November 21, 2022
Recently, the market trend of the plastic industry has been negative. According to the data monitored by SunSirs, since the National Day, various plastic varieties have gradually declined, and the decline of the three futures materials has been highlighted. As of November 15, the monthly decline of each product from high to low was PVC -4.03%, PP (wire drawing) -2.44%, LLDPE -2.36%. From a macro perspective, although the recent announcement of the Federal Reserve that the pace of interest rate increases has slowed down and other factors led to a worse than expected global economic recession, the pattern of the plastic industry, which has been dragged by the high inflation market environment for a long time, remains unchanged, and risks impact petrochemical enterprises. Most of the industry participants are worried and bearish about the future market. Superimposed by the international oil price shocks, the far end cost fluctuates, the market peak season just ended and the support needed just weakened, and the plastic products have many negative effects and the whole line is green.
After returning from the National Day holiday, the lack of confidence in the PVC spot market weakened with the end of replenishment. In terms of futures, it took the whole month of October to recover slightly. After November, the basis was gradually repaired, dragging the spot market to a certain extent. In terms of raw materials, upstream calcium carbide gave back after rising in the market range, and fell to the post festival level of 3,700 RMB/ ton on November 15. Downstream procurement enthusiasm is not high, and the actual orders are mostly scattered small orders. In addition, the terminal just needs to be more cautious when the real estate data releases bad news. At present, the benchmark price of PVC in SunSirs is 6,028.57 RMB/ ton. It is expected that the PVC market will be more wait-and-see in the short term, and the finishing operation will be more stable.
Last month, the price of polyethylene market was at a high of 8,720.71 RMB/ ton in the first ten days due to the demand for raw materials and post holiday replenishment. However, as the international crude oil stopped rising and fell in the later period, the market was in a bad mood. The lower reaches had limited ability to accept high prices, and their enthusiasm for entering the market was weaker than that in the earlier period. The overall operating rate of terminal enterprises has gradually declined, including the operating rate of agricultural film, packaging film and pipe materials. The demand for greenhouse film is coming to an end. The orders for low-pressure pipe materials and wire drawing materials are at the off-season level, and the demand for e-commerce consumption during the Double 11 Festival is limited. The lower reaches mostly maintain replenishment on demand, with low enthusiasm. As of November 15, the benchmark price of LLDPE of the business cooperative was 8,408.57 RMB/ ton, with a range decline of 2.36%.
Since October 15, the domestic polypropylene market has seen more losses than gains. In October, polymerization enterprises resumed production, and new units were expected to be put into production, which increased the supply pressure due to inventory increase. Since then, due to the poor profits of refineries, most of them have carried out independent load reduction operations, and the operating rate of the industry has gradually declined. As of last week, the capacity loss has expanded to more than 4 million tons. In terms of demand, the main downstream plastic knitting enterprises and BOPP enterprises generally have less stock than previous years, and the raw material inventory level has dropped significantly to less than one day. After entering November, the PP market environment stopped falling, and then the current basis was fixed to a certain extent, and the spot price stabilized at about 8,000 RMB/ ton. Cost support recovery of PDH and FMTP. The market returns to the fundamental market, with the guidance of supply and demand game.
Recently, the three spot prices of plastic futures fell together. According to the historical data monitored by SunSirs, it is not difficult to see that the end of the traditional peak season is reflected in the weakening of plastic rigid demand. However, from a vertical perspective, the post peak season market of this year seems to be different from that of previous years.
As early as the peak sales season was just in time, the demand of the plastic industry was lower than expected. However, the current plastic market is weak, and SunSirs would like to call it "cautious". All kinds of negative appearances reveal the core of the impact of global inflation on real enterprises. The operators' confidence in the market has been lacking for a long time, and the downstream industrial chain activities tend to be conservative. It is difficult to find a breakthrough point in the short and medium term. It is suggested to focus on inflation expectation and international crude oil market at the macro level.
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