The price center of polyolefin market still has room for downside in the fourth quarter

In the fourth quarter, the new domestic polyolefin production capacity released pressure, and the supply side faced a large increase in expectations, while the external market also ushered in the peak of capacity expansion, olefin prices continued to be under pressure, and the import pressure continued to increase, especially in the PE mark.

Therefore, under the background of loose supply and weak macroeconomic situation of polyolefins in the fourth quarter, the market price center still has room for downsi.

Domestic supply increased in the fourth quarter

In 2019, domestic PE plans to put into operation 6 sets of units, involving a production capacity of 38 million tons/ye.

In 2019, 8 sets of domestic PP units are planned to be put into operation, involving a production capacity of 47 million tons/ye.

This year is a small year for petrochemical maintenance, especially PE varieties, and the low maintenance rate has also led to a substantial increase in producti.

With the help of plant maintenance windows and increasing sales efforts, the current petrochemical olefin inventory has dropped to a low level this year, and the low inventory supports short-term market pric.

Import window opens again

2019 is also a big year for polyolefin production abro.

Customs data shows that from January to July, the cumulative import of PE was 523 million tons, a year-on-year increase of 12%, and the cumulative import of LLDPE was 031 million tons, a year-on-year increase of 2

Customs data show that from January to July, the cumulative import of PP was 844 million tons, a year-on-year increase of 4% (-3% last yea.

Downstream demand is expected to weaken

Data show that from January to August, the cumulative output of plastic products was 6669 million tons, an increase of 1% year-on-year, and the cumulative export was 258 million tons, an increase of 10% year-on-ye.

As far as PE is concerned, the downstream agricultural film has entered the peak production season, and the operating rate has steadily increas.

In terms of PP, the downstream injection molding load is relatively high, and the start of plastic weaving and BOPP is in the normal ran.

From the terminal point of view, the demand for PP modification is concentrated in the automobile, home appliances and other industri.

        Although the decline in automobile production has narrowed in the second half of the year, the negative growth trend is still difficult to chan.

        The industry's gross profit is at a high level

        The listed company report shows that in the first half of the year, the unit production costs of Shenhua Baotou polyethylene and polypropylene were 5,164 yuan and 5,076 yuan, respective.

        In horizontal comparison, polyolefins are still very profitable among all chemica.

        Operation strategy: Polypropylene can establish an empty order step by step near 8200, the target point is near 7700-7900, and the stop loss point is set according to the opening pri.

Risk warning: delayed plant production, Saudi Arabia incident, macro policy impact that exceeds expectatio.