It is expected that polyolefin prices in May will still be dominated by weak fluctuations-Metallurgy / Chemicals / Rubber & Plastics-Hmeonline: Leading B2B Source & Platform Since 2005

The maintenance volume reached its peak in April. In May, due to the restart of the device and the new production capacity, although imports were still small, the pressure on the supply side gradually manifested. Downstream demand is subject to new orders, and just need to receive goods mainly. Demand is expected to gradually weaken, especially the seasonal low demand for PE agricultural film. With the withdrawal of speculative demand, downstream demand will hardly pick up. It is expected that the price of polyolefins in May will still fluctuate weakly. However, the early end of the agricultural film, and the seasonal weakening, the downstream demand is weaker than PP. Relative PP weakens in the short term. Strategy 91 reverses the opportunity to enter the market, unilaterally recommends polyolefin short rallies.

Centralized production of polyolefins, 2009 contract supply under pressure

The production capacity of polyolefins began to be released in the second quarter. Among them, the pressure of PP production is relatively high. The new PP production device Haiguolong Oil, Dongming Petrochemical has already produced products. Sino-Korea petrochemical plants are in production, and Hongji Petrochemical still has Ningbo Fuji to be put into operation in May, with a total of 2.55 million tons in the first half of the year. The 09 contract is to receive 2.1 million tons of new capacity. Compared with 05 contract capacity growth rate reached 7.2%. 05 contract capacity growth rate is about 4%.

A total of 6.1 million tons of PE production capacity has been put into operation, and 1.8 million tons of production capacity is planned to be put into operation in the first half of the year. Daqing Lianyi has already produced products. Tianjin Petrochemical has already started production. In the 05 contract, only one set of equipment in Daqing was put into production and stable operation, with a production growth rate of 1.75%. In the 09 contract, there were 1.95 million tons of installations in Huatai Shengfu, Satellite Petrochemical, Sino-Korea Petrochemical, and Luqing Petrochemical. 09 contract capacity growth rate was 8.4%, of which LL put into production only full-density devices with a total capacity of 800,000 tons. HD production capacity is concentrated and the pressure is high.

According to estimates, in March 2021, the maintenance equipment of domestic PE petrochemical enterprises increased compared with that in February. The annual production capacity involved in maintenance was 4.43 million tons, and the amount of maintenance losses was 72,800 tons. The total amount increased by 24,900 tons compared with February. The loss was revised to 47,900 tons. In March, Shenyang Chemical was overhauled for the whole month. Maoming Petrochemical and Yanshan Petrochemical also entered the overhaul within the month. The maintenance time of the remaining devices was relatively short, and the maintenance loss during the month was at a moderately low level, which had little impact on domestic supply. In April, more than 2 million tons of new production capacity was involved in maintenance, and the loss of PE maintenance was about 201,000 tons, of which 35,600 tons were linear losses, 58,500 tons were high-pressure losses, and 106,000 tons were low-pressure losses. The total was an increase of 127,300 tons compared with March. In May, about 2.5 million tons of maintenance were added, and some of the maintenance devices were restarted in March. The loss was reduced compared with April, and the total amount was about 100,000 tons (because the maintenance time of Pucheng and Baofeng has not been determined, the amount of maintenance has not been included temporarily) .

The production loss of the polypropylene plant in March was about 168,000 tons, an increase of 68,700 tons from the 99,300 tons in February, which was an increase of about 69.15% from the previous month. The loss of PP overhaul in April was about 203,600 tons, an increase of 21.19% from the 168,800 tons in March. In April, the maintenance of Jiujiang Petrochemical, Yanshan Petrochemical, Fushun Petrochemical, Shanghai Petrochemical and other equipment was added. In addition, most of the maintenance equipment continued to be overhauled in March, and the overall maintenance volume increased in April. In May, there were few devices involved in the overhaul. About 1 million tons of capacity devices were newly added for overhaul, and about 120,000 tons were lost, of which 40,000 tons were lost due to annual shutdowns.

