Although the domestic PE market did not experience a sharp decline in April, as shown in the table, the decline is still significant. Obviously, the seemingly weak and turbulent journey is even more tormenting. The confidence and patience of merchants are gradually eroding. There are compromises and gains, and the goods are lightly stored in order to protect themselves. As a result, chaos came to the end in this way, in the face of the sharp contradiction between the supply and demand sides, whether the market can wait for a rebound in the market, still can not jump to a conclusion.
Upstream: As in the past, we still started from the upstream to find the source of the market’s weak downturn, but found that the international crude oil and ethylene monomers trended well in April. As of April 22, the closing price of ethylene monomer CFR Northeast Asia was 1102-1110 yuan/ton; the closing price of CFR Southeast Asia was 1047-1055 yuan/ton, both up 45 yuan/ton from the beginning of the month. The closing price of international crude oil Nymex WTI was US$61.35/barrel, a slight drop of US$0.1/barrel from the beginning of the month; the closing price of IPE Brent was US$65.32/barrel, an increase of US$0.46/barrel from the beginning of the month. From the data point of view, the upstream showed a roundabout trend of improvement in April, but for the PE industry, the only marginal increase only slightly supported the mentality, but did not promote it. The intensification of the epidemic in India has triggered market concerns about crude oil demand. In addition, the rebound in the US dollar exchange rate and the possibility of progress in the US-Iran nuclear negotiations have suppressed the oil market sentiment. The subsequent crude oil trend is weak and cost support is insufficient.
Futures: Since April, LLDPE futures have fluctuated and declined, and the prices have mostly discounted spot prices. The opening price on April 1st was 8,470 yuan/ton, and the closing price on April 22nd fell to 8,080 yuan/ton. Under the pressure of fiscal easing, inflation, domestic production capacity expansion and weak demand follow-up, futures may still operate weakly.
Petrochemical: Although the operations of petrochemical companies are affected and constrained by the upstream and downstream, their repeated price cuts due to the accumulation of inventory have clearly pushed the market to a dark moment. At present, the decline in inventory of production enterprises has slowed down significantly, and has been basically the same as the same period last year, reaching a medium-to-high level. As of the 22nd, the “two oils” stocks were 865,000 tons. In terms of ex-factory prices, take Sinopec East China as an example. Up to now, Shanghai Petrochemical’s Q281 is quoting 11,150 yuan, down 600 yuan from the beginning of the month; Yangzi Petrochemical 5000S is quoting 9100v, down 200 yuan from the beginning of the month; Zhenhai Petrochemical 7042 is quoting 8,400 yuan, down 250 from the beginning of the month. yuan. Although petrochemical’s frequent profit-sharing measures have eased its own pressure to a certain extent, it has also deepened the uneasy sentiment of the middle market, causing the price center of the China Plastics City market to continue to fall.
Supply: In April, petrochemical plants were overhauled frequently. Large-scale plants such as Yanshan Petrochemical and Maoming Petrochemical were still shutting down for maintenance. Subsequent extension of the second phase of Yuneng Chemical, Zhenhai Refining and Chemical, Baofeng Phase II, and Shenhua Xinjiang will enter the maintenance from April to May. . In terms of imports, the overall inventory level was significantly higher than that of the same period last year, and continued to stay close to the five-year average of the same period. The short-term market supply pressure is expected to be low, but there are currently two domestic devices (Hyguolong Oil and Lianyungang Petrochemical) in trial operation. It is expected that products will be put on the market in late April or May, and with the resumption of production of the North American parking device, and the Middle East The regional overhaul is over and overseas supply is gradually recovering. After May, the import volume is expected to gradually pick up from the previous month.
Demand: PE demand should be divided into two analysis. Domestically, the downstream agricultural film demand is off-season, and the operating rate ushered in a seasonal decline. Factory orders have been gradually reduced since mid-April. This year’s mulch film was finished ahead of schedule, and the start-up was also lower than in previous years. The weakening of demand will suppress market prices. In foreign countries, with the launch and vaccination of the new crown vaccine, the demand for packaging of epidemic prevention materials has been significantly reduced, while economic recovery in Europe and the United States has gradually followed up, and the supply has increased. Follow-up my country’s export orders for plastic products are expected to decrease.
In summary, although some domestic devices are undergoing maintenance or are about to be overhauled, their support to the market is relatively limited. Under the premise of continued weak demand, crude oil is weak, futures are bearish, petrochemical prices are cut, and the polyethylene market is struggling. Traders have a pessimistic mentality, making profits and reducing inventories the mainstream operation. It is expected that there will be little upside potential for polyethylene in the near future, and the market may continue to be weakened.
Post time: Apr-26-2021
