Propylene market rebound is difficult to sustain

In April, the propylene market was abnormal and prices began to rise. Taking April 2 as an example, enterprises in Shandong, Liaoning and Heilongjiang provinces have raised propylene prices by about 100 yuan per ton. At present, the mainstream transaction price in Shandong market is 6900-7000 yuan/ton. Industry insiders believe that propylene supply is expected to decline, and the short-term market is expected to still have room for growth, but under the constraints of limited demand growth, market growth is limited and the rebound is difficult to sustain.

Expected decrease in supply

Azodicarbonamide (AC foaming Agent)

Lee, general manager of Lubon Industry Co., Ltd., said that in March, the domestic propylene market price declined due to factors such as increased supply and reduced downstream demand. The average price of Shandong mainstream dropped 522 yuan/ton, or 6.89% compared with February. In April, driven by downstream demand, on-site trading and buying gas significantly warmed up, and the propylene market stopped falling and stabilized. For the future market, industry insiders believe that with the centralized arrival of local refining and overhaul period, supply expectations are reduced, which forms a support for the propylene market.

It is understood that Qiwangda, Changyi Petrochemical, Qingdao Anbang, Huifeng Petrochemical, China Overseas Energy, Ningbo Haiyue, Dongchen Petrochemical and other propylene plants continue to stop for maintenance, Huaxing Petrochemical, Yongxin Petrochemical, Lijin Petrochemical inventory and maintenance plan. Yantai Wanhua 750,000 tons/year PDH plant has been stopped for overhaul on April 1. It is expected that the downstream production facilities will be in normal operation for about 20 days. In addition, in April, the overhaul of cracking units in Korea, Japan and other countries will increase. Overall, the expected reduction in propylene supply, the internal and external disk is expected to form a benign interaction.

However, restarting the plant or suppressing the propylene market. It is understood that the 600,000-ton/year PDH plant in Haiyue of Ningbo was restarted on March 31, and propylene plants such as Qiwanda, Haiyue of Ningbo and Dongfang Hualong are scheduled to resume production in early April, while propylene plants such as Dongming PetroChina, China Overseas Energy and Huifeng Petrochemical Company are scheduled to resume production in mid-April.

“Overall, the supply side of propylene market is still shrinking. In the short term, the market will be more dynamic or will dominate the market. Wang Chunming said.

Cost may be stronger

The upstream crude oil market of propylene is likely to rise, which will support the propylene market.

Meng Ying, an analyst at Jin Lianchuang, said that the threat of output expansion in the United States has weakened and oil drilling will continue to be inactive, which means that crude oil production will be relatively stable, the rapid digestion of refined oil stocks will continue to reduce crude oil stocks, and the price gap between light crude oil and Brent crude oil will further narrow.

Industry insiders believe that OPEC’s repeated attitudes towards production reduction will cause fluctuations in crude oil prices, but low oil prices will seriously harm the interests of oil-producing countries, so OPEC in the actual implementation of production reduction process, will frequently launch good oil price news.

In addition, U.S. sanctions against Iran and Venezuela are still under way, and tightening the sanctions will stimulate a rebound in oil prices. Therefore, the international crude oil market is expected to remain volatile in April, but it does not rule out the possibility of further upsurge or provide good support for the propylene market.

Demand is still constrained


Although the supply side and cost side are strongly supported by the propylene market, the downstream demand is difficult to recover, which dooms the propylene market rebound to be unsustainable.

PP powder market, affected by the “3.21″ accident in Xiangshui, Jiangsu Province, started a large-scale safety production inspection nationwide or again, the downstream powder industry of propylene has increased maintenance efforts, the market supply has decreased expectations, raw material procurement or subsequently declined.

“The downstream propylene oxide industry is currently operating at 78.45%, and the demand for propylene is stable. In the future, the domestic propylene oxide market will continue to maintain an interval fluctuation trend. Value-added tax reform will be implemented on April 1. The overall demand side is weaker than expected in March, which is difficult to drive the propylene market. Zhang Xu, General Manager of Jilin Ruiyang Chemical Trade Co., Ltd.

At present, the overall start-up load of downstream butyl octanol is 88%. Among them, although Tianjin Bohua butyl octanol plant resumed production at the end of March, in early April, Blue Sail Chemical butyl octanol plant and Qilu Petrochemical PP granular plant inventory maintenance plan, and there will be enterprise maintenance after the Qingming Dynasty, resulting in butyl octanol consumption of propylene will be reduced, the lifting role of raw materials will be further weakened, restricting the continuous improvement of propylene market.