In general, there was a small peak for maintenance in April. In May, due to the number of restarted devices and the reduction of maintenance devices involved, the amount of maintenance losses decreased month-on-month. And the planned amount of PE overhaul is slightly more than that of PP.

There is still a significant decrease in imports from April to May

my country's polyethylene import dependence accounted for more than 45%. PE is mainly imported from Iran, Saudi Arabia and Qatar. PP import dependence is relatively low, accounting for about 18%. PP imports are mainly from the Middle East and North Asia, and the top three sources of imports are South Korea, Saudi Arabia, and Singapore.

Years later, the tight supply of external disks pushed up the price of polyolefins, and imports were upside down. Shipment dates are mainly concentrated in March and April. The source countries are mainly Saudi Arabia, Qatar and other regions. The shipping period is about 26-30 days. Therefore, the arrival time of this batch of imported materials is expected to be from late April to early May. According to the data disclosed by the customs, imports of polyolefins in March exceeded expectations. Not only did they not decrease, they were more than imports in January and the same period last year. Similarly, the export of PP fell short of expectations, and the strong growth rate under the previous capital speculation was not as expected. According to market rumors, the higher-than-expected imports in March were due to the fact that the source of imports in February was concentrated in the arrival of the port in March, which can be verified laterally from the high port inventory.

After February, the supply of polyolefins on the external disk is in short supply, and the import profits have fallen sharply. The strong price of the external disk has led to an increase in the willingness of the sources of goods from the Middle East and other regions to export to Europe and the United States. It is expected that imports from April to May will remain low. The supply at the import end has shrunk significantly.

Weakening demand

The price of raw materials has risen, and downstream demand has been suppressed. The original demand is relatively weak. Agricultural film coincides with the seasonal decline. According to Longzhong Information Research and Statistics, the start of mulch film was higher than in previous years, and the current rate of mulch film has dropped significantly. The overall start of mulch film in January-March is not much different. Since the start of mulch film in late April was not as good as in previous years, the overall start of mulch film in 2021 was worse than in previous years. The downstream performance of PE was weak, the demand for PE functional film remained weak, the follow-up order was not smooth, and the start of the factory remained low. The demand season for EVA solar film and PO film is over. The demand for mulch film has weakened compared with previous years, and the follow-up orders of manufacturers have been slow to follow up, and the start of production by manufacturers has fallen faster than in the previous period. The production of mulch film came to an end ahead of schedule, and the operating rate of mulch film was halved compared with the start of 2020, and it was down by more than 30% compared with 2019. PE other downstream. The start of packaging film, pipes, etc. maintained a year-on-year high position, the hollow start was poor, and other downstream industries such as HDPE drawing were generally in order, and the purchase intention of raw materials was weak. Terminal factories are more cautious and wait and see, and the spot market transactions are light. Overall, the margin of demand will weaken in April and May, and reach a low point in June and July.

The downstream speculative demand for PP has decreased. The recent decline in the market has not stimulated the downstream mass purchase. The downstream finished raw material inventory has a downward trend, and the processing cost has also increased. It may be the result of the overdraft of the previous demand, and it is still in the digestion stage. The recent market of BOPP film is relatively general, and the profit is about 1500-1700 yuan/ton. According to statistics, this reduction in BOPP is mainly due to the declining market demand: film prices are high and lack of buying support, users are not motivated to obtain goods at the high price reduction stage, and the accumulated orders of film factories have been delivered one after another. After March 8th, BOPP market demand returned to flat. In the past nearly one and a half months, only last Thursday (April 15) had a fair daily trading volume, at around 460 tons. As of April 21, the average daily order volume of BOPP was 142 tons, which was 6 tons higher than the average of the first quarter. If the data on April 15 were excluded, the average daily order volume in April was 117 tons. In terms of cumulative orders, the cumulative orders of BOPP companies have been delivered one after another. At present, most of the order scheduling cycles of film factories have been within a week, the delivery time is fast, and there are stocks in stock. The low order quantity of BOPP film factories in April has given some feedback on the demand of the film market in the second quarter, and the rhythm of BOPP market users' purchases from May to June will continue to be maintained. The export volume may be reduced.

Conclusion and operation