began to peak and fall
.
"The fall in crude oil has caused the cost of polypropylene to collapse, coupled with the realization of new production capacity, and the supply and demand side has not improved significantly.
In this case, the market price has a high probability of peaking in stages
.
Loose cost support
Loose cost supportSince the end of March last year, international crude oil prices have risen sharply
.
Looking back at the past year, the price of WTI crude oil has soared from less than US$30/barrel to above US$60/barrel, more than doubling, thus pushing the cost focus of downstream chemical products to a substantial upward shift, becoming a unilateral rise in the polypropylene market.
The main and most direct motivation
.
However, Chen Zhixiang believes that considering the continuation of OPEC+ production cuts and the reality of tight global crude oil supply, international crude oil prices do not have the conditions for a deep decline in the short term
.
Export dividends dwindling
Export dividends dwindlingThe favorable export is also one of the factors that caused polypropylene to go out of the unilateral rise in the early stage
.
"Entering 2021, the export volume of polypropylene will increase significantly, mainly due to the opening of arbitrage space and the recovery of foreign demand
.
First of all, the extremely cold weather in North America after the Spring Festival caused a large number of plant shutdowns, and the Middle East ushered in a large area of plant maintenance in the later period, resulting in a tightening of supply in overseas regions and a surge in prices, which opened up export arbitrage for domestic polypropylene.
space
.
However, according to the statistics of Zhuochuang Information, the current polypropylene arbitrage space has been reduced, and the foreign market supply is expected to recover in the later period, and the export dividend is gradually weakening
.
Recently, it is reported that the polypropylene parking devices in the Middle East and North America will be gradually restarted in mid-April, and the export share of domestic polypropylene in the South American market is bound to shrink
.
The export volume is difficult to maintain the previous high level, and the overall export trade will gradually change from overseas centralized procurement to sporadic order procurement, which will have a negative impact on the polypropylene market outlook
.
New capacity realized
New capacity realized"Considering the unfavorable factors such as the continued increase in domestic production capacity and the low enthusiasm for receiving goods downstream, the fundamentals of the supply and demand of polypropylene in the follow-up will be weak
.
" Zhang Jian, the marketing director of a large refining and chemical enterprise in Liaoning, believes
.
2021 is still a year of substantial increase in polypropylene production capacity, including 600,000 tons/year of Formosa Plastics Ningbo, 800,000 tons/year of East China Energy Phase III, and 900,000 tons/year of Zhejiang Petrochemical Phase II.
It is expected that there will be 7 million units.
The new production capacity of about ton/year is gradually realized
.
It is understood that due to the relatively good profit situation in the industry, the current installations under construction are accelerating, and most installations are expected to be put into operation in the second quarter
.
After the production capacity is implemented, the new supply pressure will be concentrated in the second half of the year
.
Overseas production capacity is also expected to increase.
It is expected that by the end of 2021, the foreign polypropylene production capacity will increase by 5.
2%, which is 2.
1 percentage points higher than last year.
cannot be ignored
.
The demand side is also not optimistic
.
At present, the main downstream industries of polypropylene, such as plastic weaving and BOPP, are close to the same period of last year.
However, due to the gradual accumulation of cost pressure after the strengthening of the polypropylene market in the early stage, the profit margins of downstream factories have been squeezed.
Most of them adopt a stocking strategy of rigid procurement.
Not lukewarm
.
The loose supply and demand relationship is also reflected in the industry inventory
.
Zhuo Chuang Information analyst Ji Yu said: "At present, the inventory of major traders is maintained at around 900,000 tons, which is basically at a moderately low level.
However, the recent market transactions and circulation are mainly based on rigid demand, and the inventory in the intermediate links has accumulated.
, so the destocking rate of petrochemicals has slowed down
.
”
To sum up, the international crude oil prices have fallen sharply, the cost support is weak, the superimposed new production capacity is yet to be realized, the downstream demand is steadily declining, and the domestic polypropylene market may continue the current weakness
.
