High inventory makes it difficult to improve the future market pattern of polypropylene

Last week, the rapid development of the futures market gave petrochemical manufacturers a certain cost support. New maintenance devices have also been opened one after another, which has a certain mitigation effect on supply. In inventory, after a rise in the market, inventory has been effectively digested, and merchants actively shipped, but terminal demand has not improved, or market growth is difficult to have greater expectations.


I. Several Reasons Causing Poor Transaction in Spot Market

1. Supply exceeds demand, and new products are put into the market one after another, which intensifies the rising process of stock backlog in the market.

2. It is difficult for downstream orders to break expectations and market supply to be digested effectively, which aggravates market bullishness.

3. At present, the stock of “two barrels of oil” is still at a high level, and the pressure of market sales is not decreasing.

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4. There are not many overhaul devices, and the phenomenon of low-price goods rejection is frequent in the market, mostly low-level transactions.

II. Frequent Inventory Pressure

The high stock of “two barrels of oil” causes the pressure of price reduction of production enterprises to increase gradually. At present, the only way to alleviate the pressure of market inventory is to increase the order quantity of downstream enterprises, or to reduce the production load of manufacturers, or to advance to the maintenance stage, so as to alleviate the pressure of market supply and demand.

3. Prospects for the Future Market of Polypropylene

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At present, the cost support of polypropylene has increased due to the increase of most of the previous price of oil and gas, but the follow-up of spot delivery is insufficient. Considering that the price rebound of polypropylene is greatly affected by the macro-level, and the supply and demand side is limited, at the same time, the import window of polypropylene is close to open, the price gap between drawing and copolymerization is gradually close, and there are still plans to put into operation for giant positive sources and other devices in the future. It is expected that the price of PP market will increase slightly in the near future. The main stream of wire drawing is 8500-8700 yuan/ton, and the main stream of copolymerization is 8800-9000 yuan/ton.