Can China Plastic Industry Take Advantage of the Coming Sales Season?

September 19, 2022

Latest company news about Can China Plastic Industry Take Advantage of the Coming Sales Season?

In September, the domestic general plastic market stopped falling and recovered. According to the general plastic index monitored by SunSirs, it was 851 as of September 9, up 6 points from 845 at the beginning of the month. With the arrival of the peak sales season and the addition of the Mid Autumn Festival holiday, the demand for downstream goods has improved. At the same time, the rising prices of ethylene and propylene as raw materials and the obvious positive support from the cost side are the main reasons for the rise.

The PE market performed well. The price trend of the three major spot varieties has improved. Since September, the overall increase has been 50-400 RMB/ ton. Among them, LDPE rose the most significantly, by 2.28%, and LLDPE by 0.81%. Although the international crude oil price has weakened due to shocks recently, the rise of ethylene and coal at the cost end has brought benefits to the market. In addition, under the background of the peak sales season, the demand is released, and the operating rate of agricultural film in the downstream is increased. At the same time, with the arrival of the Mid Autumn Festival, the market turnover has also increased. Petrochemical enterprises have raised their ex factory prices, and the operators have a better mentality, and the quotations of merchants have followed.

Recently, the operating rate of PP polymerization enterprises has not changed much, and the overall load of the domestic industry remains at about 77%. However, the price of propylene at the feedstock end rose, boosting the strength of PP. With the gradual expansion of demand in the peak season and the increase of stocking activities, some downstream factories of the terminal enterprises have lifted their power and production limits, and the overall load has increased. Among them, the operating rate of plastic weaving enterprises and BOPP enterprises has rebounded significantly, and rigid goods need to be centrally stocked. Demand led to the decline of PP inventory. According to statistics, the total domestic PP inventory has dropped to about 730,000 tons so far. Traders responded to the increase in orders and a stronger mentality, and the offer followed the rise of petrochemical plants.

SunSirs analysts in the plastic industry believe that, with the end of periodic replenishment by downstream enterprises before the festival, market resource consumption is slow during the holiday period, and inventory pressure may increase, or it will bring some restraint to the rising market. The power of continued growth is limited, or it is mainly consolidation. More attention should be paid to the terminal demand.

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